BOSTON ( TheStreet) -- In our current biotech investment mania, preclinical drug candidates are worth about $1 billion each (See: Epizyme (EPZM), Bluebird (BLUE) and soon Agios (AGIO)) so Alkermes' (ALKS - Get Report) market value should rise by $3 billion more today after introducing investors to three new drugs still in the lab and not tested on actual patients yet.
Jokes aside, investors have been rewarding companies for beefier pipelines, even if the new drug candidates are in the very earliest stages of development. On Wednesday, Alkermes doubled the size of its pipeline and promised to undertake early clinical studies within the next year to determine quickly whether or not these new drugs had the potential to become big winners for the company and shareholders.
Alkermes CEO Richard Pops, as you might expect, struck a very optimistic tone about his bolstered pipeline during a presentation in downtown Boston."We're addressing big markets, big drug opportunities with modern science," said Pops, reminding investors once again that the days of Alkermes being known only for cashing royalty checks on its drug delivery technologies are over. Alkermes shares closed Wednesday trading up 5% to $31.07. The most intriguing of the new drugs announced Wednesday was an enhanced and novel prodrug of monomethyl fumarate (MMF), the active ingredient inside Biogen Idec's (BIIB - Get Report) multiple sclerosis pill Tecfidera. Alkermes showed preclinical data Wednesday suggesting its MMF prodrugs (the company has two candidates in development) could be dosed once per day (Tecfidera is taken twice a day) and cause fewer gastrointestinal side effects. The company expects to seek permission from FDA to begin human testing of its MMF prodrugs for multiple sclerosis in 2014, with a phase I study slated to begin mid-year. Composition of matter patents have been filed, which if granted, would give the drugs long patent protection, Alkermes said. By all accounts, the Biogen commercial launch of Tecfidera has exceeded expectations, with analysts expecting second quarter sales (the first full quarter of sales) of $70 million and 2013 sales to exceed $400 million. Tecfidera could become a blockbuster i.e. exceed $1 billion in annual sales in 2014.