ALKS · Alkermes
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $40.00
Note written ·
Price against the kill line
17.6% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $40.00, on record since 10 November 2026. The shares are down 5.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $40.00, which would take the shares under the 8 October 2026 close of $40.11 and erase the post-report recovery. A cut to the $1.730–1.840 billion full-year 2026 revenue range or a failed Vibrance-3 study would also show the case failing.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 3 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 480
- Revenue, change on a year (%)
- +21.8
- Gross margin (%)
- 80.4
- Operating margin (%)
- 7.5
- Net cash, cash less debt ($M)
- −756
- Enterprise value to sales (×)
- 4.9
- Enterprise value to operating income (×)
- 134.9
All filed numbers
What Alkermes reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 480 | +21.8 | 80.4 | 7.5 |
| first filed | 496 | +27.0 | 80.2 | 3.7 |
| first filed | 393 | +28.2 | 84.3 | −12.3 |
| first filed | 385 | −10.6 | 88.0 | 15.1 |
| first filed | 394 | +4.2 | 86.9 | 22.6 |
| first filed | 391 | −2.1 | 87.3 | 23.8 |
| Pre-tax income ($M) | 14.7 |
| Net income ($M) four quarters: −0.4 | 16.3 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +4.7 |
| Operating cash flow ($M) | 243 |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 756 |
| Debt ($M) long-term debt | 1,512 |
| Net cash, cash less debt ($M) | −756 |
| Deferred revenue ($M) at 31 December 2025, filed 25 February 2026; −100.0% on a year | 0.0 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 459 |
| Inventory ($M) | 261 |
| Shareholders' equity ($M) | 1,865 |
| Market value ($M) | 7,903 |
| Enterprise value, market value plus net debt ($M) | 8,659 |
| Enterprise value to sales (×) | 4.9 |
| Enterprise value to operating income (×) | 134.9 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 4.2 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 11.3% of shares outstanding sold short, 9.1 days of average trading to cover, +6.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $698K |
| 12 monthsfrom | $0 | $10.1M |
The thesis
Alkermes plc's shares are modestly more likely to beat the S&P 500 over the next three months. Its commercial products are growing faster than guided, and a new patent settlement removes a generic threat to LYBALVI until 2039. The Vibrance-3 idiopathic hypersomnia study, guided to complete in the fourth quarter of 2026, decides whether the orexin sleep-drug pipeline adds to that.
On 3 November 2026 the company reported third-quarter 2026 revenue of $480.1 million, above its own $450–470 million guidance, and kept full-year 2026 revenue guidance at $1.730–1.840 billion. On 12 November 2026 an 8-K (Item 1.01) disclosed a settlement with Teva Pharmaceuticals that resolves the LYBALVI patent suit in New Jersey federal court. Teva receives a non-exclusive, royalty-free license to sell its generic from 12 November 2039, or 12 May 2040 if Alkermes obtains pediatric exclusivity, or earlier under certain circumstances. The agreement is subject to review by the Federal Trade Commission and the Department of Justice, and the filing discloses no payment terms.
The shares closed at $46.98 on 12 November 2026, above the 50-day average of $43.67 and the 200-day average of $41.06. The price already reflects the third-quarter beat. In this view it does not yet reflect a positive Vibrance-3 result, and that is what the call turns on.
Bullish and bearish views on Alkermes plc
The bull case on Alkermes plc (ALKS), in brief: revenue beat the guidance range. The bear case: LUMRYZ slipped from the second quarter.
Bull case
- Revenue beat the guidance range. Alkermes reported third-quarter 2026 revenue of $480.1 million on 3 November 2026, against $394.2 million a year earlier. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization, adjusted) was $120.1 million, per the company's 8-K exhibit.
- LYBALVI generic entry pushed out. The Teva settlement, dated 6 November 2026 and disclosed on 12 November 2026, sets the license start at 12 November 2039 at the earliest absent other circumstances. LYBALVI sales were $95.9 million in the third quarter of 2026.
