Alkermes, Inc. (ALKS)

NetscribeBiotech (78.13) Submitted: 2/13/07 6:33 AM : Start Price: $16.54 ALKS Score: -1.46

Alkermes, Inc. (Alkermes) is a biotechnology company that develops products based on drug delivery technologies. The company has two commercial products: Risperdal Consta (risperidone), for use in schizophrenia and Vivitrol, a once-monthly injection for the treatment of alcohol dependence.

Alkernes business strategy is focused on identifying drugs with huge commercial potential and improving upon its delivery technology so as to improve its efficacy and convenience.

The key drivers for this stock would be the ramp up in sales of its existing products which are still passing through growth phase and news flow on its promising pipe-line. Their pipe-line includes Exenatide LAR which improves the delivery efficacy of successful Eli-Lilly drug Byetta and AIR insulin which is inhaled insulin and is intended to replace the needles that is used today. The approval of Pfizer’s Exubera by U.S Food and Drug Administration, which also employs inhaler method has somewhat reduced the regulatory risk for AIR insulin.

Alkermes drug delivery technology platform is impressive and as a result they are able to attract the biggies as their drug development and commercialization partners. Including Johnson and Johnson for Risperdal Consta; Eli Lilly, a leader in diabetes, for AIR Insulin and Exenatide LAR; and Cephalon for Vivitrol..

The risks the company faces would be the usual risk associated with clinical trails. Besides a second-generation injectable Risperdal is under development by Johnson and Johnson, which could cannibalize the sales of Risperdal Consta.

To conclude, given the technological prowess of its delivery platform, niche positioning and stock valuation which is expensive but not insane, the stock is likely to outperform.

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