Results

After getting beat up on its depression drug pitch, a battered Alkermes pivots to schizophrenia with a positive PhIII readout — but skeptics are ready to pounce

Badly needing a new focus after regulators and experts slapped around their pitch for the depression drug ALKS-5461, Alkermes $ALKS is changing the topic today to schizophrenia.

Craig Hopkinson

Thursday morning the biotech outfit laid claim to promising data from ALKS-3831, their new and improved combo of olanzapine/samidorphan, flagging a hit on both co-primary endpoints related to weight gain and a key secondary they’re hoping will help sell the drug — with a marketing application now on schedule for the FDA. But the skeptics who have been sizing up Alkermes’ ambitions wonder if this drug can do well commercially, which may explain why their stock slipped slightly in the red in premarket trading.

The efficacy endpoints in this second Phase III study focused on a lower mean percent weight gain for schizophrenia patients taking ‘3831 as well as a comparison with olanzapine on the number of patients who added 10% or more of their body weight going into the study.

In the olanzapine group 29.8% of patients gained 10% or more of body weight in 6 months compared to 17.8% for ALKS 3831; for the 7%-plus weight gain category it was 42.7% for olanzapine vs. 27.5% for ALKS 3831.

Richard Pops, Alkermes

The p values Alkermes presented were all upbeat and significant, though the company plans to hold back many of the details for a conference. And it’s clear from a review of analysts’ comments in recent weeks that the details will be important in assessing whether or not Alkermes has a drug that can fetch a branded price in a field dominated by cheap generics.

They’re not holding back a new drug application, though. That is slated for a delivery date sometime at the mid-point of next year.

“Importantly, ALKS 3831 favorably shifted the weight gain distribution curve compared to olanzapine, both in terms of mean weight gain and patients experiencing extreme weight gain,” said Craig Hopkinson, Alkermes’ CMO. 

The touting of this study will likely be intense as Alkermes execs led by CEO Richard Pops look to turn investors’ attention away from the train wreck that ALKS-5461 has become. But it won’t be easy.

Leerink’s Marc Goodman initiated coverage a few days ago, concluding that ‘5461 was dead in the water after a large majority of FDA experts turned thumbs down on it in a recent review, which followed a scathing assessment of the data and trial plan by FDA insiders. ‘3831 may get approved, he added, but selling a drug like this will be no easy matter.

(W)e believe that expectations are too high for ALKS-3831. MEDACorp physicians (and we) like this product, but we believe reimbursement will be difficult for a new brand without a novel mechanism in a highly generic market; (3) we don’t agree with the bullish stance by some investors that the base business can justify the current valuation for the whole company and thus the pipeline is viewed as a free wildcard.

Stifel’s Paul Matteis had this to say recently:

We think the Street is modeling around a 40-50% probability-of-success for 4Q18 data (we’re at 50%); “success” in itself is subjective though, as there’s a continuum of outcomes here with respect to a statistical win vs. a commercially-relevant signal.

This Phase III is the money shot for Alkermes. The research group already produced positive Phase III data underscoring that their antipsychotic drug performed better than a placebo while proving statistically about the same as generic olanzapine alone. Weight gain is a routine side effect for their drug, but they’re looking to replace a standard therapy with one that can guard a greater percentage of patients from putting on pounds during treatment.


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Biotech Investment Analyst
SV Health Investors Boston, MA
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Recursion Pharmaceuticals Salt Lake City, UT
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