Alkermes' (ALKS) work on developing applications for orexin agonists outside of sleep indications can reposition the firm as a leader in the space, RBC Capital Markets said in a Monday note.

As orexin in sleep become ever more crowded, the report said interest in other applications build. RBC analysts project a 50/50 split across the base business and future pipeline.

"While there may be potential in at least 5 major disorders, we see the strongest support for ADHD and addiction," they said.

Alkermes is studying orexin applications for ADHD and fatigue, with initial ADHD data expected in Q4, according to the note.

"We think near-term data catalysts for these programs can help investors reframe ALKS as a leader in the space," the note said.

RBC raised its price target to $56 from $45 while maintaining its outperform rating.

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