Eli Lilly to Acquire Centessa for $6.3B, RBC Bullish on Alkermes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7 hours ago
0mins
Should l Buy ALKS?
After Eli Lilly (LLY) announced the intent to acquire Centessa (CNTA) for $6.3B in cash plus an additional $1.5B split across 3 contingent value rights, RBC Capital said the deal highlights large pharma interest in the sleep space and "underscores what could likely be a large indication," which is "favorable" for Alkermes (ALKS). The firm, which thinks Alkermes' current share price is undervaluing the orexin program alone given comps, notwithstanding the profitable core business, has an Outperform rating and $45 price target on the shares.
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Analyst Views on ALKS
Wall Street analysts forecast ALKS stock price to rise
12 Analyst Rating
10 Buy
2 Hold
0 Sell
Strong Buy
Current: 30.150
Low
37.00
Averages
46.20
High
58.00
Current: 30.150
Low
37.00
Averages
46.20
High
58.00
About ALKS
Alkermes plc is Ireland-based biopharmaceutical company that seeks to develop medicines in the field of neuroscience. The Company has a portfolio of commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of clinical and preclinical candidates in development for neurological disorders. It focuses on commercial products, such as LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL, and advancing the development of pipeline programs focused on neurological disorders. LYBALVI is a once-daily, oral atypical antipsychotic drug for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder, as a maintenance monotherapy or for the acute treatment of manic or mixed episodes, as monotherapy or an adjunct to lithium or valproate. ARISTADA is an extended-release intramuscular injectable suspension for the treatment of schizophrenia. It has a manufacturing facility in Wilmington, Ohio.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Alkermes Shares Surge 15% Following Lilly-Centessa Deal
- Clinical Trial Progress: Alkermes' alixorexton demonstrated statistically significant improvements in wakefulness during mid-stage studies compared to placebo, indicating its potential in treating narcolepsy and attracting interest from large pharma companies.
- Positive Market Reaction: Following Eli Lilly's acquisition of Centessa, Alkermes shares surged 15%, reflecting market optimism regarding its prospects in the sleep disorder space, particularly with its developing orexin 2 receptor drug.
- Analyst Outlook: RBC Capital highlighted that the Lilly-Centessa deal underscores large pharma interest in the sleep sector, assigning Alkermes an 'Outperform' rating with a $45 price target, suggesting the stock is undervalued based on its orexin program alone.
- Retail Investor Sentiment Shift: On Stocktwits, retail sentiment around Alkermes stock shifted from 'neutral' to 'bullish' in the past 24 hours, with message volume increasing from 'low' to 'normal' levels, indicating rising interest in the stock.
See More
Alkermes Launches Mental Health Nursing Grant Program
- Grant Program Launch: Alkermes plc announced the opening of applications for the Alkermes Pathways APN Research Awards™ program starting March 16, 2026, designed to support research by psychiatric-mental health nurse practitioners with grants up to $10,000, reflecting the company's ongoing commitment to mental health.
- Eligibility Criteria: Applicants must be licensed psychiatric-mental health nurse practitioners engaged in clinical, academic, or community health settings, holding a doctoral degree or having a qualified co-investigator, ensuring the professionalism and effectiveness of the research.
- Review Process: All applications will be reviewed by an independent committee composed of prominent researchers in the field, ensuring the scientific rigor and clinical relevance of funded projects, thereby enhancing the quality of patient care.
- Industry Impact: This program not only provides significant research opportunities for nurse practitioners but also aims to advance clinical practices related to serious mental illnesses, such as schizophrenia and bipolar I disorder, further solidifying Alkermes' leadership in the mental health sector.
See More
Alkermes 2026 Financial Outlook and Acquisition Progress
- Revenue Growth Expectations: Alkermes anticipates total revenues exceeding $1.73 billion in 2026, with adjusted EBITDA projected between $370 million and $410 million, indicating a strategic decision to diversify income following the Avadel acquisition.
- Strategic Significance of Avadel Acquisition: CEO Richard F. Pops emphasized that the acquisition not only adds a new revenue stream but also accelerates Alkermes' entry into the commercial sleep medicine market, particularly through LUMRYZ and the upcoming launch of alixorexton.
