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) 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) 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.
The excitement around Tecfidera makes an improved and more convenient version of the drug a valuable commodity, if it can be developed successfully. Alkermes has a lot to prove with its MMF prodrug. Biogen is not the company's only competition or worry, either. Xenoport ( XNPT) is also developing an MMF prodrug for multiple sclerosis, with phase I data expected later this summer. The other two drugs introduced by Alkermes Wednesday: A novel painkiller, ALKS 7106, designed from the ground up to have a low potential for abuse and overdose. A phase I study will start in mid-2014. A cancer drug, RDB 1419, based on IL-2 and designed to expand the number of tumor-killing cells involved in the immunotherapeutic effects on cancer. Alkermes also announced plans to conduct a phase II study of ALKS 3831, a new oral antipsychotic for the treatment of schizophrenia which combines olanzapine (brand name: Zyprexa) with a novel opioid modulator ALKS 33. ALKS 381 is designed to match Zyprexa's efficacy without causing weight gain, a common problem for schizophrenia patients on current medications. The phase II study will compare ALKS 3831 head-to-head against Zyprexa. -- Reported by Adam Feuerstein in Boston. Follow @AdamFeuerstein