Alkermes 'Taking A Pause,' Citi Says; Downgrades To Neutral

In a report issued Friday morning, analysts at Citi downgraded shares of Alkermes Plc ALKS from Buy to Neutral, and trimmed their price target from $83 to $71, following multiple data readouts. The firm models $2.7 billion in peak non-risk-adjusted sales ($1.8 billion if adjusted by risk) for the company's principal pipeline assets (aripiprazole lauroxil, ALKS 5461, ALKS 3831, ALKS 8700). Nonetheless, they see limited catalysts over the near term to drive an increase in their peak sales assumptions and/or a change in their risk adjustments, the report states. While they remain constructive on the company's lead pipeline assets, they note that "each will be launching into markets with additional branded and/or generic competitors. Consequently, market access dynamics and marketing capabilities will constitute an important role in realizing the sales potential of each compound," Citi analysts think. They highlight that the commercial launch is an "increasingly important factor to consider," and say they believe the launch of aripiprazole lauroxil is likely to be slow, which is not a minor detail. Two extra issues that the report points out are: - ALKS 5461 Phase III data readouts (expected in early 2016) will be the next major inflection point - "ALKS 3831 the most likely compound to be used in the first line setting."