Alkermes weakness on Jazz pause a buying opportunity, says Mizuho

Mizuho believes Alkermes (ALKS) along with Jazz (JAZZ) are down intra-day as the market likely finds the orexin 2 receptor agonist class less attractive after Jazz said during an investor conference this morning that they will pause the development of their lead orexin 2 receptor agonist, JZP-441, after seeing cases of visual disturbances in their healthy volunteer study. Based on the current data, even if visual disturbances are a characteristic of the OX2R class, the firm believes this adverse event is unlikely to be a barrier to commercialization, similar to how urinary urgency is an OX2R class effect that does not seem to be a limiting issue. Given this view, the firm sees weakness in Alkermes shares as a buying opportunity and keeps a Buy rating and $35 price target on the stock.