As the healthcare community debates the positive top line results from Alkermes Plc (NASDAQ:ALKS) FORWARD-5 study for ALKS 5461 in major depressive disorder, Credit Suisse analyst Vamil Divan weighs in with bullish insights. Alkermes shares are currently trading at $56.83, up $13.32 or 30.61%.
Divan wrote, “We had removed the product from our model after the first two Phase 3 studies failed but, given the positive results, we now add it back in with a 60% probability of success. We assume a peak sales potential of $1.2Bn given the unmet need in treatment-resistant depression, leading to probability-adjusted sales of $750MM in our model in 2023. After incorporating expected additional expenses that we believe would be necessary to successfully commercialize the asset, our DCF for ALKS increases to $71.”
As such, the analyst reiterated an Outperform rating on shares of Alkermes, while raising the price target to $70 (from $52), which represents a potential upside of 24% from where the stock is currently trading.
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Vamil Divan has a yearly average return of 8.9% and a 47% success rate. Divan has an 6% average loss when recommending ALKS, and is ranked #441 out of 4183 analysts.
Out of the 11 analysts polled by TipRanks, 7 rate Alkermes stock a Buy, while 4 rate the stock a Hold. With a return potential of 13.1%, the stock’s consensus target price stands at $63.80.