Alkermes falls on earnings miss, FY2026 loss forecast
Avadel acquisition costs and elevated R&D spending pressure near-term profitability despite revenue growth
Alkermes shares slumped Wednesday after the biopharmaceutical company reported fourth-quarter earnings that missed analyst expectations and issued fiscal 2026 guidance projecting a net loss, as costs from its recent Avadel acquisition and elevated research spending weigh on near-term profitability.
The Dublin-based company reported fourth-quarter earnings per share of $0.29, falling short of the $0.39 consensus estimate—a 24.9% miss. Revenue of $384.5 million beat expectations by 8%, but net income plummeted 66% year-over-year to $49.3 million.
Looking ahead, Alkermes guided to fiscal 2026 GAAP net loss of $115-135 million, despite projecting revenue growth to $1.73-1.84 billion. The company expects adjusted EBITDA of $370-410 million, essentially flat compared to fiscal 2025.
The profitability pressure stems primarily from integration costs related to Alkermes' $775 million acquisition of Avadel Pharmaceuticals, completed earlier this month. The deal includes a $150 million inventory step-up charge, while research and development spending is projected to reach $445-485 million.
The Avadel deal, which added LUMRYZ® to Alkermes' product portfolio, accelerates the company's entry into the sleep medicine market. However, the transaction has drawn mixed reactions from analysts, with some questioning the competitive landscape and potential overpayment, while others view it as a move to de-risk the clinical pipeline.
The earnings report comes just one day after Alkermes announced a CEO succession plan, with Blair Jackson set to succeed founder Richard Pops on August 1, 2026. Pops will retire after more than three decades leading the company he built from a startup into a commercial-stage biopharmaceutical business with a $5.3 billion market capitalization.
Despite the earnings miss and disappointing forward guidance, analysts remain broadly positive on the stock. Of 17 analysts covering the company, 14 rate it a buy or strong buy, while three recommend hold, according to market data. The consensus price target of $43.88 represents roughly 32% upside from current levels.
Alkermes' portfolio includes products targeting central nervous system disorders, including treatments for schizophrenia, depression, alcohol dependence and opioid use disorder. The company's revenue has grown steadily, with trailing twelve-month revenue reaching $1.52 billion.
Investors will be watching closely how management integrates the Avadel business and manages the transition to new leadership while navigating the profitability challenges outlined in the 2026 guidance. The success of LUMRYZ in the competitive sleep disorder market will be particularly important to watch as the company seeks to justify the acquisition's price tag.