Alkermes PLC (ALKS) lost nearly $4 billion of market value yesterday. The results of two late-stage studies of a depression treatment drug were a disappointment.
To help treat patients with a major depressive disorder, the company has been developing ALKS 5461, a once-daily medication. The drug was supposed to help patients who do not respond well to standard depression treatments.
Comparing the drug against a placebo, the first two of three Phase III studies, Forward-4 and Forward-3, were not as successful as hoped. Yet, the company did see some positive results in one of the dose levels of the Forward-4 trial.
“Based on these analyses, Alkermes believes that Forward-4 provides supportive evidence of the efficacy of ALKS 5461 in the treatment of major depressive disorder,” the company said.
The patients involved in the study had major depressive disorder and current treatment was not working. ALKS 5461 is designed to be added to their current prescribed anti-depression medicine.
Shares of Alkermes plummeted after the news broke of the failed depression drug trials. As reported by the Wall Street Journal, the stock price dropped 42 percent to $34.76 in afternoon trading yesterday.
Industry watchers correctly anticipated the results of the trial would have a powerful influence on the stock price. The drug was hyped as a potential game-changer for major depressive patients.
Once the Alkermes depression drug makes it to market, it is expected to boost the company’s revenue and ultimately lead to profitability by 2018. Analysts are predicting a possible takeover of the Dublin-based biopharmaceutical company if the depression drug trial is eventually successful.
In a depression drug trial, Alkermes said patients often have a strong response to the placebo and that was evident during the Forward-3 trial.
“Clinical trials of new medicines for the treatment of major depressive disorder are complicated by significant placebo response,” Chief Medical Officer Elliot Ehrich said.
Patients who suffer from major depressive disorders experience symptoms for at least two weeks. The condition, which affects approximately 17 million people in the U.S., impairs their ability to function normally. Many of these patients do not respond well to traditional antidepressant therapy.
Alkermes, which currently makes drugs to treat schizophrenia, drug addiction, and alcohol dependence, was founded in 1987. The company went public in 1991, then subsequently merged with Dublin, Ireland, drug maker Elan Drug Technologies. The $960 million “inversion” deal moved Alkermes’ corporate office overseas to a country with lower corporate taxes than the U.S.
In a related Inquisitr report, drug maker Pfizer plans to move its headquarters to Ireland to save money on taxes as well.
Although some research and manufacturing is done in Ireland, the company kept much of its research and development in Waltham, Massachusetts. It also has another manufacturing plant in Wilmington, Ohio. About 1,500 people work for Alkermes worldwide.
Alkermes isn’t ready to give up and is continuing to test the depression drug by moving into a third Phase III study, Forward-5. They are taking on more patients and the statistical analysis of the previous two studies will be adjusted.
Alkermes CEO Richard Pops believes in the company’s dedication to helping patients suffering from the depressive disorder.
“We are steadfast in our commitment to developing new medicines for serious CNS conditions where there is a clear and compelling need for new treatment options for patients and their families. Major depressive disorder is one of these conditions. We are building a large body of evidence supporting our belief in the clinical utility and the novel mechanism of action of ALKS 5461. We await the results of Forward-5 and will determine our next steps along the regulatory path with those results in hand.”
Later this quarter, the company will announce the results. The stock price will continue to wobble as investors are likely to be skeptical until the company can show some positive progress.
The drug maker is also testing ALKS 3831, a schizophrenia treatment, and ALKS 3800 for multiple sclerosis. After the new depression drug trials are successful, Alkermes plans to request approval from the U.S. Food and Drug administration for ALKS 5461.
[Photo by Christopher Furlong/Getty Images]