Alkermes selloff on narcolepsy data likely overdone, says Mizuho

Mizuho analyst Uy Ear views the selloff yesterday in shares of Alkermes after the company resented first-time narcolepsy type 1 in human for its orexin 2 receptor agonist, ALKS 2680, as likely overdone. Investors wanted to see Maintenance of Wakefulness Test data that were at least as strong as the Phase 2 data for the discontinued TAK-994, and ALKS 2680 delivered on this expectation at significantly lower doses that could avoid the liver toxicity issue seen in the two higher TAK-994 doses, the analyst tells investors in a research note. The firm is surprised the stock was down 7%-8% on the news. The selloff is likely an overreaction on the limited preliminary Phase 1b results based on four narcolepsy type 1 patients, and more data are needed to appropriately assess the optimal dose for ALKS 2680, says Mizuho.