- Strong Product Sales Performance: In 2025, Alkermes reported proprietary product sales of $1.2 billion, a 9% year-over-year increase, with LUMRYZ contributing approximately $279 million in net sales, expected to continue growing in 2026, further solidifying market position.
- Financial Health Status: The company ended 2025 with $1.3 billion in cash and investments, maintaining good financial flexibility to support future growth despite utilizing $775 million for the Avadel acquisition and taking on $1.525 billion in long-term loans.
See More
Alkermes Reports Decline in Q4 Earnings
- Earnings Decline: Alkermes plc reported a fourth-quarter net income of $49.34 million, translating to $0.29 per share, which represents a significant drop from last year's $146.50 million and $0.88 per share, indicating a marked decline in the company's profitability.
- Revenue Decrease: The company's revenue for the fourth quarter was $384.54 million, a 10.6% decrease from $429.98 million last year, reflecting weakened market demand and increased competition.
- Financial Performance Comparison: Alkermes' earnings per share fell by 66.0% compared to the same period last year, which not only impacts investor confidence but may also pressure the stock price and affect the company's future financing capabilities.
- Uncertain Market Outlook: With both earnings and revenue declining, Alkermes faces greater market challenges and may need to reassess its strategy to cope with industry changes and competitive pressures.
See More
Alkermes Reports 2025 Financial Results and 2026 Outlook
- Financial Performance Overview: Alkermes plc reported its financial results for the quarter and year ended December 31, 2025, indicating continued growth expectations for 2026, although specific figures were not disclosed, reflecting the company's stability and potential in the biopharmaceutical sector.
- Investor Call Arrangement: The company will host a conference call and webcast at 8:00 a.m. EST (1:00 p.m. GMT) to discuss financial results and future outlook, enhancing communication and transparency with investors.
- Product Portfolio and R&D: Alkermes focuses on neuroscience, with proprietary commercial products for alcohol and opioid dependence, and is developing late-stage clinical candidates for narcolepsy and other neurological disorders, demonstrating its commitment to innovative drug development.
- Global Business Presence: Headquartered in Ireland, Alkermes has a research and development center in Massachusetts and a manufacturing facility in Ohio, indicating its global business expansion and technical capabilities.
See More
Alkermes Q4 Earnings Report Analysis
- Earnings Performance: Alkermes reported a Q4 GAAP EPS of $0.29, missing expectations by $0.05, indicating pressure on profitability that could affect investor confidence.
- Revenue Decline: The company generated $384.5 million in revenue, a 10.6% year-over-year decline, although it beat market expectations by $3.01 million, yet the ongoing revenue drop poses challenges for future growth.
- 2026 Financial Outlook: Total revenue expectations for 2026 are set between $1.73 billion and $1.84 billion, below the market consensus of $1.83 billion, reflecting cautious sentiment regarding the company's future growth prospects.
- Cost and Expenditure: Projected R&D expenses for 2026 are between $445 million and $485 million, while SG&A expenses are expected to range from $890 million to $930 million, highlighting the company's strategic focus on cost control and R&D investment.
See More
Alkermes Shares Surge 15% Following Lilly-Centessa Deal
- Clinical Trial Progress: Alkermes' alixorexton demonstrated statistically significant improvements in wakefulness during mid-stage studies compared to placebo, indicating its potential in treating narcolepsy and attracting interest from large pharma companies.
- Positive Market Reaction: Following Eli Lilly's acquisition of Centessa, Alkermes shares surged 15%, reflecting market optimism regarding its prospects in the sleep disorder space, particularly with its developing orexin 2 receptor drug.
- Analyst Outlook: RBC Capital highlighted that the Lilly-Centessa deal underscores large pharma interest in the sleep sector, assigning Alkermes an 'Outperform' rating with a $45 price target, suggesting the stock is undervalued based on its orexin program alone.
- Retail Investor Sentiment Shift: On Stocktwits, retail sentiment around Alkermes stock shifted from 'neutral' to 'bullish' in the past 24 hours, with message volume increasing from 'low' to 'normal' levels, indicating rising interest in the stock.
See More
Alkermes Launches Mental Health Nursing Grant Program
- Grant Program Launch: Alkermes plc announced the opening of applications for the Alkermes Pathways APN Research Awards™ program starting March 16, 2026, designed to support research by psychiatric-mental health nurse practitioners with grants up to $10,000, reflecting the company's ongoing commitment to mental health.
