On Thursday, Mizuho maintained its Outperform rating on Alkermes (NASDAQ:ALKS) with a steady price target of $35.00. The firm's stance came following the company's presentations at SLEEP Europe, where it showcased Phase 1b data for its investigational drug ALKS-2680. The data, particularly from patients with narcolepsy type 2 (NT2), indicated a favorable safety profile at lower doses.
Alkermes presented both oral and poster presentations at the conference, revealing safety and efficacy data for ALKS-2680 in NT2 and idiopathic hypersomnia (IH). The majority of adverse events were associated with the highest dose of 25mg. In contrast, the 5mg and 12mg doses demonstrated benign safety profiles. This detailed safety data is the first disclosure of its kind for the three different doses used in the study.
The company's findings are especially relevant as they may influence the ongoing Phase 2 trial, Vibrance-2, which is testing three lower doses of ALKS-2680 (10, 14, and 18 mg) in NT2 patients. These doses are all below the 25mg dose that was linked to the majority of adverse events in the Phase 1b trial.
Mizuho has expressed optimism about ALKS-2680's market potential, suggesting that it could become a leading treatment for narcolepsy. The firm highlighted the drug's first-mover advantage in the NT2 space as a key factor in its potential success. The continued endorsement of ALKS-2680 by Mizuho supports the view that the drug could have a significant impact on the treatment of narcolepsy, pending further successful trial results.
In other recent news, Alkermes has been making significant strides with robust financial results and promising drug developments. The company's second quarter of 2024 recorded a total revenue of $399 million, primarily driven by the robust sales of proprietary products Lybalvi and Aristada. Analyst firms Baird, H.C. Wainwright, and Mizuho have all shown positive outlooks for Alkermes, with Baird and H.C. Wainwright raising their share targets and Mizuho maintaining its Outperform rating.
Alkermes has also initiated the Vibrance-2 phase 2 clinical trial to evaluate the safety and efficacy of its investigational drug ALKS 2680 for adults with narcolepsy type 2. This trial is part of Alkermes' broader effort to innovate within the field of neuroscience. In addition, Alkermes is considering further development of ALKS-2680 for idiopathic hypersomnia (IH), based on the unmet need and positive feedback from patient groups and clinicians following Phase 1b data.
Furthermore, Alkermes is exploring the potential of OX2 in other indications, such as neurodegenerative and neurodevelopmental diseases, where disrupted sleep is a clinical feature. The company's management is optimistic about the anticipated safety data for '2680 NT2 at the SLEEP EU conference, expecting the data to be relatively uneventful, with an adverse event profile similar to that seen in NT1.
InvestingPro Insights
As investors assess the potential of Alkermes' investigational drug ALKS-2680, the company's financial health and market performance provide additional context. According to InvestingPro data, Alkermes holds a market capitalization of approximately $4.37 billion, with a Price to Earnings (P/E) ratio of 15.45, reflecting investor sentiment about the company's earnings potential. More intriguingly, the adjusted P/E ratio for the last twelve months as of Q2 2024 stands at 11.12, suggesting a more favorable valuation when considering normalized earnings. Additionally, the company has showcased a robust gross profit margin of 83.31% over the same period, underscoring its ability to maintain profitability.
Highlighting the strategic moves by management, one InvestingPro Tip notes that Alkermes has been aggressively buying back shares, a sign that the company believes in its intrinsic value and future prospects. Another tip points out that Alkermes holds more cash than debt on its balance sheet, indicating a strong liquidity position that could support ongoing research and development activities for drugs like ALKS-2680. For investors seeking deeper analysis, InvestingPro offers additional tips on Alkermes, providing a comprehensive understanding of the company's financial nuances.
With Mizuho's positive outlook on ALKS-2680 and Alkermes' solid financial metrics, investors may find the company well-positioned to navigate the path towards commercializing its narcolepsy treatment. The InvestingPro platform lists several more tips for Alkermes, further enriching investor knowledge and decision-making.
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