Analyst Jason Gerberry of Bank of America Securities maintained a Hold rating on Alkermes, retaining the price target of $33.00.
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Jason Gerberry has given his Hold rating due to a combination of factors surrounding Alkermes’ strategic decisions and market conditions. The proposed acquisition of Avadel, while strategically sound, hinges on the successful integration and performance of Lumryz, a once-nightly oxybate for narcolepsy. This acquisition is expected to be accretive by 2026, but the market’s reaction remains cautious, largely because the future success of Alkermes is tied to the competitive landscape of its orexin pipeline asset and the broader oxybate market.
Despite the potential for growth through the acquisition, the competitive challenges posed by existing products like Jazz’s Xywav, which has a significant market share, and the shift towards generics in the oxybate category, contribute to the Hold rating. Additionally, the financial projections and strategic benefits of the acquisition are contingent on the successful approval and market performance of Alkermes’ orexin asset, making the stock’s upside potential uncertain at this stage.
Gerberry covers the Healthcare sector, focusing on stocks such as Ionis Pharmaceuticals, Jazz Pharmaceuticals, and Arrowhead Pharmaceuticals. According to TipRanks, Gerberry has an average return of 9.5% and a 58.02% success rate on recommended stocks.
In another report released yesterday, H.C. Wainwright also reiterated a Hold rating on the stock with a $46.00 price target.