Price Forecast:

Bullish Case: Alkermes is well-positioned for near-term growth due to the expanding schizophrenia drug market and strong proprietary product portfolio, supporting revenue increases and price appreciation.

Bearish Case: Generic competition for Vivitrol starting in 2027 could significantly harm long-term revenues, compounded by investor skepticism reflected in high put option volume.

Potential Outcomes:

1. 65%: Continued revenue growth from schizophrenia drug demand.

2. 25%: Stake reductions by investors leading to price volatility.

3. 10%: Regulatory changes affecting drug approvals, impacting market sentiment.

Trading Oracle: Consider a bullish debit spread by buying ALKS 29.00 calls and selling 30.00 calls targeting a price rise above $30. This leverages favorable volatility and is positioned against potential long-term risks. Strong alignment with near-term bullish sentiment suggests a high probability of profit.

November 24, 2024