UPDATED: Alkermes slammed as top depression drug fails two PhIIIs

Alkermes CEO Richard Pops

Alkermes ($ALKS) reported this morning that its closely watched depression drug ALKS-5461 failed to hit the primary endpoints in the first two of three Phase III studies, slamming the company and the troubled field of depression drug research with a serious setback.

As is often the case with antidepression drug studies, Alkermes cited a higher placebo response as the chief obstacle to success. But Alkermes CEO Richard Pops had been enthusiastic about the drug's chances at the recent JP Morgan conference, calling the Phase III readout a "seismic" event for the company and citing an unusual trial design in which nonresponders in the initial placebo arm were rerandomized between the placebo and drug arms.

Investors tended to agree on the significance of the study, triggering a 44% plunge in the company's share price and wiping out $4 billion in market cap by the end of the day.

Biopharma companies typically set up Phase III depression programs with three studies, hoping to score a success in two out of three in order to convince regulators. But even after flunking on the first two, Alkermes isn't giving up. The company cited a trend toward statistical significance and says that a post hoc analysis ascertained that the entire 2mg/2mg dose group in one study--FORWARD-4--achieved the critical endpoint on the Montgomery–Åsberg Depression Rating Scale (MADRS) scores.

Post hoc analyses aren't uncommon in drug development, but the conclusions are often questionable for analysts and regulators. Alkermes has now scrambled to adjust its remaining Phase III study, adding new patients and rejigging its statistical analysis plan. If FORWARD-5 delivers clear evidence of success, says the Dublin-based biotech, they'll take the combined data with FORWARD-4 to the FDA to see if it can pass muster with regulators.

ALKS-5461 is a combination of samidorphan and buprenorphine. Paul Matteis, an analyst at Leerink, believes that the drug's fate now will depend heavily on the data coming from FORWARD-5.

The trial "needs to be a clear success for '5461 to have a realistic shot at FDA approval," Matteis wrote this morning. "While FDA has historically been flexible in "depression," we believe the failure of two of the three largest '5461 studies, combined with the fact that ALKS is employing a novel trial design, will on balance create an uphill battle for the company. ALKS is now changing the statistical analysis plan for FORWARD5 and believes this will be OK with the agency, but has not provided granular details on the study changes (or the original stats plan). This renders it challenging to risk-adjust '5461 going forward, leading us to remove the product from our model entirely."

Depression studies have been plagued by repeated failures in recent years, adding to the significance of Alkermes' work in the field. Currently used drugs are problematic at best, with patients frequently forced to sample a variety before finding something that works. If this drug goes down like many before it, the failure is likely to discourage others from jumping in until more is known about the biology behind a condition that afflicts millions of people the world over.

"We are steadfast in our commitment to developing new medicines for serious CNS conditions where there is a clear and compelling need for new treatment options for patients and their families," said Alkermes CEO Richard Pops in a statement. "Major depressive disorder is one of these conditions. We are building a large body of evidence supporting our belief in the clinical utility and the novel mechanism of action of ALKS 5461. We await the results of FORWARD-5 and will determine our next steps along the regulatory path with those results in hand."

- here's the release