- Core franchises held up. Third-quarter 2026 sales were $127.6 million for VIVITROL, $103.9 million for ARISTADA and $95.9 million for LYBALVI, per the 8-K. VIVITROL was $121.1 million in the third quarter of 2025.
- Cash balance rose. Cash, cash equivalents and total investments were $787.6 million at 30 September 2026, up from $691.6 million at 30 June 2026, despite $29.8 million of Avadel acquisition-related costs in the quarter.
- Analysts raised targets after the report. On 4 November 2026 Wells Fargo kept Overweight and raised its target to $68. RBC kept Outperform and raised its target to $57 from $56. HC Wainwright kept Neutral and raised its target to $50.
- Orexin pipeline widened. Alixorexton met both primary endpoints in the Vibrance-2 narcolepsy type 2 study on 17 June 2026. Alkermes started a phase 2 study of ALKS 7290 in major depressive disorder on 30 October 2026.
Bear case
- LUMRYZ slipped from the second quarter. LUMRYZ sales were $89.9 million in the third quarter of 2026 against $96.6 million in the second, with about 4,100 patients on therapy, per the 8-K. LUMRYZ came with the February 2026 Avadel acquisition and is the largest new revenue source.
- VIVITROL loses exclusivity in January 2027. BofA's 29 June 2026 note dates the loss to January 2027. VIVITROL was $127.6 million of third-quarter revenue, the company's largest single product. The Teva settlement covers LYBALVI only.
- Profit fell despite higher sales. GAAP net income was $16.3 million ($0.09 per diluted share) in the third quarter of 2026 against $82.8 million a year earlier, per the 8-K. Intangible amortization was $19.7 million.
- No fourth-quarter guidance. The 3 November 2026 release reiterated the full-year range and gave no fourth-quarter figure. The $110 million width of the range leaves room for a soft final quarter.
- Vibrance-3 timing is unconfirmed. The company guided study completion for the fourth quarter of 2026 but has not set a topline date. Registry entries describe an eight-week, placebo-controlled study of about 96 patients with change in Epworth Sleepiness Scale score as the primary endpoint.
Price setup
The shares closed at $46.98 on 12 November 2026, 15.6% below the 52-week high of $55.67 (intraday, 7 July 2026). The three-month change is −4.2%, measured from the $49.06 close of 14 August 2026. The 52-week closing low is $27.20 on 18 March 2026.
Closes rose from $44.54 on 5 November 2026 to $47.89 on 11 November 2026, then eased to $46.98. The 6 November 2026 close of $45.90 and the 10 November 2026 close of $46.47 sit between those levels. The recent low is the $40.11 close of 8 October 2026, which also marks the price at which Chief Financial Officer Joshua Reed's option shares were withheld for tax, per his Form 4.
SEC Form 4 filings show Chief Legal Officer David Gaffin sold 2,035 shares at $46.17 on 3 November 2026 under a Rule 10b5-1 plan, the same plan size as his sales of 2,034 shares on 3 September 2026 at $48.01 and on 2 October 2026 at $41.03. Chief Medical Officer Craig Hopkinson sold 9,000 shares at $46.99 on 1 September 2026 under a Rule 10b5-1 plan. Sales at a steady size across a $41–48 price range show a schedule, not a reaction to the price.
Catalysts ahead
- 18 November 2026: Alkermes fireside chat at the Jefferies Global Healthcare Conference, London. Management framing of VIVITROL generic entry, 2027 revenue and Vibrance-3 timing bears on how much commercial cash funds the pipeline.
- ~31 December 2026 (est.): Vibrance-3 phase 2 idiopathic hypersomnia study completion, guided for the fourth quarter of 2026. A second sleep-disorder result for alixorexton tests whether the Vibrance-2 narcolepsy gains extend to another indication; the topline date is unconfirmed.
