The pharmaceutical industry is in the list of leaders, among which you will find the energy and oil, financial, real estate, and other industries that attract the investor’s attention. Most of the traders are focusing on big names, such as Valeant (VRX), Allergan (AGN), or Pfizer (PFE), but what about Alkermes Plc (ALKS)?

In this article, I will speak about a great opportunity to open long positions on Alkermes – a small drug manufacturer that produces a number of drugs, one of which is Vivitrol. 

Vivitrol is a trade name for Naltrexone. It is a drug that is used in the management of alcohol dependence. It also helps the patients with drug addiction, as it reverses the effects of opioids.

The investment opportunity with alcohol addiction treatment

Alcohol and drug addiction are a major problem in the US. According to Per Wickstrom of “Best Drug Rehabilitation” company, 30% or 40% of his friends or relatives dealt with some kind of addiction.

“I looked at my friends and my relatives, and I found out, you know 30 to 40% of the people I knew were on some kind of a substance to get by in life” – said Per in an interview.

The list of drugs against alcohol addictions goes wider, but Naltrexone remains one of the main substances which gained the confidence of many people. Naltrexone is a substance that has been created to block the receptors responsible for the emergence of alcohol euphoria. Alkermes produces this drug under the name of Vivitrol. According to their website, Vivitrol can:

• Treat alcohol dependence.
• Prevent relapse to opioid dependence after opioid detox. The patient must stop taking opioids or other opioid-containing medications before starting VIVITROL.

So, it is a drug that has a bright future, because more and more people in the US start to realize how important it is to get some help in fighting with addiction. This is a real opportunity for an investment idea, as Alkermes should be a great choice for those who want to engage in position trading in the prospect of short-term investing.

About ALKS

Before getting to the figures and charts, let’s see some basic info about Alkermes Plc. According to the Alkermes official website:

“Alkermes is a leader in innovative medicines that address the unmet needs and challenges of people living with debilitating diseases. As a fully integrated global biopharmaceutical company, Alkermes develops products that are designed to make a meaningful difference in the way patients manage their disease. The company is focused on central nervous system (CNS) disorders, such as schizophrenia, depression, addiction and multiple sclerosis.”

The market capitalization of Alkermes is $6.8 billion, and the company shares are traded on Nasdaq stock exchange.

Technical Analysis

Here is the chart showing Alkermes share price evolution on a D1 timeframe:

As you can see, from the January collapse that hit most of the pharmaceutical companies because of unclear reasons, the ALKS price finds in a modest upward trend. However, this is not the ideal moment for opening a long position. On the D1 chart, most of the Technical Analysis indicators, such as Moving Averages (with periods 5, 10, and 20), ADX, and CCI, point to sell signal. On the other hand, Stochastic and MACD oscillators point to buy signal. The slow MAs (with periods 50 and 100) also point to buy signal, which shows that the general uptrend is still maintained.

When to enter the market?

You should watch the news related to the alcohol and drug rehab industry, and also keep an eye on ALKS share price. If the price continues a general uptrend for more than 5 days, it is a good opportunity to open a long position. It can repeat the third wave pattern as you can watch in the chart.

Is there anything else that supports Alkermes?

Yes, Alkermes announced that it should start a phase one study on its immuno-oncology candidate ALKS 4230. The study will evaluate the tolerability, safety and immunological-pharmacodynamic effects of this substance for the treatment of patients with solid tumors. If the study will be successful, there will be more reasons to invest in ALKS shares.

Also, in March, there was published a study in the New England Journal of Medicine (NEJM) which demonstrated the utility of extended-release naltrexone or VIVITROL in individuals involved in the criminal justice system.