AMLN Amylin Pharmaceuticals, Inc. (MM)

Recently, Alkermes Inc. (ALKS) presented encouraging top line data from an early stage study of its schizophrenia candidate ALKS 9070 (n=32).  ALKS 9070 is a once-monthly injectable extended release version of Bristol-Myer Squibb’s (BMY) schizophrenia drug Abilify (aripiprazole).  Alkermes intends to present complete data from the study at an upcoming medical conference.

The double-blind, randomized, placebo-controlled 20-week study evaluated the safety, tolerability and pharmacokinetics of ALKS 9070 (once-monthly) at 3 doses in patients suffering from chronic, stable schizophrenia.

Data from the study revealed that the candidate was generally well tolerated at all  doses and achieved therapeutically relevant plasma concentrations of Abilify. The pharmacokinetic profile backed the once-monthly dosing of ALKS 9070. Encouraged by the positive results, the company intends to commence a pivotal development program for the candidate by the end of the present calendar year.

Even though the positive results for ALKS 9070 is a boost to Alkermes’ pipeline we believe that investor focus will remain on the fate of diabetes drug, Bydureon, in the US and its launch in the European Union. Alkermes has co-developed Bydureon with Amylin Pharmaceuticals (AMLN), Eli Lilly and Company (LLY).

Another event which is expected to be in focus is the impending purchase of Elan Corporation’s (ELN) drug delivery unit, Elan Drug Technologies, by Alkermes. The merger is expected to close in the third quarter of calendar 2011. The deal is expected to boost Alkermes’ cash earnings immediately following its closure. The product portfolio at Alkermes will be strengthened following the merger. The merged entity is expected to possess a diversified product portfolio (with 25 marketed products) and a robust pipeline.

Our Recommendation

Currently we have a ‘Neutral’ long-term recommendation for Alkermes. The company carries a Zacks #3 Rank (‘Hold’ rating) in the short run.

 

 
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