Alkermes was surprised by regulatory rejection of its new antidepressant.

The Food and Drug Administration has told Alkermes plc (ALKS - Get Report) antidepressant drug ALKS 5461 isn't ready, and the company is a little down.

Its stock also is suffering.

Alkermes shares closed March 29 at $57.96, but they opened Monday, April 2, at $46.75 on news of the regulator rejecting the Dublin-based company's data from numerous trials. The stock was down 21.5% to $45.50 in afternoon trading.

In a Securities and Exchange Commission filing on Monday, the company revealed the FDA had handed it a Refusal to File letter tied to the ALKS 5461 New Drug Application. The NDA is for a once-daily oral medication for the treatment of major depressive disorder in patients with an inadequate response to standard antidepressant therapies. The drug is a fixed-dose combination of buprenorphine, a partial mu-opioid receptor agonist and kappa-opioid receptor antagonist, and samidorphan, a mu-opioid receptor antagonist.

The FDA told Alkermes that the trial information submitted presented insufficient evidence that ALKS 5461 was effective. The regulator directed Alkermes to pursue a new set of trials before it resubmitted the NDA. It also requested the company do a bioavailability study to "generate bridging data between 5461 and the reference drug, buprenorphine."

Alkermes conducted a trio of Phase 3 trials, but two of those trials missed their primary endpoints. The company contended the results of the third trial carried enough positive data regarding the efficacy of 5461 to push the drug across the finish line.

There has been much talk about the FDA under new Commissioner Scott Gottlieb moving more quickly for drug approvals to ramp up market competition and drive drug prices lower. The regulator's rejection of consideration of 5461, though, sends a signal to biotechs and pharma companies that the agency's oversight is far from a rubber stamp.

Alkermes isn't taking the setback quietly. CEO Richard Pops in a statement said: "We are extremely disappointed with this decision and the implications for patients in the U.S. suffering from major depressive disorder, a serious disease where there is a clear and urgent need for new treatment options for patients and their families. We strongly believe that the clinical development program, including data from more than 1,500 patients with MDD, provides substantial evidence of ALKS 5461's consistent antidepressant activity and a favorable benefit-risk profile."

In an investor call with analysts on Monday, the company said it had extensive communication with the FDA over the NDA and that the regulator's reservations regarding the data was "surprising and troubling." Alkermes received the letter Friday, and while the company was still digesting the news, it is clear that the communication from the FDA to Alkermes produced more questions than answers.

Alkermes plans to appeal the FDA decision, seeking immediate guidance and requesting a "Type A" meeting with the regulator to find out what additional information is needed to file a revised NDA. A Type A meeting is regarded as a high-priority meeting and generally takes place within 30 days of a request.

The company also said it plans to evaluate how the setback might impact its previously announced financial guidance for 2018. Alkermes was banking on success for 5461, with the company increasing its sales force by 70% to back the new drug's rollout.

Major depressive disorder affects an estimated 16.2 million people in the U.S. that may not adequately respond to initial treatments, according to data the company quoted.

Major drugs already on the market include Pfizer Inc.'s (PFE - Get Report) Zoloft; Prozac and Cymbalta from Eli Lilly and Co. (LLY - Get Report) ; Valeant Pharmaceuticals International Inc.'s (VRX) Wellbutrin; and Abilify from Bristol-Myers Squibb Co. (BMY - Get Report) .

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