Alkermes Reveals Higher-Than-Expected Royalty on Diabetes Drug

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of $13 currently reflects how much cash it has in the bank, the value of its stake in Johnson & Johnson’s risperidone (Risperdal Consta) for schizophrenia, and some anticipated future revenue for the longer-lasting diabetes drug, Pops says.

Here’s a preview of some of the other things Pops plans to talk about with investors today.

—Back in February, Alkermes unveiled it has developed a new chemical method for making drugs last longer in the bloodstream that’s supposed to be cheaper and easier than the technique being used for the once-weekly diabetes drug. This new method, called LinkeRx, is being applied to a longer-lasting version of Bristol-Myers Squibb’s aripiprazole, a $2 billion-a-year antipsychotic marketed as Abilify. But that’s not the only antipsychotic Alkermes thinks it can improve upon.

Today, Alkermes is announcing it is working on a once-monthly injectable version of one of the world’s biggest-selling psychiatric drugs, Eli Lilly’s olanzapine (Zyprexa). Alkermes’ philosophy with long-lasting antipsychotic drugs is that they avoid the peaks and valleys in the drug’s blood concentration that can lead to side effects on the high end, and insufficient treatment on the low end. Plus, a long-lasting injectable helps ensure mentally ill patients can stay on their meds, because they don’t need to remember to take them every day.

Lilly has developed its own FDA-approved longer-lasting version of olanzapine (Zyprexa Relprew) as well, although it creates hassles because patients need to be monitored for several hours after they get a dose, to make sure they aren’t among the 1 percent who suffer from a dangerous side effect called somnolence. Patients with that side effect become heavily sedated, which can be really bad if it happens while you’re driving home.

Alkermes believes that its longer-lasting version, ALKS 7921, has been engineered to avoid high concentrations that can lead to somnolence, Pops says. The drug candidate is being timed to enter the clinic in 2011.

If Pop’s optimism turns out to be justified in clinical trials, then Alkermes could have a serious rival to a drug that generated $4.9 billion in worldwide sales in 2009. “Zyprexa is a mainstay therapy in the psychiatric community,” Pops says.

—While Alkermes anticipates most of its cash flow via deals in which it improves upon drugs from other companies, it also aspires to develop its own oral pills.

One of those is ALKS 37, a drug being developed for the constipation that many people get in the hospital when they take opioid-based narcotic pain relievers, like morphine. Alkermes is now planning a study of 60 patients, in which it will randomly assign them to get a placebo or the new drug. That trial should produce preliminary results before the end of March 2011, Pops says.

There is competition in this space. San Carlos, CA-based Nektar Therapeutics (NASDAQ: NKTR) received a $125 million upfront payment from AstraZeneca last year for a drug to treat opioid-induced constipation. Tarrytown, NY-based Progenics Pharmaceuticals (NASDAQ: PGNX) has a product for this as well. Both are injectables, while the Alkermes drug is an oral pill.

“We think a drug in this class needs to be an oral,” Pops says.

—Lastly, Alkermes will roll out its clinical plan for ALKS 33. This product has been tested to help people kick alcoholism, like another Alkermes product that has never generated much in the way of sales, naltrexone (Vivitrol). Pops acknowledges that nobody cares much to hear about drugs to help treat alcoholism.

But ALKS 33 is really a “Trojan horse,” which Alkermes is studying in a broad range of reward disorders and impulse control problems, of which alcoholism is just one component. Alkermes has studied it in alcoholism first because it has experience in the field and relationships with physicians, but it is now ready to branch into studies for binge eating, and in a combination trial with buprenorphine for addiction and mood disorders.

Data from an ongoing mid-stage study of ALKS 33 for alcohol dependence should be ready by the end of 2010, while the binge-eating study should generate results by the end of June 2011, Pops says. (By the way, Pops will be a featured speaker at Xconomy’s XSITE 2010 conference at Babson College on June 17.)

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