Investing.com -- Bank of America downgraded four U.S. biopharmaceutical companies, lowering ratings on Alkermes, Amphastar Pharmaceuticals and Biohaven to Underperform, while cutting Liquidia to Neutral, citing a combination of stretched valuations, uncertain near-term catalysts and a rebalancing of its ratings across the sector.

The brokerage said the changes reflect differing risk-reward profiles rather than a broad shift in its outlook for the industry. Three companies were downgraded due to valuation and catalyst concerns, while Liquidia's rating was reduced despite improving fundamentals because of uncertainty surrounding an upcoming patent litigation outcome.

For Alkermes, BofA downgraded the stock from Neutral to Underperform after a 92% year-to-date rally, arguing that its valuation has become less attractive. The bank warned that upcoming clinical data in idiopathic hypersomnia, increasing competition in the orexin drug class, and the expected loss of exclusivity for Vivitrol in early 2027 could weigh on the shares.

Amphastar was also cut to Underperform, with BofA lowering its price objective to $20 from $25. The brokerage said the company's transition from a generic drug maker to a proprietary brands and biosimilars business is likely to take time, while near-term growth catalysts remain limited and its legacy generic business faces constrained revenue opportunities.

Biohaven was downgraded to Underperform with its price target reduced to $11 from $12. BofA said it sees an unfavorable risk-reward profile ahead of Phase 3 epilepsy data for its Kv7 program, expecting results that may not differentiate the drug from competing therapies. The brokerage also highlighted concerns over the company's cash runway and viewed its other 2026 obesity-related catalyst as offering limited de-risking potential.

Liquidia was lowered to Neutral despite BofA raising its price target to $79 from $64 after increasing its peak sales forecast for Yutrepia to $2.2 billion. The bank praised the drug's commercial launch but said the stock's 125% year-to-date gain and uncertainty surrounding a pending patent dispute with United Therapeutics create a more balanced upside-downside profile.