AMLN Amylin Pharmaceuticals, Inc. (MM)

We recently upgraded Alkermes plc (ALKS) to Outperform from Neutral with a target price of $21.00. Our long term recommendation is in line with the Zacks #1 Rank (Strong Buy) for the short run.

In May 2012, Alkermes came out with impressive numbers for the final quarter of fiscal 2012 (ended March 31, 2012). This was the second full quarter for the company, formed in September 2011 following the merger of Alkermes Inc. and Elan Drug Technologies (EDT), the drug delivery unit of Elan Corporation (ELN).

Alkermes beat the Zacks Consensus Estimate both in terms of revenues as well as earnings. Results were boosted by the inclusion of drugs belonging to the EDT unit of Elan. Alkermes' revenues jumped 155% in the final quarter of fiscal 2012 due to the expanded product portfolio (inclusive of more than 20 products).

The key marketed products at Alkermes include Risperdal Consta (schizophrenia and bipolar disorder), Xeplion (schizophrenia), Vivitrol (opioid and alcohol dependence), Ampyra/Fampyra (improving walking ability in multiple sclerosis patients) and Bydureon (type II diabetes).

The expanded portfolio caused the company to provide bright revenue guidance for fiscal 2013. Revenues are projected in the range of $490-$530 million, well above the fiscal 2012 revenues of $390 million. We believe that Alkermes will achieve the guidance driven by its strong product portfolio. The Zacks Consensus Estimate of $510 million is well within the company’s projected range.

We are pleased with the US approval and launch of diabetes drug, Bydureon, which offers significant commercial potential. Bydureon is already available in some countries in the EU. Alkermes has co-developed the drug with Amylin Pharmaceuticals, Inc. (AMLN). We are also pleased by the pipeline progress at Alkermes.

In view of these positives, we believe that there is significant scope for stock price appreciation from current levels.

 
ALKERMES INC (ALKS): Free Stock Analysis Report
 
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