Alkermes Stock Climbs on Positive Trial for Depression Drug

4/17/13Follow @xconomy

Investors weren’t expecting Alkermes to do anything big this year to help people deal with major bouts with depression. But today the Dublin, Ireland and Waltham, MA-based company showed it just may be onto something important for this form of mental illness. Shares of the company climbed more than 15 percent on Alkermes’ latest clinical trial results.

Alkermes (NASDAQ: ALKS) said today that its new once-daily pill for major depressive disorder was able to “significantly” reduce symptoms in a placebo-controlled mid-stage study of 142 patients. The drug, ALKS 5461, reached its main goal of showing improvement on the Hamilton Depression Rating Scale, while also succeeding on two secondary clinical measurements of depression.

While all the findings were statistically significant—meaning it’s unlikely the Alkermes’ drug succeeded because of chance—the company didn’t disclose the magnitude of the benefit patients experienced compared with a placebo. Detailed results from the trial are being kept under wraps until Alkermes can show them to physicians at the New Clinical Drug Evaluation Unit meeting in Hollywood, FL from May 28-31.

You can bet that session will be well attended, because any safe and effective new drug for depression is bound to find lots of eager patients. Estimates of prevalence vary, but a nationwide face-to-face survey of people in 2005 found that 6.7 percent of people in the U.S. suffered a major depressive episode in the preceding 12 months, according to data published in the Archives of General Psychiatry and cited by the Centers for Disease Control and Prevention. If that rate of depression is consistent today, given the rate of population growth, then as many as 20 million people in the U.S. may have had a major depressive episode in the last 12 months.

“The improvements in depressive symptoms observed in patients treated with ALKS 5461 in this study were clinically meaningful and among the most robust I have seen in a phase 2 study for depression in the past two decades. This promising candidate could provide a valuable new treatment approach for this serious and chronic disease,” said Maurizio Fava, Director of the Depression Clinical and Research Program at Massachusetts General Hospital, in an Alkermes statement.

Cory Kasimov, an analyst with JP Morgan who recommends Alkermes stock, said expectations for this study were low, given the history of failed treatments for depression, and limited clinical data for the Alkermes compound.

“This is a potentially very important positive development for Alkermes as ALKS 5461 is an oral, [once-a-day] drug which has a novel mechanism of action for treating [major depressive disorder], which represents a very large market opportunity,” Kasimov wrote.

The study enrolled patients who didn’t respond well enough to previous treatment with selective serotonin reuptake inhibitors (SSRIs) or a serotonin-norepinephrine reuptake inhibitor (SNRIs). Patients took a low or high dose of the Alkermes drug, once a day, for four weeks. The drug was considered “generally well-tolerated” but Alkermes didn’t disclose details on its side-effect profile.

Based on the results, Alkermes said it plans to take the drug into the third and final phase of clinical trials normally required for FDA approval of a new medicine.

Shares of Alkermes climbed 17 percent to $29.98 at 1:25 pm Eastern time.

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