Shares of Alkermes Plc (NASDAQ:ALKS) fell nearly 20 percent in early Monday trading after the FDA stunned the company with a Refusal to File letter regarding its New Drug Application (NDA) for ALKS 5461, a once-daily, oral investigational medicine with a novel mechanism of action for the adjunctive treatment of major depressive disorder (MDD) in patients with an inadequate response to standard antidepressant therapies.
Upon its preliminary review, the FDA has taken the position that it is unable to complete a substantive review of the regulatory package, based on insufficient evidence of overall effectiveness for the proposed indication, and that additional well-controlled clinical trials are needed prior to the resubmission of the NDA for ALKS 5461. In addition, FDA has requested the conduct of a bioavailability study to generate additional bridging data between ALKS 5461 and the reference listed drug, buprenorphine.
Alkermes strongly disagrees with the FDA’s conclusions and plans to appeal the FDA’s decision. The company intends to seek immediate guidance, including requesting a Type A meeting with the FDA, to determine appropriate next steps and what additional information may be required to resubmit the NDA.
“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,” said Richard Pops, Chief Executive Officer of Alkermes. “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.”
Alkermes is evaluating the impact of this update on its previously-issued financial guidance for 2018; any update will be provided in its first quarter 2018 financial results disclosures.
Most of Wall Street echoes a neutral point of view, with TipRanks analytics exhibiting ALKS as a Hold. Based on 5 analysts polled in the last 3 months, 1 rates ALKS stock a Buy, while 4 maintain a Hold. The 12-month average price target stands at $62.80, marking a nearly 35% upside from where the stock is currently trading.