Shares of Alkermes PLC surged 10% on Wednesday following the announcement of a settlement in patent litigation with Teva Pharmaceuticals USA Inc. The litigation involved Vivitrol, a treatment for alcohol and opioid dependence. Alkermes, a biopharmaceutical company based in Dublin, revealed that the settlement agreement, subject to regulatory review, grants Teva a license to market a generic version of Vivitrol in the U.S. commencing early 2027.
The resolution of this legal dispute has been well received by investors, as it eliminates a significant concern and uncertainty surrounding Alkermes’ stock. Mizuho Securities analyst Uy Ear remarked in a recent note that the settlement “lifts a key overhang” on the company’s shares. Furthermore, the agreement provides Alkermes with a favorable scenario for hitting profitability targets in 2024 and 2025.
Alkermes shares have already risen by 14.5% since the beginning of this year, while the broader market, represented by the S&P 500, has gained 17.4%. On the other hand, Teva’s American depositary receipts remained relatively unchanged during Wednesday morning trading and have increased by 6.8% year-to-date.
This settlement enables Alkermes to move forward with confidence and positions the company for long-term success in its efforts to provide effective treatments for alcohol and opioid dependence.