Market Overview

Alkermes Falls 20% After FDA Refusal To File Letter

Alkermes Falls 20% After FDA Refusal To File Letter

Shares of Alkermes Plc (NASDAQ: ALKS) lost more than 20 percent early Monday morning after the U.S. Food and Drug Administration said it won't review the company's therapy ALKS-5461.

What Happened

Alkermes, which mostly focuses on treatments for central nervous system diseases, said in a press release it received a Refusal to File letter from the FDA regarding its New Drug Application (NDA) for ALKS-5461.

ALKS-5461 is a once daily-oral investigational medicine for the adjunctive treatment of major depressive disorder (MDD) in patients with an inadequate response to standard antidepressant therapies. The FDA is unable to complete a review of the therapy's regulatory package due to "insufficient evidence of overall effectiveness for the proposed indication, and that additional well-controlled clinical trials are needed."

The FDA also requested that Alkermes oversee a biovailability study to generate additional bridging data between ALKS 5461 and the reference listed drug, buprenorphine.

Why It's Important

The FDA's action represents a "blow" to Alkermes and its investors who hoped the approval of ALKS-5461 would boost the company's revenue growth, Stat News' Adam Feuerstein wrote. The refusal also represents a "black mark" for the company's CEO Richard Pops, who has been telling investors for months that the clinical data available was compelling enough to secure a regulatory approval.

What's Next

Alkermes said it "strongly disagrees" with the FDA's conclusions and will appeal the decision. The company's management hopes to gain further information in a Type A meeting with the FDA to determine what the next appropriate step will be and what additional information is required to resubmit the NDA.

At time of publication, the stock was trading down 18.8 percent at $47.

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