- January 2027 (est.): VIVITROL loss of exclusivity, per BofA. VIVITROL was $127.6 million of third-quarter 2026 revenue, so generic entry sets the pace of the commercial business that funds the pipeline.
What would change the view
A daily close below $40.00, which would take the shares under the 8 October 2026 close of $40.11 and erase the post-report recovery. A cut to the $1.730–1.840 billion full-year 2026 revenue range or a failed Vibrance-3 study would also show the case failing.
The risks this note tracks, each with what would confirm it:
- LUMRYZ sales keep falling after the Avadel acquisition, weakening the new commercial franchise. Confirmed by: fourth-quarter 2026 LUMRYZ sales below the $89.9 million reported for the third quarter of 2026.
- Full-year revenue lands at the low end of guidance as VIVITROL exclusivity nears. Confirmed by: full-year 2026 revenue below $1.730 billion or a cut to the guided range.
- Vibrance-3 or the ALKS 7290 placebo-controlled studies fail to separate from placebo. Confirmed by: a topline release showing no significant benefit versus placebo on the primary endpoint.
- Regulators challenge the Teva settlement, or another generic filer contests LYBALVI patents, reopening early generic entry. Confirmed by: an FTC or DOJ objection to the settlement, or a new Paragraph IV patent challenge disclosed in an Alkermes filing.
What it trades with
Alkermes trades as a specialty pharmaceutical company in the middle of a shift. Older addiction and schizophrenia drugs (VIVITROL, ARISTADA, LYBALVI) fund a newer sleep franchise (LUMRYZ and the alixorexton pipeline). Its moves come mainly from its own trial readouts, patent rulings and quarterly reports, as the 17 June 2026 Vibrance-2 result and the 3 November 2026 report showed.
Readouts from other orexin-agonist developers are the most likely outside influence. In this view, a strong or weak competing result would change how investors value alixorexton's market position.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $480.1 million versus $394.2 million a year earlier; GAAP net income $16.3 million versus $82.8 million; adjusted EBITDA $120.1 million. Alkermes third-quarter 2026 results, SEC Form 8-K Exhibit 99.1 · as of
- Third-quarter 2026 sales: VIVITROL $127.6 million, ARISTADA $103.9 million, LYBALVI $95.9 million, LUMRYZ $89.9 million (about 4,100 patients on therapy). Alkermes third-quarter 2026 results, SEC Form 8-K Exhibit 99.1 · as of
- Cash, cash equivalents and total investments were $787.6 million at 30 September 2026, up from $691.6 million at 30 June 2026. Alkermes third-quarter 2026 results, SEC Form 8-K Exhibit 99.1 · as of
- Alkermes affirmed full-year 2026 revenue guidance of $1.730–1.840 billion and gave no fourth-quarter figure. Alkermes third-quarter 2026 results release · as of
- Alkermes settled the LYBALVI patent suit with Teva; Teva's generic license starts 12 November 2039 (12 May 2040 if pediatric exclusivity is granted), royalty-free, subject to FTC and DOJ review; no payments disclosed. Alkermes Form 8-K, Item 1.01, filed 12 November 2026 · as of
- Wells Fargo kept Overweight and raised its target to $68; RBC raised its target to $57 from $56; HC Wainwright kept Neutral and raised its target to $50. Benzinga analyst-action reports · as of
- Alixorexton met both primary endpoints in the Vibrance-2 phase 2 study in narcolepsy type 2. Alkermes release, reported by Benzinga · as of
- Chief Legal Officer David Gaffin sold 2,035 shares at $46.17 under a Rule 10b5-1 plan. SEC Form 4 filed 3 November 2026 · as of
Sources
- SEC EDGAR ·
- SEC EDGAR
- Alkermes Q3 2026 slides: revenue jumps 22% as profits decline · investing.com
- Upcoming Investor Conferences for Alkermes · biopharmawatch.com ·
- Clinical Trials Arena