Citigroups' Jonathan Eckard, Ph.D. continues to believe that Alkermes Plc ALKS is a top name among biotech stocks and remains on the Citi U.S. Focus List.
On Wednesday, Eckard increased his price target on Buy-rated Alkermes to $85 from a previous $72, reflecting the belief that the benefits of ALKS-3831 are “clinically meaningful” and open up new avenues of using olanzapine (Zyprexa) in schizophrenia.
“We view ALKS-3831's potential success in the second setting of schizophrenia with alcohol abuse has even stronger scientific rationale and could create an additional commercial opportunity for the drug,” Eckard wrote. “With additional important pipeline data coming over the first half of 2015, we see the potential for additional near-term value inflections for Alkermes shares.”
Eckard adds that ALKS-3831 is a treatment option for patients experiencing significant and rapid weight gain on generic olanzapine, and the potential exists for the treatment to increase patients initiating olanzapine given there is a migration option for the common metabolic effects.
In addition, Eckard sees data from ALKS-7106 (pain) and ALKS-8700 (multiple sclerosis) will receive the most focus from the Street and positive results from just one treatment could provide further upside support to valuation. The analyst also notes that multiple wins could create a “significant value inflection” with shares trading as high as $100 per share.
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