Alkermes (Alkermes (ALKS)) is having a good day. The biotech's stock climbed more than 6% on Tuesday after the company announced that its sleep disorder drug LUMRYZ passed a major test with flying colors.
The positive results come from the REVITALYZ phase 3 study, which tested LUMRYZ in patients with idiopathic hypersomnia — a condition that basically means you're excessively sleepy during the day for no obvious reason. The drug, which is already approved for narcolepsy, showed statistically significant improvements in both excessive daytime sleepiness and patient-reported disease severity compared to a placebo.
Alkermes plans to file a supplemental New Drug Application with the FDA by the end of 2026. If approved, LUMRYZ would be the first treatment specifically for idiopathic hypersomnia, a market that analysts see as underpenetrated.
But here's the catch: even if the FDA gives the green light, Alkermes can't actually market the drug for idiopathic hypersomnia until March 1, 2028. That's because of a settlement and license agreement the company previously disclosed. So while the clinical win is real, the commercial payoff is still a couple of years away.
Investors don't seem to mind. The stock is trading at $37.84, a new 52-week high, and the healthcare sector is the best-performing sector today, up 2.43%. The broader market is mixed — the S&P 500 is down 0.7% — but Alkermes is bucking the trend.
Technically, the stock looks strong. It's trading 9.1% above its 20-day simple moving average of $34.22, and the MACD is above its signal line, suggesting momentum is building. Key resistance sits at $36.60, which was the previous 52-week high — and the stock has already blown past that. Support is around $33.00, where buyers have stepped in before.
Analysts are on board. The stock carries a Buy consensus with an average price target of $45.67. Recent moves include UBS raising its target to $48, Wells Fargo to $44, and Needham to $50 — all on May 6. That's a lot of confidence in a drug that won't generate revenue for another two years, but the clinical data speaks for itself.
For now, Alkermes is riding a wave of good news. The question is whether the stock can hold these gains until 2028.
