Good News for Alkermes' Pipeline - Analyst Blog

Alkermes Inc.'s (ALKS) pipeline received a boost with its candidate ALKS 33 faring well in a mid-stage study (n=400) in alcohol dependent patients. The candidate is being developed for treating patients suffering from reward disorders and other central nervous system (CNS) problems.  The study evaluated the safety and efficacy of the candidate, administered orally on a daily basis, at three dosages compared to placebo. Alkermes intends to present complete results from the study at an upcoming medical conference.

Preliminary results from the 12-week multi-center, double-blind study revealed that ALKS 33 well tolerated at all 3 dose levels. A significant decline in heavy drinking days in a dose dependent manner was observed across all dose levels compared to placebo. The greatest reduction in heavy drinking days (41%) compared to placebo was witnessed in patients treated with the highest dose of the candidate.

However, the difference in complete abstinence from heavy drinking across the treatment groups failed to meet statistical significance. Alkermes intends to set up a meeting with the US Food and Drug Administration (FDA) to discuss the results of the mid-stage study and the potential endpoints for a late-stage study.

We note that ALKS 33 is also being evaluated for other indications such as binge-eating disorder and as a combination therapy for treating cocaine addiction and other disorders. In October 2010, Alkermes presented encouraging data from an early-stage study of the combination therapy of ALKS 33 and buprenorphine combination for treating patients suffering from cocaine addiction.

Our Take

Apart from ALKS 33, the other interesting candidates at Alkermes include ALKS-6931 for treating rheumatoid arthritis, ALKS-7921 and ALKS-9070  for treating schizophrenia, ALKS-37 for opioid-induced constipation, and ALKS-36 (a co-formulation of an opioid analgesic and ALKS- 37) for the treatment of pain without the side-effects of constipation. Alkermes also expects to present key data on some of its other pipeline candidates in the near future. The successful development and commercialization of the pipeline candidates should boost the company's top line.

In addition to the robust pipeline, Alkermes has two marketed products in its portfolio. The current growth driver at Alkermes is Risperdal Consta indicated for the treatment of schizophrenia and bipolar disorder. The drug is marketed worldwide by Johnson & Johnson (JNJ). The other approved product at Alkermes is Vivitrol for the treatment of alcohol dependence. The label of the product was expanded in October 2010 when the FDA approved the drug for an additional indication - the prevention of relapse to opioid dependence after opioid detoxification. We believe that the successful label expansion of the drug will bring in additional revenues at Alkermes.

However, Alkermes suffered a major setback this year with the FDA issuing a second complete response letter for diabetes candidate Bydureon. The setback caused Alkermes to trim its revenue projections and increase the net loss forecast for fiscal 2011.

Currently we have a long-term ‘Neutral' stance on Alkermes which is supported by the Zacks #3 Rank (short-term ‘Hold' rating) carried by the company.

 
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