Alkermes Plc (ALKS), Eli Lilly & Co. (LLY), AstraZeneca plc (ADR) (AZN): Tackling Pain and Addiction

Alkermes’ pain-reliever development drug is called Alks 7106. Alks 7106 is a small molecule MME, which is derived from Alkermes’ opioid modulator platform. The drug is taken orally, and in studies with rats, it has been shown to be 30 times more potent than morphine. In addition, the inherent properties of the molecule limit the potential for abuse and overdose death, plus there was a ceiling effect on the dosage, which further restricts the possibility for abuse. A phase 1 study is not expected until 2014, but Alkermes has a product that could revolutionize pain management.

The outlook

Alkermes hasn’t the broad spectrum of products as an Eli Lilly & Co. (NYSE:LLY), Bristol-Myers Squibb, or AstraZeneca plc (ADR) (NYSE:AZN). However, it trades at a relatively competitive price-per-sales against its larger peers: Alkermes P/S of 7.9 isn’t far from the 4.3 of Bristol-Myers Squibb, although it’s outgunned by the 2.5 of Eli Lilly & Co. (NYSE:LLY) or the 2.4 of AstraZeneca plc (ADR) (NYSE:AZN).  It has a positive cash flow of $144 million a year, with cash on hand of $228 million.

For next quarter, sales of Risperdal Consta and Invega Sustenna should bring an additional $2.2 million if Alkermes was to match the average 3.6% quarterly growth enjoyed by Abilify; a further $1.6 million will come from Vivitrol if it delivered on 10% growth. Further losses in Tricor will probably offset any gain from royalties in Ampyra and Fampyra. Collectively, this gives a revenue projection of $142 million for Q2, which is $3 million shy of Wall Street estimates.

The article Tackling Pain and Addiction originally appeared on Fool.com and is written by Declan Fallon.

Declan Fallon does not own shares in the stocks featured in this article. The Motley Fool has no position in any of the stocks mentioned.

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