Alkermes Shares Collapse as FDA Refuses to Review its MLajor Depressive Disorder Drug

Shares of biotech stock Alkermes were falling into the red on Monday after the Food and Drug Administration said it would not review the company’s depression drug.

Shares of the stock dropped over 20% and hit its lowest level in 18 months on the news.

The FDA has said that the biotech company still needs to run more clinical studies on its ALKS 5461 drug to treat major depressive disorder.

Officials refused to file the application for the drug “based on insufficient evidence of overall effectiveness for the proposed indication,” said the company.

CEO Richard Pops wrote, “We are extremely disappointed with this decision and the implications for patients in the U.S. suffering from serious disease where there is a clear and urgent need for new treatment options for patients and their families.”

According to Evercore analyst Umer Raffat, the company’s “press release notes additional clinical trials are needed prior to resubmission (along with an additional bioavailability study).” He wrote in a note to
clients, “This is critical and is clearly below expectations.”

The company is planning on appealing the decision made by the FDA.

Disclaimer: We have no position in Alkermes plc (NASDAQ: ALKS) and have not been compensated for this article.