Alkermes plc (ALKS)

Shares of Alkermes Plc (ALKS) dropped by 7.39% from $25.32 to $23.45 in the trading on Wednesday, October 25, 2023. The reason why ALKS stock down is due to the concern about the company's experimental drug, ALKS 2680, despite strong Q3 financial results:

• Q3 strong results: Q3 revenue reached $380.9 million, up nearly 51% YoY, surpassing the $362.1 million analyst estimate. The company saw substantial earnings improvement, with a GAAP profit of $47.8 million compared to a loss of $64 million in the previous year. Non-GAAP profit was $109.5 million, exceeding expectations at $0.64 per diluted share compared to $0.02 per share in Q3 2022 (consensus estimate was $0.43).
• Stock Decline Despite Earnings Beat: Despite surpassing revenue and earnings estimates, Alkermes' stock price experienced a significant decline. The reason for this downturn can be traced back to earlier in the week when the company announced preliminary results from a phase 1 clinical study evaluating its experimental drug ALKS 2680 for treating narcolepsy. These results raised concerns about the drug's duration of activity after dosing and its potential limitations in treating other sleep disorders.

Shares of Alkermes plc (ALKS) dropped by 9.59% from $27.02 to $24.43 in the trading on Monday, October 23, 2023. The reason why ALKS stock down is due to disappointing test results for Alkermes' experimental narcolepsy treatment:

• The study involved four patients with type 1 narcolepsy, and the treatment showed some effectiveness, extending the time before patients fell asleep by varying amounts. However, the market reacted with caution due to concerns about the drug's narrow therapeutic window and its applicability to other sleep disorders.
• Analysts have mixed opinions, with one emphasizing the drug's activity and another pointing out the need for more data to assess the optimal dose. The market's response may have been an overreaction to these early Phase 1b results, given the small sample size. Investors' cautious approach led to the decline in Alkermes plc's stock price.