Zacks_Analysts' Blog : Pipeline Progresses at Alkermes - Analyst Blog

Recently, Alkermes plc (ALKS) announced that it has commenced a phase 2b study (n~80) of its candidate ALKS 37 in patients suffering from opioid induced constipation (OIC). The multi-center, randomized, double-blind, placebo-controlled, fixed dose study will evaluate the safety, efficacy and tolerability of the 100 mg dosage of the candidate to be administered daily versus placebo.

Alkermes expects data from this 12-week study as well as the dose-ranging, 4-week mid-stage trial (n~150) of ALKS 37 in the same indication (initiated in July 2011 ) in the End-of-phase II submission package to the US  Food and Drug Administration (FDA). Results from both studies are expected in mid-2012.

We note that ALKS 37 has been faring well in clinical studies for the OIC indication. In February 2011 Alkermes presented encouraging data from a phase II study of ALKS 37 for OIC. Results revealed that treatment with ALKS 37 reduced constipation arising out of the intake of opioid pain therapies without compromising on the efficacy of the drugs.

The multi-center, randomized, double-blind, placebo-controlled study evaluated the safety, efficacy and tolerability of the candidate in patients suffering from opioid-induced bowel dysfunction (OBD) while undergoing opioid treatment for chronic, non-cancer pain. The patients were treated with either ALKS 37 (once daily) or placebo for 14 days.

However, we believe that investor focus will be on the US approval of type II diabetes treatment Bydureon - already cleared in the EU. A decision from the FDA regarding the drug, co-developed by Alkermes with Eli Lilly and Company (LLY) and Amylin Pharmaceuticals, Inc. (AMLN) is expected by January 28, 2012. US approval of Bydureon would be a major boost for Alkermes. 

Our Recommendation

We have an Outperform recommendation on Alkermes in the long-run. We believe that the current price represents an attractive entry point for long-term investors. The stock carries a Zacks #3 Rank (Hold) in the short-run.