UBS upgraded Alkermes (NASDAQ:ALKS) from Neutral to Buy on Tuesday, raising its price target to $42.00 from $33.00. The upgrade reflects UBS’s growing confidence in the company’s orexin receptor drug candidate ALKS-2680 for narcolepsy and idiopathic hypersomnia treatment.
UBS analyst commentary indicates that a recent physician survey strengthened the firm’s outlook on ALKS-2680’s market positioning. The drug candidate appears well-positioned to potentially establish itself as an attractive treatment option in sleep disorders, according to the research note.
The current stock valuation prices in approximately $1.2 billion in 2030 estimated sales, compared to UBS’s base case projection of $1.8 billion. This base case includes $350 million specifically for ALKS-2680, with the remainder attributed to Alkermes’ existing business portfolio. With a market capitalization of $4.85 billion and a P/E ratio of 15.08,
UBS notes that three key mid/late-stage orexin clinical trial results are expected in the second half of the year from Alkermes, Takeda, and Centessa Pharmaceuticals. These upcoming data readouts could generate broader market excitement for the entire orexin drug class.
The price target increase represents a 27% upside from the previous $33.00 target, signaling UBS’s more bullish stance on Alkermes’ growth prospects in the sleep disorder treatment market.
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