After two successive Phase 3 trials that failed, Alkermes Plc (NASDAQ:ALKS) finally got validation for its ALKS 5461 drug for treating major depressive disorder (MDD).
The stock shot up 27.83% to end Friday at $55.62, with 18.48 million shares changing hands, after the company announced positive topline data from the third Phase 3 trial for ALKS 5461.
Alkermes is a global pharmaceutical company that focuses on central nervous system (CNS) disorders, such as schizophrenia, depression, addiction and multiple sclerosis.
ALKS 5461 is a once-daily, orally administered formulation of samidorphan and buprenorphine, designed to rebalance brain function that is dysregulated in the state of depression.
Alkermes Plc (NASDAQ:ALKS) upbeat; to meet with the FDA
“We designed ALKS 5461 to have a novel mechanism of action for the treatment of MDD, a serious disease where new therapeutic options are highly sought after as millions of patients in the U.S. do not respond to standard courses of antidepressant therapy,” said Elliot Ehrich, M.D., Chief Medical Officer of Alkermes. “With the successful completion of the FORWARD-5 study and data from more than 1,500 patients to date, we have established a strong foundation of evidence of ALKS 5461’s clinical utility in the adjunctive treatment of major depressive disorder.
“With these data now in hand, we will move forward rapidly to meet with the FDA to determine the appropriate next steps toward a regulatory submission for ALKS 5461, with a goal of bringing this important new medication to patients with MDD,” he added.
Why Alkermes Plc (NASDAQ:ALKS) was laid low in January
Investors may recall the crushing decline in the stock in January after the company reported that the FORWARD-3 and FORWARD-4 Phase 3 clinical trials of ALKS 5461 failed to beat placebo.
After having touched a high of $80.71 in December 2015, the stock plummeted to a low of $29.67 by end-January after the failure was announced.
Even after Friday’s sharp gain, those losses are yet to be completely erased by the stock. However, the stock has closed above $54, which was an earlier support line that could have played spoilsport by now acting as a resistance.
That, and the fact that stock has closed above the 200-day moving average on Friday by a huge margin, may induce further bullishness in ALKS.
JP Morgan analysts too are more optimistic, upgrading the stock from Neutral to Overweight and boosting the PT from $51 to $78.
“Third time the charm,” said Paul Matteis, an analyst at Leerink Partners, who has a Buy rating on ALKS.