Alkermes Downgraded, Time to Buy?
by Steven Gold
BioHealth Investor.com
Alkermes (ALKS) was a loser for the week going down three straight days after announcing its 4th quarter numbers on May 29, 2007. Its stock price now rests just below 16, which leaves the company with a market cap around 1.6 billion. WR Hambrecht analyst Andrew Forman downgraded the stock to “hold” and characterized the company's reliance on Risperdal Consta as “the only leg on the stool.” ALKS revenues were largely dependent on the antipsychotic drug because its sales of recently approved Vivitrol have been slow. Vivitrol is used to treat alcohol dependence pharmacologically. One analyst was positive Friedman, Billings, Ramsey analyst Jim Reddoch, who rates the stock “outperform,” pointed to growing monthly sales of Vivitrol as a potential catalyst for future sales growth.
Vivitrol has the potential to be a huge blockbuster – change the way alcoholism is treated for the future. However, ALKS and its marketing partner Cephalon (CEPH) need to do a better job marketing this new treatment option. With Risperdal approved for schizophrenia and Vivitrol approved for alcohol dependence, what is next in the pipeline for this company to potentially move it into the upper-echelon of biotechnology companies?
Well, it appears the next drug in line for approval for ALKS is a collaboration effort with Eli Lilly (LLY) to develop inhaled insulin. This inhaled form of insulin could substitute for some of the injections many diabetes patients need to control their blood sugar. AIR Insulin, the product candidate, is currently in Phase III clinical development. This product if approved could be the first true “blockbuster” drug for ALKS and a real catalyst for its stock and investors. Other drugs in the pipeline follow a similar trend aimed primarily at diabetes or alcohol dependence.
While the analysts are disappointed with Vivitrol sales and feel Risperdal makes up too much of ALKS current revenues just wait until AIR Insulin phase 3 results are announced and the drug is either approved or denied by the FDA. ALKS, and LLY for that matter, desperately need a big winner and the inhaled insulin concept if approved would be a blockbuster drug and a wonderful alternative for those with diabetes.
Disclosure: Author owns stock in Alkermes
BioHealth Investor.com
__________________
BioHealth Investor.com
Alkermes (ALKS) was a loser for the week going down three straight days after announcing its 4th quarter numbers on May 29, 2007. Its stock price now rests just below 16, which leaves the company with a market cap around 1.6 billion. WR Hambrecht analyst Andrew Forman downgraded the stock to “hold” and characterized the company's reliance on Risperdal Consta as “the only leg on the stool.” ALKS revenues were largely dependent on the antipsychotic drug because its sales of recently approved Vivitrol have been slow. Vivitrol is used to treat alcohol dependence pharmacologically. One analyst was positive Friedman, Billings, Ramsey analyst Jim Reddoch, who rates the stock “outperform,” pointed to growing monthly sales of Vivitrol as a potential catalyst for future sales growth.
Vivitrol has the potential to be a huge blockbuster – change the way alcoholism is treated for the future. However, ALKS and its marketing partner Cephalon (CEPH) need to do a better job marketing this new treatment option. With Risperdal approved for schizophrenia and Vivitrol approved for alcohol dependence, what is next in the pipeline for this company to potentially move it into the upper-echelon of biotechnology companies?
Well, it appears the next drug in line for approval for ALKS is a collaboration effort with Eli Lilly (LLY) to develop inhaled insulin. This inhaled form of insulin could substitute for some of the injections many diabetes patients need to control their blood sugar. AIR Insulin, the product candidate, is currently in Phase III clinical development. This product if approved could be the first true “blockbuster” drug for ALKS and a real catalyst for its stock and investors. Other drugs in the pipeline follow a similar trend aimed primarily at diabetes or alcohol dependence.
While the analysts are disappointed with Vivitrol sales and feel Risperdal makes up too much of ALKS current revenues just wait until AIR Insulin phase 3 results are announced and the drug is either approved or denied by the FDA. ALKS, and LLY for that matter, desperately need a big winner and the inhaled insulin concept if approved would be a blockbuster drug and a wonderful alternative for those with diabetes.
Disclosure: Author owns stock in Alkermes
BioHealth Investor.com
__________________
posted by Nico at
2:38 PM
2 Comments:
It may be a bit premature to say that AIR insulin will be a blockbuster considering the limited success of Pfizer's inhaled insulin, Exubera.
It never ceases to amaze me at how ignorant some analysts and reporters are that cover various biotech companies, their pipelines, a market potential.
In this case it really begs to be mentioned. How can a reporter and one who actually discloses that he owns stock in the company seriously state that the next blockbuster, actually the only blockbuster, in ALKS pipeline in an inhaled insulin. While I agree ALKS/LLY's version is heads and tails above the 'bong' version currently available from NKTR, it will have virtually the same success. Problems with provider coverage here in the US and not to mention the EU who has socialized medicine and disapproved the inhaled insulin regime, as it offers no advantage or cost savings over the injected version of insulin.
Additionally, the only 'real' blockbuster that ALKS has lined up, and THIS will be hugh, is the partnership they have with AMLN and the upcoming LAR version of Byetta. This is widely acknowledged by almost every barokerage house analyst to be almost a guaranteed multi-billion product.
So my question to Steve, is are you not aware of this, I mean you actually own shares in ALKS, make a living writing about biotech companies, and thus I would expect you to be keenly aware of where the company's real potential lies.
Why not do some research or DD on the partnership royalties that ALKS will bring in from this product.
Do you even know what Byetta LAR is? Do you know that LLY is AMLN's partner in that venture also, but they will be forced to pay ALKS royalties on every once of the compound produced using ALKS Medisorb platform.
Would you like me to write this column for you?
Regards,
The BioTrader
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