Alkermes Will Seek U.S. Approval for Once-Monthly Schizophrenia Treatment
(ALKS - Get Report) will seek U.S. regulatory approval in the third quarter for a once-monthly injectable schizophrenia drug based on positive late-stage study results announced Tuesday.
If approved next year, Alkermes' aripiprazole lauroxil will compete against several other long-acting antipsychotics, including a similar once-monthly injectable aripiprazole approved last year and sold by Otsuka and Lundbeck. But the schizophrenia treatment market (oral and injectable drugs) is big and growing -- more than $11 billion in the U.S. last year and $20 billion-plus worldwide. Oral versions of aripiprazole, sold under the brand name Abilify, generated $6.5 billion in sales last year.
Alkermes is best known for its drug delivery technologies licensed to other companies in exchange for royalty payments. The company views aripiprazole lauroxil as a "blockbuster opportunity" so will sell the drug with its own salesforce. It's fair to say the positive results announced Tuesday are a watershed moment for Alkermes and its long-stated strategy to grow profits by selling its own drugs. Helping Alkermes along is the favorable tax structure which comes from being headquartered in Ireland.
In the phase III study, schizophrenia patients treated for 12 weeks with two different doses of aripiprazole lauroxil demonstrated statistically significant reductions from baseline in a behavioral response scores known as Positive and Negative Syndrome Scale (PANSS) compared to placebo. Data from this study will form the basis for an approval filing with the FDA. Alkermes will need to conduct a separate study comparing aripiprazole lauroxil to another currently approved schizophrenia drug in order to seek European approval.
Investors generally expected positive results from the aripiprazole lauroxil phase III study. Alkermes shares were up 8% to $44.57 in pre-market trading.
J.P. Morgan analyst Cory Kasimov forecasts aripiprazole lauroxil peak sales of roughly $1 billion worldwide. Current worldwide sales of long-acting injectable drugs for schizophrenia total about $4 billion.
Abilify Maintena, approved in February 2013 and sold by Otsuka and Lundbeck, has already captured about 6.5% market share in the U.S., says Kasimov, which bodes well for Alkermes' commercial opportunity because aripiprazole lauroxil will be sold with a more convenient pre-filled syringe and multiple doses.
Alkermes earns royalty payments based on sales of currently approved long-acting antipsychotics sold by Johnson & Johnson (JNJ - Get Report).