Positive Trial Data Lifts Alkermes - Analyst Blog

Shares of Alkermes ALKS gained significantly following positive top-line data from a pivotal phase III study (n=623) on its once a month injectable schizophrenia candidate aripiprazole lauroxil. Shares of the company were up by as much as 10.6% on the news during early trading on Apr 8, 2014. However, most of the gains were eaten away during the course of the day and each share of Alkermes gained 2.38% at the end of the trading session to close at $42.08.

The study was designed to evaluate the efficacy, safety and tolerability of aripiprazole lauroxil in patients who experience acute exacerbation of schizophrenia. Data from the multicenter study revealed statistically significant reduction in patients' total scores compared to placebo on the Positive and Negative Syndrome Scale (PANSS) following 12 weeks of treatment with aripiprazole lauroxil across both doses - 441 mg and 882 mg, thus meeting the primary objective of the study. PANSS, a psychiatric scale, measures the symptom severity in schizophrenia.

Furthermore, treatment with aripiprazole lauroxil also resulted in improvement from baseline in the Clinical Global Impression – Improvement Scale at week 12. The candidate was found to be well tolerated in the placebo controlled and double blind study. Detailed results will be presented by Alkermes at an upcoming medical conference. Alkermes stated in its press release that all patients who participated in the study were eligible to continue aripiprazole lauroxil therapy for 12 months to asses the safety and long-term durability of the treatment.

Aripiprazole lauroxil, a atypical antipsychotic, is converted into aripiprazole following its entrance into the patient's body. We note that aripiprazole is marketed by Bristol-Myers Squibb Company BMY/ Otsuka under the trade name Abilify.

Encouraged by the positive phase III data, Alkermes intends to seek U.S. approval of the schizophrenia candidate in the third quarter of 2014. A decision from the U.S. Food and Drug Administration (FDA) is expected in the third quarter of 2015. The company intends to develop its own sales force to market the treatment on approval. Approval would boost Alkermes' top line since the schizophrenia market offers significant commercial potential.

The company intends to meet regulatory authorities in the EU with the phase III data to determine the way forward for the candidate there. Alkermes is also evaluating aripiprazole lauroxil so that it can be dosed once every two months.

Alkermes already has a presence in the evolving atypical antipsychotic market for schizophrenia which is worth $4.5 billion in the U.S. Alkermes receives royalties from Johnson & Johnson JNJ on atypical antipsychotic medications, Risperdal Consta and Invega Sustenna.

Alkermes carries a Zacks Rank #1 (Strong Buy). Amgen AMGN too carries the same rank as Alkermes.