- Eligibility Criteria: Applicants must be licensed psychiatric-mental health nurse practitioners engaged in clinical, academic, or community health settings, holding a doctoral degree or having a qualified co-investigator, ensuring the professionalism and effectiveness of the research.
- Review Process: All applications will be reviewed by an independent committee composed of prominent researchers in the field, ensuring the scientific rigor and clinical relevance of funded projects, thereby enhancing the quality of patient care.
- Industry Impact: This program not only provides significant research opportunities for nurse practitioners but also aims to advance clinical practices related to serious mental illnesses, such as schizophrenia and bipolar I disorder, further solidifying Alkermes' leadership in the mental health sector.
See More
Alkermes 2026 Financial Outlook and Acquisition Progress
- Revenue Growth Expectations: Alkermes anticipates total revenues exceeding $1.73 billion in 2026, with adjusted EBITDA projected between $370 million and $410 million, indicating a strategic decision to diversify income following the Avadel acquisition.
- Strategic Significance of Avadel Acquisition: CEO Richard F. Pops emphasized that the acquisition not only adds a new revenue stream but also accelerates Alkermes' entry into the commercial sleep medicine market, particularly through LUMRYZ and the upcoming launch of alixorexton.
- Strong Product Sales Performance: In 2025, Alkermes reported proprietary product sales of $1.2 billion, a 9% year-over-year increase, with LUMRYZ contributing approximately $279 million in net sales, expected to continue growing in 2026, further solidifying market position.
- Financial Health Status: The company ended 2025 with $1.3 billion in cash and investments, maintaining good financial flexibility to support future growth despite utilizing $775 million for the Avadel acquisition and taking on $1.525 billion in long-term loans.
See More
Alkermes Reports Decline in Q4 Earnings
- Earnings Decline: Alkermes plc reported a fourth-quarter net income of $49.34 million, translating to $0.29 per share, which represents a significant drop from last year's $146.50 million and $0.88 per share, indicating a marked decline in the company's profitability.
- Revenue Decrease: The company's revenue for the fourth quarter was $384.54 million, a 10.6% decrease from $429.98 million last year, reflecting weakened market demand and increased competition.
- Financial Performance Comparison: Alkermes' earnings per share fell by 66.0% compared to the same period last year, which not only impacts investor confidence but may also pressure the stock price and affect the company's future financing capabilities.
- Uncertain Market Outlook: With both earnings and revenue declining, Alkermes faces greater market challenges and may need to reassess its strategy to cope with industry changes and competitive pressures.
See More
Alkermes Reports 2025 Financial Results and 2026 Outlook
- Financial Performance Overview: Alkermes plc reported its financial results for the quarter and year ended December 31, 2025, indicating continued growth expectations for 2026, although specific figures were not disclosed, reflecting the company's stability and potential in the biopharmaceutical sector.
- Investor Call Arrangement: The company will host a conference call and webcast at 8:00 a.m. EST (1:00 p.m. GMT) to discuss financial results and future outlook, enhancing communication and transparency with investors.
- Product Portfolio and R&D: Alkermes focuses on neuroscience, with proprietary commercial products for alcohol and opioid dependence, and is developing late-stage clinical candidates for narcolepsy and other neurological disorders, demonstrating its commitment to innovative drug development.
- Global Business Presence: Headquartered in Ireland, Alkermes has a research and development center in Massachusetts and a manufacturing facility in Ohio, indicating its global business expansion and technical capabilities.
See More
Alkermes Q4 Earnings Report Analysis
- Earnings Performance: Alkermes reported a Q4 GAAP EPS of $0.29, missing expectations by $0.05, indicating pressure on profitability that could affect investor confidence.
- Revenue Decline: The company generated $384.5 million in revenue, a 10.6% year-over-year decline, although it beat market expectations by $3.01 million, yet the ongoing revenue drop poses challenges for future growth.
- 2026 Financial Outlook: Total revenue expectations for 2026 are set between $1.73 billion and $1.84 billion, below the market consensus of $1.83 billion, reflecting cautious sentiment regarding the company's future growth prospects.
- Cost and Expenditure: Projected R&D expenses for 2026 are between $445 million and $485 million, while SG&A expenses are expected to range from $890 million to $930 million, highlighting the company's strategic focus on cost control and R&D investment.
See More
