Pipeline Progress at Alkermes/JNJ - Analyst Blog

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Alkermes ( ALKS ) recently announced that its partner, Johnson & Johnson 's ( JNJ ) Janssen Research and Development unit has initiated a phase III program (n~1,800) to evaluate a three-month injectable version of their schizophrenia drug Invega Sustenna.

The program, which consists of two studies, will evaluate the safety, efficacy and tolerability of the new version of the drug. While the first study (n~500) will evaluate the safety, efficacy and tolerability of the three-month version of Invega Sustenna versus placebo, the second study (n~1,300) will compare the new version with the monthly injectable version of Invega Sustenna. Both studies are expected to be completed by the second half of calendar 2014.

We note that the once-a-month formulation of Invega Sustenna is available in the US since 2009. The drug is marketed in the EU under the trade name Xeplion. Invega Sustenna/Xeplion treats the symptoms of schizophrenia such as depression, blunted emotions and social withdrawal and reduces their chances of coming back.

We believe that the successful development and subsequent commercialization of the new version of the drug would boost its sales potential. Moreover, the market for schizophrenia, a chronic disorder of the brain, offers significant commercial potential. The mental disorder is estimated to affect approximately 2.4 million people in the US alone according to the National Institutes of Health. Across the globe, it is estimated that schizophrenia affects one in every 100 individuals.

Invega Sustenna/Xeplion is marketed globally by Johnson & Johnson. Alkermes gets royalties from Johnson & Johnson on global sales of the drug which is manufactured with the aid of the former's proprietary technology for nanoparticles.

Our Recommendation

Currently, we have a Neutral stance on Alkermes in the long run. The company carries a Zacks #3 Rank ("Hold" rating) in the short run. Our stance is similar on Johnson & Johnson.

ALKERMES INC (ALKS): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
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This article appears in: Investing , Business , Stocks
Referenced Symbols: ALKS , JNJ

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