The bigger biotechs have done a good job since the last Issue, with solid earnings to date and most recently, Alkermes plc (ALKS) exceeding estimates, notes John McCamant, editor of The Medical Technology Stock Letter.
ALKS recently reported strong 4Q22 earnings, with total revenue coming at $305 million, above the consensus estimate of $290 million. Lybalvi sales came in at $35 million, above the consensus of $34 million, bringing full-year sales to $96 million.
ALKS also provided first-time FY23 guidance, including total revenues of $1.13-$1.25 billion, Lybalvi sales of $180-$205 million, Aristada sales of $315-$345 million, and Vivitrol sales of $380-$410 million.
ALKS is doing a good job of building market awareness for Lybaldi which has only been on the market since Oct. 2021. In 2023, we expect continued execution of the commercial strategy and investment in the DTC campaign will allow ALKS to exceed analyst’s estimates for Lybalvi.
The company will advance orexin 2 receptor agonist with the goal of their Phase I program to establish initial safety and a tolerability profile and generate initial clinical proof-of-concept (POC) data for ALKS 2680. Separate oncology business which will clarify the ALKS value proposition as standalone “pure” neuroscience company.
In our view, strong Lybalvi sales and positive POC data for ‘2680 both have the potential to serve as stock catalysts for ALKS in 2023.
Recommended Action: Buy ALKS under $35 with a target price of $55.
