Alkermes Inc. shares rose Friday after an analyst predicted stronger sales of its schizophrenia drug Risperdal Consta and good clinical data for a diabetes drug candidate.
Jim Reddoch of Friedman Billings Ramsey placed Alkermes shares on the FBR "Top Picks" list, a portfolio of recommended securities. He also raised his price target to $18 per share from $15.
He said Johnson & Johnson's schizophrenia drug candidate Paliperidone palmitate looks less effective than Consta, and may have safety issues.
He added that Johnson & Johnson's royalty payments to Elan Corp. for palmitate will be the same, or greater, than its payments to Alkermes on Consta sales. That means Johnson & Johnson has no economic incentive to switch Consta patients to palmitate, he said.
Reddoch predicted greater sales of Risperdal Consta as a result, raising his peak sales estimate to $2 billion in 2013, from $1.6 billion.
Paliperidone palmitate is designed to be a long-acting version of the older drug Invega, using technology developed by Elan. Alkermes makes Risperdal Consta, and shares sales royalties with Johnson & Johnson. The drug is the source of most of Alkermes' revenue.
Reddoch also said Alkermes' long-acting diabetes drug Exenatide LAR will get special attention at a diabetes conference in June. Competing drug candidates, including Novo Nordisk A/S' liraglitude and Roche's R1583, were not chosen for similar sessions, indicating that doctors are more excited about Exenatide.
If Exenatide is approved Alkermes will receive royalties on sales. The drug is a longer-lasting version of Byetta, and is being developed by Alkermes, Amylin Pharmaceuticals Inc. and Eli Lilly & Co.
Alkermes shares rose 47 cents, or 3.5 percent, to $13.75.
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