- The Food and Drug Administration has handed Alkermes another setback, citing manufacturing issues in refusing to approve the company's new schizophrenia medicine.
- Alkermes emphasized the agency raised no issues with data in the company's application for the drug, known as ALKS 3831, and hasn't requested any new studies. The FDA singled out tablet coating problems with specific development batches of the drug that have since been resolved, the company said.
- Data are available to address the FDA concerns, and the company is preparing a submission for regulators, Alkermes said. Chief Medical Officer Craig Hopkinson added the company sees "a clear path to resolution," and Wall Street analysts appeared confident in the drug's eventual approval prospects.
The FDA's negative decision is not only an unwelcome surprise for Alkermes. It may portend problems for other drugmakers seeking approvals of new products at a time when the FDA has scaled back manufacturing inspections because of the coronavirus epidemic.
Any "slight issues" in manufacturing might generate a rejection instead of an approval, with the FDA failing to ask for clarification during a remote review process, Evercore ISI analyst Umer Raffat wrote in a note to investors.
In the case of Alkermes, regulators conducted a remote review of records, confirmed receipt of information they requested from the company on Sept. 11 and then didn't provide any further feedback until the review deadline prompted a complete response letter, Alkermes said.
At issue is some development batches of ALKS 3831 tablets that showed erosion at a manufacturing site in Wilmington, Ohio, Cantor Fitzgerald analyst Brandon Folkes wrote in a note to investors. After identifying the issue, the company manufactured new batches that showed no problems.
Analysts said they still expect the medicine to win approval, because the manufacturing issues appear resolvable and the FDA didn't seek more clinical data. After hearing from company officials, analysts said the drug may even still be on track for launch in the first quarter of 2021.
Still, there is now "additional uncertainty" for investors, Folkes wrote.
Alkermes is still reeling from a 2019 rejection of a once-promising depression treatment. The company's shares, which had zoomed past $67 in 2018, dived as prospects for the drug dimmed. Alkermes stock traded at $17.77 early on Tuesday.
ALKS-3831 is one of the drugs that could help jumpstart a turnaround for Alkermes, if it's approved and gains traction commercially. The company is seeking approval of ALKS 3831 to treat both schizophrenia and bipolar I disorder. It combines an existing antipsychotic treatment, Zyprexa, with a medicine called samidorphan that's designed to mitigate the weight gain often associated with Zyprexa.
An FDA advisory panel in October voted in favor of approval, and the agency generally follows the advice of its experts.