Alkermes ALKS announced that the FDA has granted an orphan drug designation (ODD) to its novel, investigational and oral orexin 2 receptor agonist, alixorexton (formerly ALKS 2680), for the treatment of idiopathic hypersomnia (IH).
Simultaneously, the European Commission granted ODD to alixorexton for the treatment of patients with narcolepsy.
Granted by the FDA, ODD is a special status to promote new drugs or indications for existing drugs to treat, prevent or diagnose rare diseases affecting a small percentage of the population. In the United States, the ODD offers various incentives, including tax credits for clinical study costs and waivers of certain FDA application fees and seven years of market exclusivity upon potential approval.
In the European Union, orphan designation provides regulatory and commercial benefits, including protocol assistance, lower regulatory fees, and up to 10 years of market exclusivity upon approval.
ALKS’ Price Performance
Year to date, shares of Alkermes have rallied 58.5% against the industry’s decline of 0.7%.
Image Source: Zacks Investment Research
ALKS’ Recent Updates With Alixorexton Development
Alkermes is developing alixorexton for the treatment of narcolepsy type 1 (NT1) and narcolepsy type 2 (NT2) and IH.
In January 2026, the FDA granted Breakthrough Therapy Designation to alixorexton for the treatment of patients with NT1.
NT1 is a chronic sleep disorder causing excessive daytime sleepiness and sudden muscle weakness called cataplexy due to orexin deficiency.
The company recently initiated the phase III Brilliance studies, evaluating the safety and efficacy of alixorexton versus placebo in adults with NT1 and NT2.
NT2 is a neurological sleep disorder causing excessive daytime sleepiness and sudden sleep attacks.
The program consists of three 12-week, placebo-controlled phase III studies evaluating once-daily and split-dose regimens of alixorexton.
Meanwhile, the phase II Vibrance-3 study continues to evaluate alixorexton for treating adults with IH.
Management believes that, if successfully developed, alixorexton has the potential to address a significant unmet need in the treatment of NT1 and NT2 as well as IH.
ALKS’ Zacks Rank & Stocks to Consider
Alkermes currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Kiniksa Pharmaceuticals KNSA, Liquidia Corporation LQDA and Immunocore IMCR, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Kiniksa Pharmaceuticals’ 2026 EPS have increased from $1.09 to $1.24. Over the same period, EPS estimates for 2027 have risen from $1.54 to $1.70. KNSA shares have increased 26.9% year to date.
Kiniksa Pharmaceuticals’ earnings beat estimates in two of the trailing four quarters and missed in the remaining two quarters, with the average surprise being 1.53%.
Over the past 60 days, estimates for Liquidia’s 2026 EPS have increased to $2.97 from $1.50. Over the same period, EPS estimates for 2027 have risen to $4.81 from $2.91. LQDA shares have surged 108.2% year to date.
Liquidia’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 54.40%.
Over the past 60 days, estimates for Immunocore’s 2026 bottom line have improved from a loss of 88 cents per share to earnings of 6 cents. Over the same period, EPS estimates for 2027 have risen from 24 cents to 87 cents. IMCR shares have lost 17.5% year to date.
Immunocore’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 46.66%.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alkermes plc (ALKS): Free Stock Analysis Report
Liquidia Corporation (LQDA): Free Stock Analysis Report
Kiniksa Pharmaceuticals International, plc (KNSA): Free Stock Analysis Report
Immunocore Holdings PLC Sponsored ADR (IMCR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).