FDA Panel Rejection Of Alkermes Depression Drug Is Good News For Allergan

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About: Allergan plc (AGN), Includes: ALKS, JNJ
by: TradeCircle

Summary

Last week's FDA panel rejection of Alkermes depression drug ALKS-5461 all but invalidates the direct opioid approach to treating MDD, or treatment-resistant depression (TRD).

Johnson & Johnson and Allergan are developing TRD treatments primarily based on a different receptor, NMDA, or glutamate.

JNJ's candidate esketamine has similar safety issues to ALKS-5461 and could be rejected for the same reasons.

Allergan's Rapastinel is a separate case since the MOA is slightly different, with a better chance of approval.

If Rapastinel is approved, it would have free reign initially on the TRD space. Phase III data due early 2019.

Editor's Note [11/11/2018]: This article has been revised since original publication, as the author has made changes to the content.

Allergan (NYSE:AGN) had some good news last week, though not directly related to it, in the form of an FDA panel rejection vote for Alkermes (ALKS) depression drug candidate ALKS-5461.

In a clear and decisive vote last Thursday afternoon, the Psychopharmacologic Drugs Advisory Committee (PDAC) of the FDA roundly rejected ALKS-5461. The vote was not even close at 21 against and 2 in favor. The vote comes after the depression drug had already failed two Phase III trials in missing primary endpoints, but succeeding in a third Phase III trial on which the new drug application was based. The FDA itself hasn't voted whether to approve or reject the NDA yet, but with the vote recommendation of its panel so clearly against, the chances of approval for ALKS-5461 are very slim.

The decision will reverberate across the Major Depressive Disorder (NYSEARCA:MDD) space, as it all but rules out further development of the direct opioid-based approach to treating MDD, or in this case, TRD, meaning treatment-resistant depression. Therefore, companies approaching the space differently, while perhaps their chances of approval have not increased per se because of this rejection, the market relevance of their drugs is now much higher because the Alkermes opioid approach has been all but invalidated, at least for now.

The most relevant companies that could benefit from this rejections are Johnson & Johnson (JNJ) and Allergan, both of which are developing MDD treatments based on a different mechanism of action that has nothing to do with opioid receptors. Johnson & Johnson is working on esketamine, and Allergan is developing Rapastinel for the same indications that ALKS-5461 was focused on. For reasons I will go into below, I believe the news is better for Allergan.

First, why is the direct opioid approach to treating TRD all but invalidated? Because judging by the documents released by the PDAC committee, it will be very difficult for any company to invest hundreds of millions of dollars in a direct opiate-based approach so heavily criticized by panel members.

ALKS-5461 combines the opiate buprenorphine with samidorphan. Buprenorphine is a partial agonist of the μ-opioid receptor (MOR) associated with addiction and dependency and also an agonist of the k-opioid receptor (KOR), less associated with addiction. Samidorphan is an antagonist of the MOR and agonist of the KOR. When combined, the activity on the MOR - the addiction-associated receptor - is supposed to be cancelled out while both molecules activate the KOR. This is supposed to aid with depression without the addictive qualities of opiates.

In the FDA Panel's Words

Nice in theory, but here are several key passages (linked above) from the FDA briefing document of problems with this approach that would be very difficult for any other company approaching MDD through the opioid pathway to contend with:

It is unknown whether chronic exposure to BUP/SAM will contribute to an increased risk of opiate dependence, misuse, and abuse, particularly in patients with a previous history of opioid use disorder. There is a potential concern that buprenorphine can easily be chemically separated from samidorphan by individuals wishing to misuse or abuse the buprenorphine component. Mental illness, including MDD, is associated with non-medical use of prescription opioids and opioid use disorder. Studies suggest that more than 50% of patients with depression have comorbid pain conditions. Individuals with MDD who fail to improve with treatment have a higher baseline risk of substance use disorder and polypharmacy. The likelihood that BUP/SAM could be co-administered with other controlled substances such as benzodiazepines is also concerning. The majority of MDD treated in the U.S. is treated by primary care clinicians specializing in family and internal medicine. It is important for prescribers to understand that BUP/SAM is an opioid.

