Alkermes stock initiated with Buy rating at Goldman Sachs on orexin program potential
Investing.com
Published Jul 15, 2025 04:21AM ET
Investing.com - Goldman Sachs has initiated coverage on Alkermes (NASDAQ:ALKS), currently trading at $29.69 with a market capitalization of $4.9 billion, with a Buy rating and a $43.00 price target, citing potential growth from the company's orexin receptor 2 agonist portfolio. According to InvestingPro data, the company maintains a strong financial health score of "GREAT" and trades at an attractive P/E ratio of 13.6x.
The investment bank notes that Alkermes is an established commercial company with a mature portfolio of neuropsychiatric assets including Aristada, Lybalvi, and Vivitrol for treating schizophrenia, bipolar I disorder, alcohol dependence, and opioid dependence. This portfolio, along with Vumerity royalties, is on track to achieve the company's fiscal year 2025 guidance of $1,340-1,430 million. InvestingPro analysis reveals the company maintains an impressive gross profit margin of 84.42% and holds more cash than debt on its balance sheet.
Goldman Sachs identifies the company's emerging orexin receptor 2 agonist portfolio as the next growth driver, with lead asset ALKS 2680 positioned to address rare hypersomnias with estimated peak sales of $2.8 billion. The firm anticipates upcoming data from Phase 2 Vibrance-1 studies in narcolepsy type 1 in early third quarter and Vibrance-2 studies in narcolepsy type 2 in Fall 2025. With the company's next earnings report due on July 23, InvestingPro subscribers can access comprehensive analysis and 10+ additional ProTips to make informed investment decisions.
The investment bank expects ALKS 2680 to demonstrate benefits on wakefulness with improvements in mean sleep latency and mild, transient adverse events. Positive results could serve as a catalyst for share price appreciation.
Goldman Sachs acknowledges that clarity on the full commercial opportunity depends on clinical data from competitor orexin programs, including Takeda's Phase 3 oveporexton data expected at World Sleep 2025 on September 8, and Centessa's Phase 2a ORX750 data in multiple narcolepsy types in the second half of 2025.
In other recent news, Alkermes has drawn significant attention from analysts due to its orexin receptor drug candidate, ALKS-2680, aimed at treating narcolepsy and idiopathic hypersomnia. UBS upgraded Alkermes' stock rating from Neutral to Buy, raising its price target to $42.00, reflecting optimism about ALKS-2680's market potential. Stifel also maintained its Buy rating and $42.00 price target, expressing confidence in the drug's success in upcoming clinical trials, particularly for Narcolepsy Type 1 (NT1). Cantor Fitzgerald reaffirmed an Overweight rating with a $43.00 price target, highlighting the importance of upcoming Phase 2 trial results for ALKS-2680 in proving its therapeutic benefits.
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RBC Capital, however, maintained a Sector Perform rating with a $40.00 price target, citing safety concerns related to orexin receptor 2 agonists, including potential stimulant-like effects and other side effects. Despite these concerns, analysts have noted the absence of severe adverse events in ALKS-2680's Phase 1b trial, suggesting a tolerable safety profile. The competitive landscape includes Takeda's TAK-861, but analysts believe ALKS-2680's broader development scope positions it well in the market. Investors are keenly awaiting the results of Alkermes' upcoming trials, which could significantly impact the company's valuation and market positioning.
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Written By: Investing.com
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