Alkermes: Progress In Antipsychotics

Alkermes (ALKS) announced overwhelming and surprising positive votes from the joint meeting of the Psychopharmacologic Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee/

The FDA committees met to discuss ALKS 3831 (olanzapine/samidorphan), a novel, once-daily, oral atypical antipsychotic drug candidate for the treatment of adults with both schizophrenia and with bipolar I disorder.

The committees jointly voted that samidorphan meaningfully mitigates olanzapine-associated weight gain (16 yes, 1 no) and that the safety profile of ALKS 3831 has been adequately characterized (13 yes, 3 no, 1 abstention).

In addition, the committees jointly voted that labeling is sufficient to mitigate the risks related to the opioid antagonist action of samidorphan (11 yes, 6 no). The joint advisory committee’s recommendations, while not binding, will be considered by the FDA in its review of the ALKS 3831 NDA.

We expect the FDA to approve ‘3831 by the Nov. 15, 2020 PDUFA date based on these positive votes from the AdCom. This is an important win for ALKS as the company needed a boost to its pipeline of drugs.

Expectations were quite low based on the overall clinical trials results that delivered somewhat mixed signals in the past and while statistically significant, the absolute difference in weight loss was small.

In addition, olanzepine is generic and other players also exists in the schiz/bi-polar field. But over time, the weight loss will gain even more traction become a new branded drug as samidorphan is an entirely new compound.

ALKS 3831 has the potential to generate solid sales based on its ability to alleviate serious mental illness while safety mitigating weight gain that is common in antipsychotics.

The panel’s outcome is great news for ALKS and we expect full approval on or before November 15. We continue to rate the stock a "buy" under $35 a share.

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