Alkermes Plc [ALKS] Set For More Gains Ahead of Nov 15th FDA Decision

Alkermes Plc [NASDAQ: ALKS] stock rose significantly on Monday after the company’s bipolar and schizophrenia treatment got a positive review in the wake of the U.S. Food and Drug Administration (FDA) decision. FDA will use the committee’s review to decide on Alkermes’ application of its new drug by November 15, 2020.

On Friday, Alkermes, the Ireland-based company reported that it had received favorable votes from a joint meeting of the Drugs Safety and Risk Management Advisory Committee and the psychopharmacologic Drugs Advisory Committee. The panel comprising of the two agencies was appointed by the FDA to review the drug ALKS 3831. The company intends to use this drug candidate to treat adults with bipolar 1 disorder and schizophrenia.

This drug is a combination of olanzapine and samidorphan. The panel voted 16-1 in favor of samidorphan, and that it can prevent the weight gain associated with alanzapine. It further voted 13-3 in favor of ALKS3831 for its safety. On the issue of risks related to the opioid action of samidorphan, the committee voted 11-6 that it can mitigate these risks.

Alkermes Stock Price Gets a Boost

There were some specialists among the panel that voted against the drug. According to Kevin Huang, a CFRA Research analyst, the six no votes could indicate “some financial risk” especially to the investor, but the overall committee’s action was positive news for the company. Huang further noted that the AdCom’s favorable vote is not a guarantee that ALKS will get FDA approval, but it gives it a boost nonetheless. He also had a hold rating on the company’s stock, only increasing his target from 19 to 20.

Another analyst, Marc Goodman, of SVB Leerink, said in his note to clients that they have not heard anything that has changed their view on ALKS-3831 that warrants FDA approval. The opioid issue he said raises quite some issues that might limit the drug’s commercial success despite its FDA approval. He projects that the drug’s peak annual sales would be about $300 million.

Dr. Vamil Divan, a Mizuho Securities Analyst said in a recent report that briefing documents released before committees’ actions could “encourage product’s potential approval.” He considers the ALKS stock neutral.

On Monday, this stock soared with as much as 13,3% going above 20, but ended the session at 17.53 representing a 4% increase. The stock has been trading below its 50 and 200-day lines in the last two months, only elevating on Monday. It, however, remains below the top third tier with a rating of just 66.

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