Full Press Release Details
Months after roaring onto the oncology stage behind the immunotherapy drug nemvaleukin alfa,Alkermesisexploring the potential spin-outof its cancer business into an independent, publicly traded company.
The separation would create two new companies. One would focus on neuroscience, where Alkermes has made a name for itself as an established commercial enterprise behind its schizophrenia and bipolar depression drug Lybalvi. The oncology company would center on nemvaleukin, which is moving into mid- and late-stage studies in solid tumors.
During a conference call with investors, Chief Executive Officer Richard Pops said the separation would allow for a strategic focus on each core area of interest. Each entity would be guided by separate and distinct management teams who have relevant therapeutic expertise in their fields, Pops noted.
“We believe that operating separately will increase each business with the flexibility to pursue growth and investment strategies that more align with their respected focus,” he said.
Following the separation, Alkermes is expected to become a pure-play commercial-stage neuroscience business that can focus on unmet needs within that space, Pops outlined.
In addition to Lybalvi, drivers for the neuroscience business include schizophrenia treatment Aristada and Vivitrol, an opioid addiction treatment.
On the developmental side, ALKS-2680, an orexin 2 receptor agonist, is expected to enter Phase I proof of concept studies in narcolepsy next year.
The Oncology Business
At the American Society of Clinical Oncology meeting, Alkermespresented data from the ARTISTRY-1 studythat highlighted the impact of nemvaleukin in multiple solid tumors.
The drug demonstrated anti-tumor activity with durable responses as a stand-alone treatment for patients with mucosal melanoma and renal cell carcinoma whose disease has progressed following treatment with a checkpoint inhibitor.
With nemvaleukin now in two potential registrational studies, Pops said separating the businesses will position the experimental oncology drug for success.
Not only does nemvaleukin have promise in mucosal melanoma and RCC, Alkermes believes it can play a role in other solid tumors, which will establish it as a foundational asset, Pops said. That success is also expected to spur the advancement of Alkermes’ preclinical pipeline of engineered cytokines.
Influence of the Inflation Reduction Act
Beyond capital investments, Pops pointed to therecently passed Inflation Reduction Actas a catalyst for the potential separation.
The act requires drug manufacturers to pay a rebate to the federal government if prices for single-source drugs and biologics covered under Medicare increase faster than the rate of inflation. It has placed greater importance on biologics as a potential treatment for disease, Pops noted.
In the past, drug makers themselves were indifferent to the approach being with a small molecule or biologic. The legislation made biologics more valuable, but to realize that value, it is important for companies to adapt their developmental approach in order to accommodate the finite window of exclusivity imposed by the legislation, he said.
The oncology business would likely be located within the company’s existing Waltham, Mass. campus. If the separation does come to pass, it is not expected to be completed until the second half of 2023. Prior to a full separation, Alkermes would announce the new name of the business entity, as well as its leadership team and financial details.
In preparation, Alkermes will continue to carefully manage the cost structure of each business, Pops said.
Beyond the announced separation, Chief Financial Officer Iain Brown said the company delivered solid financial performance in the third quarter with total revenue of $252.4 million driven by Alkermes’ commercial portfolio.