There are many layers of problems here. First, there is no data on the prolonged use of the combination. Second, the combination could be separated by addicts and abused. Third, those with MDD tend to be predisposed to opiate abuse in the first place anyway and are often taking opiates due to additional pain problems. They are also usually taking other drugs that may interact negatively with BUP/SAM. Finally, family doctors and internists may not understand that the drug is an opiate itself.

But the problems go even further:

Since samidorphan is a full µ-opiate receptor antagonist … there may be a potential impact of BUP/SAM on patients who require opioid analgesics due to the antagonist effects of buprenorphine and samidorphan combined, especially in emergency situations where patients need analgesia. It is unknown whether patients treated with BUP/SAM will require higher doses to achieve analgesia

In other words, if a patient needs opiates as an emergency painkiller, it is unknown how chronic usage of the BUP/SAM combination would affect tolerance, or it may counteract the needed effect of painkillers entirely. That would be a serious problem in an emergency situation. Finally:

Regarding safety, buprenorphine is an opioid. Although the Applicant has made several arguments that the other component of their drug, samidorphan, negates the µ-opioid properties of buprenorphine, this has not been conclusively proven…there remains some evidence of a mild opiate effect (including mild withdrawal effects) from the trials.

Had ALKS-5461 passed all Phase III trials with flying colors, then perhaps these safety concerns would have been overridden by the obvious positive efficacy data. But it failed two of three Phase III trials. These concerns will be very difficult for any company attempting the opioid-based approach to depression to overcome.

Allergan and Johnson & Johnson

Here's where JNJ and Allergan come in. Both Johnson & Johnson and Allergan are developing TRD drugs based on ketamine, which targets the NMDA receptor, not an opioid receptor. It must be said, however, that it was recently discovered in August that NMDA receptor drugs do function secondarily through opiate receptors as well, though scientists are still not completely sure how they are involved. That said, the drugs that JNJ and Allergan are developing are not specifically targeted to opiate receptors, even though it appears that they do play a role in their mechanism of action.

I believe Allergan has a better chance of approval of its drug Rapastinel than Johnson & Johnson has for its own esketamine. The two drugs are both based on the NMDA receptor, but esketamine blocks it entirely and Rapastinel only modulates it. Blocking the NMDA receptor is what ketamine itself does, and ketamine is an anesthetic, highly addictive, and used as an emergency antidepressant in patients at imminent risk of suicide. But it cannot be used long term. The issue is not as serious with esketamine, but it has the same mechanism as ketamine proper, so there will be that concern.

JNJ has already submitted an NDA for esketamine even though it also missed its primary endpoint on some of the Phase III trials on which the NDA is based. JNJ went ahead with the NDA anyway because it felt that the risk/benefit analysis still favored esketamine. It is not difficult to imagine the same FDA panel using the same reasoning to reject the drug on the basis of the same risks mentioned above. Like ALKS-5461, if Phase III efficacy data were stellar, it could be a different story, but that's not the case with esketamine either.

Allergan's Rapastinel may be a different story, though. While it also acts on the NMDA receptor in the brain, it doesn't fully block it but only modulates it. Called an allosteric modulator, it binds to a different area of the receptor that influences its activity indirectly. Also, since it is administered by injection, it must be administered in a clinical setting, limiting the potential for abuse.

Top-line data on Rapastinel Phase III are due in the first half of 2019. If esketamine is rejected next year by the FDA, that would put the TRD market squarely in the hands of Allergan, and it could help spur a renaissance in MDD drug development focused on a new mechanism of action, that is modulation of the NMDA receptor.

The risk here is that, as mentioned and recently discovered in August, drugs targeting the NMDA receptor also have the same opiate receptors involved, and the FDA may reject both Allergan and JNJ on similar grounds that ALKS-5461 was rejected.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.