Alkermes plc (ALKS) is thriving in its revenue generation through the net sales of its proprietary drugs, notably Vivitrol for alcohol and opioid dependence, Aristada for schizophrenia, and Lybalvi for schizophrenia and bipolar I disorder. The company also earns from manufacturing and/or royalty revenues on net sales of products commercialized by its partners.
The alcohol-dependence treatment market’s growth has led to an increase in new patients seeking Vivitrol, while Aristada has seen its sales driven by underlying demand in recent quarters.
In August 2023, Alkermes initiated negotiations with Teva Pharmaceuticals USA, Inc. (TEVA) to settle the ongoing patent litigation in the U.S. District Court concerning Vivitrol (naltrexone for extended-release injectable suspension). As part of the agreement, Teva will receive a license to market a generic version of Vivitrol in the United States from Jan 15, 2027, or earlier under certain customary circumstances. However, both companies are required to submit the agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review.
June 2021 witnessed the FDA’s approval of Lybalvi (olanzapine and samidorphan) for the treatment of adults with schizophrenia and bipolar I disorder. The sales of Lybalvi have surpassed management’s expectations since its approval.
The year-to-date performance of Alkermes has seen a decline of 8.2%, in contrast to the harsher 24.1% decline in the industry.
Furthermore, Alkermes is in the process of separating its oncology business into a new, publicly traded company called Mural Oncology plc. The separation aims to streamline the company’s focus on developing therapies for neurological conditions and improving profitability. The completion of this separation is expected later in November 2023, subject to various customary conditions.
However, a critical aspect to note is Alkermes’ heavy reliance on manufacturing and/or royalty revenues on sales of products commercialized by its partners. This dependence raises concerns regarding the company’s revenue stability.
Moreover, Alkermes faces significant competition in the treatment of schizophrenia and bipolar I disorder, with several companies actively developing competing medications. The potential approval of these treatments poses a threat to Alkermes’ market position in the foreseeable future.
Alkermes plc Price and Consensus
Zacks Rank & Stocks to Consider
Alkermes currently carries a Zacks Rank #3 (Hold).
In the biotech sector, notable stocks include Dynavax Technologies Corporation (DVAX) and Ligand Pharmaceuticals Incorporated (LGND), both holding a Zacks Rank #1 (Strong Buy). Notably, Dynavax Technologies’ 2023 loss per share estimates have narrowed from 24 cents to 12 cents in the past 60 days, while Ligand Pharmaceuticals’ 2023 earnings per share estimates have improved from $4.98 to $5.10 during the same period.
Dynavax Technologies has witnessed a 27.3% rally in its year-to-date performance, and the company posted a four-quarter average earnings surprise of 293.21%. On the other hand, Ligand Pharmaceuticals has seen a 17.4% decrease in year-to-date performance, but has consistently surpassed earnings estimates with a four-quarter average earnings surprise of 67.19%.
Additionally, for those interested in semiconductor stocks, Zacks names a top semiconductor stock set to soar amidst the AI, machine learning, and IoT demand.
Overall, Alkermes continues to navigate the pharmaceutical landscape with its proprietary drugs, despite looming competition. The company’s future endeavors, particularly the anticipated completion of its oncology business separation and the evolving market conditions, are poised to influence its trajectory in the months and years ahead.
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Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
