Setback for Alkermes’ Pipeline

On Wednesday, Alkermes, Inc. (ALKS - Analyst Report) disclosed that it has received notification from Johnson & Johnson’s (JNJ - Analyst Report) Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica International stating that Janssen does not intend to continue with the development of the four-week long-acting injectable formulation of risperidone. A phase I study with the four-week formulation had been initiated in January 2009.

Risperidone, which is marketed as Risperdal Consta, is Alkermes’ lead product. Risperdal Consta is the longer-lasting injectable version of Johnson & Johnson's schizophrenia drug Risperdal (risperidone).

Risperdal Consta uses Alkermes' proprietary Medisorb technology to deliver and maintain therapeutic medication levels in the body through just one injection every two weeks. The product is approved in more than 85 countries worldwide and is available in 60 countries.

Risperdal Consta is superior to the first-generation Risperdal in terms of efficacy, tolerability and frequency of dosage (one injection every two weeks). Given its improved profile, Risperdal Consta is a major player in the schizophrenia market. Worldwide sales of Risperdal Consta came in at $348 million in the first quarter of fiscal 2010.

Risperdal Consta is the current growth driver of Alkermes’ top-line, and the company was looking to drive growth further through the development and approval of the once-monthly formulation. As such, J&J’s decision to discontinue development of the once-monthly injection is a major disappointment for Alkermes.

Although the schizophrenia market is huge, it is also highly competitive, with players like AstraZeneca (AZN - Analyst Report), Eli Lilly (LLY - Analyst Report), Bristol-Myers Squibb (BMY - Analyst Report) and Pfizer (PFE - Analyst Report) fighting for market share.