Alkermes is the IBD Stock Of The Day after strong first-quarter sales of its new bipolar treatment, Lybalvi, led Alkermes stock to break out.
The Lybalvi launch is going well, Evercore ISI analyst Umer Raffat said in a report to clients. Alkermes won Food and Drug Administration approval for Lybalvi last June. Lybalvi sales were $14 million in the first quarter, above forecasts for $10 million.
"If Lybalvi growth continues at the same momentum, and even if gross-to-net expands a bit, you can see Lybalvi tracking at about $80 million (i.e., north of the high end of guidance)," he said.
Lybalvi wasn't the only bright spot in Alkermes' report. All three of the company's wholly owned drugs beat expectations.
In response, Alkermes stock popped 11.9% to 30.38. On a year-to-date basis, Alkermes shares have climbed more than 30% vs. a double-digit decline for the SPDR S&P Biotech exchange traded fund.
Alkermes Stock: Three Key Drugs Top
During the first quarter, Alkermes earned 12 cents per share, minus some items, on $279 million in sales. Earnings climbed by a penny year over year and beat analyst projections for 3 cents per share. Sales topped forecasts by about $22 million and grew nearly 11%.
Among its three key products, the biggest growth came from schizophrenia treatment Aristada. Aristada sales surged close to 31%, hitting $72.5 million. Revenue from its alcohol and/or opioid dependence treatment, Vivitrol, rose 14% to almost $85 million.
Manufacturing and royalty revenues sank about 12% to nearly $120 million.
However, "it is interesting that management reiterated its 2022 guidance following the strong beat in top-line results," SVB Leerink analyst Marc Goodman said in his note to clients. He kept his market perform rating on Alkermes stock.
For the year, the company expects $1 billion to $1.09 billion in sales. That includes $355 million to $385 million from Vivitrol, $290 million to $320 million from Aristada and $55 million to $75 million from Lybalvi.
Highly Rated Biotech Stock
Following the earnings report, Alkermes stock broke out of a cup with handle with a buy point at 30.12, according to MarketSmith.com. The biotech stock struggled to stay within the buy zone, which runs from 30.12 to 31.63.
Shares also have a Composite Rating of 88 out of a best-possible 99, IBD Digital shows. Further, Alkermes stock has a strong Relative Strength Rating of 87, putting its 12-month stock price performance in the top 13% of all stocks. Leading stocks tend to have RS Ratings of at least 80.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
