Alkermes: Idiopathic Hypersomnia Could Expand Lumryz Into A Larger Growth And Margin Driver

Alkermes is positioned for significant growth through LUMRYZ’s potential expansion into idiopathic hypersomnia (IH), following positive Phase 3 results. LUMRYZ’s IH indication could drive incremental revenue, leveraging existing commercial infrastructure and delivering operating leverage with a limited SG&A increase. ALKS faces a 10% royalty to Jazz Pharmaceuticals on non-narcolepsy LUMRYZ sales post-March 2028, but the opportunity remains financially meaningful. I value ALKS at $57/share (35x 2027E EBITDA), supported by LUMRYZ expansion, EBITDA growth, and strategic sleep medicine franchise development.