Evercore upgrades Alkermes to Outperform, says ‘orexin is real’

Evercore ISI analyst Umer Raffat upgraded Alkermes to Outperform from In Line after the company announced preliminary results, including initial proof-of-concept data, from a phase 1 study evaluating ALKS 2680, the company’s novel, investigational orexin 2 receptor agonist in development for the treatment of narcolepsy. When the analyst looked at the data presented at World Sleep yesterday, a “few things jumped out,” including that the drug is clearly very active and very potent. The analyst wouldn’t have thought the stock would be down 10% following the data, but suggests “maybe it’s because of positioning + large seller from the open.” While Evercore acknowledges some risk on base business estimates, the firm argues “that’s not the main reason folks own this name, adding that “orexin is real” and the risk/reward on orexin is “very attractive at these levels.”