Alkermes investors should be very happy with vote Print E-mail
By Patrick Crutcher   
Thursday, 16 September 2010 23:12

Investors in Alkermes (NASDAQ:ALKS) certainly have something to cheer about after Thursday’s advisory panel. The FDA Psychopharmacologic Drugs Advisory Committee voted 12 to 1 that VIVITROL® should be approved for the treatment of opioid dependence.

This was an overwhelmingly positive panel. Panel members stressed the need for treatment options in patients addicted to opioid painkillers. They also felt that VIVITROL® (naltrexone for extended-release injectable suspension) was safe and effective. You can review the briefing documents here:

“The Advisory Committee meeting outcome today underscores the strength of the clinical data for VIVITROL® and the need for new treatment options,” said Richard Pops, Chief Executive Officer of Alkermes. “We believe that, if approved, VIVITROL® would offer a new path to recovery as the first non-addictive, once-monthly medication for patients with opioid dependence.”

There are roughly 6-6.5M or so shares currently short. Shorts will have to cover in the coming weeks or face the possibility of 2 FDA approvals for ALKS. I’m smelling a short squeeze. With the kind of institutional backing ALKS has, shorts better cover now before the big funds start putting heavy pressure on them.

As we said last time, approval in this indication would certainly expand the market potential and give ALKS more incentive in promoting Vivitrol. Lazard analyst Terence Flynn projects a $300 million market opportunity for Vivitrol in opioid dependence. Sales of Vivitrol in alcohol dependence have been slow to say the least, with sales totaled $20.2 million in the fiscal year ended March 31, 2010.  

Remember 2 important dates for ALKS: PDUFA date for Vivitrol for opioid dependence is October 12, 2010 and PDUFA date for Bydureon is October 22, 2010. Both of these events will serve as major catalysts for ALKS.

Good luck out there and remember, this is a follow-up article.

We alerted our subscribers about ALKS here:

ALKS has a strong balance sheet ( $90M in cash and $400M+ in assets) for which they could live-off of for several years and a good revenue stream, but are still fighting to be cash-flow positive. They had quarterly revenues of $42.3 million, driven by strong manufacturing and royalty revenues from RISPERDAL® CONSTA®.  Remember, they still have a developing pipeline with several Phase 2 and Phase 1 drugs in addiction, mental health, diabetes, pain, and rheumatoid arthritis. They have already already pushed 2 drugs through the FDA, Vivitrol and RISPERDAL® CONSTA®. This company has serious growth potential with approval of either of these drugs.

Disclosure: No positions.

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