AnalystConsensusTarget updated the narrative for ALKS

Alkermes' analyst price target was raised approximately $0.95 to $42.53 per share, as analysts point to improved profit margin outlook and the anticipated benefits from its Avadel Pharmaceuticals acquisition. These factors are expected to support both near- and mid-term growth.

Analyst Commentary

Analysts have weighed in following Alkermes' recent acquisition announcement and clinical updates, providing a balanced perspective on the company's outlook. Their commentary touches on several key themes influencing Alkermes' valuation, execution, and future growth trajectory.

• Analysts highlighted that the Avadel Pharmaceuticals acquisition is expected to provide immediate revenue contributions, expand Alkermes’ commercial footprint, and support new growth avenues without overextending its financial resources.
• Recent clinical updates on alixorexton in narcolepsy type 1 were generally deemed solid and in line with expectations. Analysts noted the potential for a meaningful market share in this therapeutic area.
• Bullish observers noted that Alkermes is entering the sleep therapeutics market at an attractive valuation. The company is seen as benefiting from Avadel’s positive cash flow and from the strong growth trajectory of Lumryz sales.
• Some regard the current valuation as discounting the potential for success in narcolepsy. The latest setbacks are viewed as creating a favorable entry point for investors.

• Bearish analysts expressed concern over safety events observed in clinical trials, specifically blurred vision associated with alixorexton. This issue could limit its adoption in narcolepsy type 1, especially given established competition.
• There is skepticism about the viability of alixorexton in narcolepsy type 2 and idiopathic hypersomnia. Analysts note that higher doses may be required, possibly impacting broader market uptake.
• Some anticipate that momentum from recent quarterly outperformance may not persist in the longer term. This view is based on unchanged growth trajectories for existing brands and limited pipeline updates.
• The acquisition of Avadel also led to a downgrade of Avadel shares, reflecting caution about integration risks and the implications for the combined company’s execution.

What's in the News

• Alkermes appointed Joshua Reed as Chief Financial Officer, effective September 15, 2025. Mr. Reed brings over 30 years of experience in the biopharmaceutical sector. He previously held CFO roles at Omega Therapeutics and Aldeyra Therapeutics, as well as senior finance positions at Bristol-Myers Squibb. (Key Developments)
• The company completed the repurchase of 7,894,417 shares, representing 4.72% of outstanding shares, for a total of $200.27 million. This was part of its ongoing share buyback program announced in February 2024. (Key Developments)

Valuation Changes

• Consensus Analyst Price Target increased slightly, rising from $41.59 to $42.53 per share.
• Discount Rate rose marginally from 7.16% to 7.24%.
• Revenue Growth outlook improved significantly, with the expected annual contraction narrowing from -1.32% to approximately -0.04%.
• Net Profit Margin forecast climbed from 11.68% to 13.51%.
• Future P/E ratio declined from 53.0x to 45.2x, reflecting a more favorable earnings outlook compared to the share price.