Alkermes CEO Leans on Internal Pipeline as Bydureon Hangs Out in the Penalty Box
When biotech firms get bad news from the FDA, the fallout can have a dramatic impact on everyone from the CEO to the bench scientists. But Waltham, MA-based biotech firm Alkermes (NASDAQ:ALKS) was able to escape a disappointing regulatory ruling last month without any impact on its day-to-day operations, Richard Pops, the company’s chairman and CEO, says.
Perhaps it’s a testament to the 23-year old biotech company’s strength. Last month, the FDA turned down a request for approval of a once-weekly version of the diabetes drug exenatide (Bydureon), which has been co-developed by San Diego-based Amylin Pharmaceuticals (NASDAQ:AMLN), drug giant Eli Lilly (NYSE:LLY), and Alkermes. Though Alkermes’s stock price has dropped by more than 20 percent since the news, the company’s operations have remained the same and it hasn’t made any dreaded layoffs.
“The energy level around the company is so high,” Pops says. “It’s so interesting because when you’ve seen the Bydureon actions at the FDA, if you came to Alkermes, you’d realize that operationally nothing has changed.”
It often takes genuine optimism and stamina to overcome lumps in the biotech game. Pops certainly has both traits. He took over as CEO last September after taking a two-year break from the job, which he previously held from 1991 to 2007. Even more, however, the company has steady revenue from two marketed products, primarily from the long-acting schizophrenia drug risperidone (Risperdal Consta), which is marketed by its partner Johnson & Johnson (NYSE:JNJ). Its second product is its naltrexone formulation (Vivitrol) to treat patients trying to kick alcohol and opioid dependence.
Indeed, the Bydureon news was a setback for Alkermes’s bottom line. The drug was expected to be a new and important source of product revenue for the company in the years ahead. That potential income stream will be delayed by more than a year as Amylin expects to reply to the agency’s request for more data on the treatment by the end of 2011. Though the drug relies on Alkermes’s drug-delivery technology, the company has no day-to-day responsibility for producing the drug or working with regulators to get it approved, Pops says.
This is important because it allows Alkermes to focus its internal research and development, while letting Amylin and Lilly do the heavy … Next Page »