H.C. Wainwright analyst Douglas Tsao has reiterated their neutral stance on ALKS stock, giving a Hold rating on November 12.
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Douglas Tsao has given his Hold rating due to a combination of factors surrounding Alkermes’ strategic decisions and market conditions. The company’s recent acquisition proposal for Avadel, although superior to a competing offer from Lundbeck in terms of CVR terms, reflects a cautious approach that does not necessarily indicate a lack of confidence in their upcoming data for alixorexant in idiopathic hypersomnia. Despite some investor disappointment with alixorexant’s performance in NT2, Tsao believes the drug will eventually achieve commercial success in that indication.
Furthermore, Alkermes’ financial strategy appears sound, as the acquisition is not expected to overburden the company’s balance sheet, given its cash reserves and lack of debt. The market potential for Lumryz, particularly in NT1, is promising, but its utility in IH remains a subject of debate among specialists. Tsao’s valuation of Alkermes is based on a risk-adjusted revenue estimate, considering both the probability of success for pipeline assets and potential risks in clinical development and regulatory approval.
According to TipRanks, Tsao is a 5-star analyst with an average return of 16.3% and a 52.02% success rate. Tsao covers the Healthcare sector, focusing on stocks such as Alkermes, Hansa Biopharma AB, and Protagonist Therapeutics.
In another report released on November 12, Bank of America Securities also maintained a Hold rating on the stock with a $34.00 price target.