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Pharmaceutical industry

Alkermes, Inc. Maintains Neutral Rating, Price Target of $11.50

Strategic Insights

— 1 min read

Alkermes, Inc., a biotech company specializing in proprietary drug delivery technologies, continues to develop treatments for CNS disorders, alcoholism, and diabetes. The company has two approved products on the market: Risperdal Consta, a longer-lasting injectable version of Johnson & Johnson's schizophrenia drug Risperdal, and Vivitrol, for the treatment of alcohol dependence. A third product, exenatide once-weekly, is under FDA review for the treatment of type II diabetes, with a response expected in the first quarter of 2010.

Key Takeaways:

  • Alkermes maintains a Neutral rating with a price target of $11.50, stemming from the company's development of treatments for CNS disorders, alcoholism, and diabetes.
  • Risperdal Consta, marketed worldwide by Johnson & Johnson, is a key market driver, with approval in over 75 countries and marketed in over 50.
  • Vivitrol, for the treatment of alcohol dependence, is another approved product, and its commercial success will be crucial for the company's top-line growth.
  • Exenatide once-weekly, under FDA review, has high market potential in the $13 billion type II diabetes market, with a possible delay in approval due to safety concerns.
  • Other pipeline products, such as ALKS 27 for COPD, ALKS 29 for alcohol dependence, and ALKS 33 for addiction, have the potential to boost the company's top-line.
  • Estimate revisions are limited, with only a few analysts raising their earnings estimates for the next fiscal year, maintaining a Hold (Zacks Rank #3) and Neutral rating.

Statistics:

  • Alkermes' two approved products have the potential to generate substantial revenue, with Risperdal Consta and Vivitrol completed in over 75 and 50 countries, respectively.
  • The pipeline product exenatide once-weekly has enormous market potential in the $13 billion type II diabetes market.
  • Two analysts covering the stock have raised their earnings estimates over the last 30 days for fiscal 2010 (ending Mar 31, 2010), while three analysts raised their estimates for fiscal 2011 (ending Mar 31, 2011).
  • Alkermes' short-term as well as long-term recommendation from Zacks Investment Research remains Hold and Neutral, respectively.

Sources:

  • Zacks.com via COMTEX - Feb 09, 2010
  • Johnson & Johnson (JNJ)
  • Eli Lilly (LLY)
  • Amylin Pharmaceuticals, Inc. (AMLN)
  • Comtex SmarTrend Alert, an automated pattern recognition system, indicated a DOWNTREND on 01-26-2010 for JNJ @ $62.62 and on 12-10-2009 for LLY @ $35.40.

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