Barclays Sees 32% Upside In Alkermes Shares, Says 2016 Vivitrol Sales 'Could Easily Top Guidance'

"We expect a clear guidance beat and Street peak consensus to rise considerably. We believe the growth of wholly-owned Vivitrol is difficult to ignore and expect 2016 sales could easily top guidance ($180–200 million) by 20 percent or more," analyst Jonathan Eckard wrote in a note.

For 2016, the company expects total revenues to range from $700 million to $750 million, an increase of 15 to 20 percent from last year. Alkermes expects net sales of $180 million to $200 million for Vivitrol, which is used to treat opioid dependence.

The analyst said Vivitrol's 2015 sales grew 53 percent to $144.4 million and the average year-to-date IMS weekly TRx growth (+2.5 percent week-over-week) is projecting more than 80 percent year-over-year increase in 2016.

Related Link: Alkermes Initiates Phase 1 Clinical Trial Of Immuno-Oncology Drug Candidate ALKS 4230

"More importantly, even if Vivitrol's current growth rate were halved, sales are projecting to surpass peak sell-side consensus estimates in the next 2 years," Eckard highlighted.

In addition, the analyst noted that the number of State/County Vivitrol programs increased 50 percent in the first six months of 2016. Vivitrol remains about 1 percent of all medication assisted therapy (MAT) for opioid dependence treatment and even an increase to 2–3 percent would create a major value inflection for shares.

Meanwhile, 2022 Street consensus sales estimate for Vivitrol is about $375 million, which the analyst expects could be surpassed as early as 2017–18. Eckard more than doubled his 2022 Vivitrol sales estimate to $800 million from $380 million.

The analyst, who has an Overweight rating on the stock, now sees 2016 Vivitrol sales of $226 million, up from prior estimate of $208 million.

"Our LT est. assumes $100 million in incremental sales y/y from 2017-until patent expiry ~2030 — significantly lower than the current growth rate," Eckard added.

For 2016, Eckard now expects the company to report a profit of $0.31 versus earlier estimate of a loss of $0.30 a share, while Alkermes sees non-GAAP loss of $0.16 to $0.36 a share for the year. The Street expects a loss of $0.29 a share for 2016.

At the time of writing, shares of Alkermes gained 0.43 percent on the day to $49.40.