When Alkermes acquired Elan's drug technology business in Athlone in a $960 million buyout two years ago, everyone knew what it was after – or at least they thought they did. Both were strong players in drug-delivery technologies and in contract drug manufacture, and the Elan purchase was going to give it improved scale in those areas. An Irish domicile was an attractive added bonus.
In fact, what Alkermes did was deliver what looks now to be one of the most potent pipelines in biopharmaceuticals – building on its traditional strengths in schizophrenia while also moving into new areas, such as cancer, through its first proprietary protein drug.
Clinical testing
Alongside five drugs on the market, Alkermes has six strong pipeline candidates – three at a reasonably advanced stage and three starting to work their way through the clinical testing process. "We knew when we came together with EDT we had the makings of a really great company," says Alkermes chief executive Richard Pops. "But the glimmer in our eye was this proprietary science that was beginning to bubble up within Alkermes. The EDT merger turned a loss-making business into a profitable one and gave it the financial muscle to develop its in-house drugs.
“Fast forward two years [and] with the resources to fund the pipeline, the science, to give it time for the experiments to play out, for the data to be developed and, lo and behold, the pipeline reveals itself to be quite valuable,” he says. “In fact, this may be one of the most important pipelines in central nervous systems diseases in all of pharma right now.”
The "overnight" success has been built on the company's strengths – its expertise in the central nervous system therapies and in opioids – and on its practice of taking strong therapies and addressing side effects which may be holding them back from delivering on their full potential.
Pipeline drugs
The company has also built a name for delivering strong clinical trial data – one way or the other – on its pipeline drugs. Results earlier this year on ALKS 5461 – a treatment for depression that looks to build on the long-established efficacy of opiates in treating the condition while addressing the addiction issue that had seen the use of such drugs abandoned – were so strong in therapy-resistant patients that it engendered great excitement.
“It is exactly illustrative of what the EDT deal did. It gave us the scale and resources to ask the critical questions earlier in the development programme.”
Young biotech companies living hand-to-mouth are sometimes constrained to run small studies which deliver just sufficient results to keep going, Pops notes, “whereas, for us, because the pipeline is so rich, we want to know which ones not to keep going as early as possible. That often requires running well-powered, larger clinical trials early to really discern the clinical effect that you are looking for.”
Most biotech business “live” in a zone where the risk is very high because they are often developing entirely new molecules for new medical targets, such as Elan did in its failed long-term bid to develop a therapy for Alzheimer’s.
A key strength for Alkermes, Pops argues, is that it builds more generally on known biology to develop something significantly better for patients than what is already available.
“What we like about this quadrant is how single experiments can change the risk profile,” says Pops. He points to the results early this year for ALKS 5461.
“Despite the fact that it was built on precedented biology, there was quite an unknown question whether or not we could decouple the mood effects from the addictive properties.
“But in one well-powered study, we dropped the risk significantly and increased the value of the programme.”
And if it hadn’t worked? “If it didn’t hit the criteria, we could stop, because otherwise you are back in the high-risk domain.”
Alkermes’s focus on chronic disease and large populations is very counterculture. Biotech has made a name for itself pursuing smaller, niche areas with orphan drugs and, given its success, pipeline-poor Big Pharma has been following it down this same path.
“We are interested in depression, addiction, schizophrenia and pain, the big ones. Why? Because these are where governments are spending all the money,” says Pops unashamedly. “And so, if we can make a significant contribution in those fields, we are in a minority of companies willing to go in this direction and we think we have the right recipes to do so.”
While pricing drugs may be easier in the biotech space because they are often treating previously intractable conditions, Pops and his team believe there is plenty of room for improvement in the chronic conditions. But the new drugs offered need to be fundamentally better than what is already available.
“Many payers, especially in Europe, if you develop a new diabetes drug, [they] will compare its price to existing generics, so the onus [on companies like Alkermes] is to make a significant contribution. Your drug has to look different and do things for patients that have not been done before, or you won’t get paid.”
At the heart of much of its recent success is a new molecule, ALKS 33, which blocks the opiate receptors in the brain – “the off switch for the opioid system” – and has allowed Alkermes to address side effects in some “great, but not perfect” drugs for the treatment of schizophrenia, depression, bipolar disorder and pain.
Blockbuster breakthrough
Alkermes is still a long way from being a Biogen, or a Gilead Sciences, but Pops says: "We do not need them all to work . . . one blockbuster drug can drive huge market valuations and growth of the company. So our job is to find the best of these candidates and to provide the financial resources to move the best ones forward as fast as we can."
As Ireland’s traditional biopharmaceutical powerhouse Elan adapts to life inside Perrigo following its takeover, Alkermes has assumed the mantle of Ireland’s leading innovative drug developer. It has some way to go to deliver fully but, with its lower risk profile, Pops is confident of its ability to make it all the way.
