If you were to poll Wall Street a few months ago for impressions of Alkermes’ naltrexone injection (Vivitrol), you’d hear a number of things. Most aren’t good.
It’s a bust. They still own that? Who cares?
Seeing the name Vivitrol in my inbox, I must admit, makes me think first about a drug that never lived up to its promise in treating alcohol addiction, which triggers the “delete e-mail immediately” reflex. Waltham, MA-based Alkermes (NASDAQ: [[ticker:ALKS]]) knows that no one wants to hear rosy forecasts for this drug as a treatment for alcohol addiction. After more than four years on the market, it generated just $7.7 million in the final quarter of 2010. But Alkermes is hard at work now to see if this drug can mount a comeback by fighting another serious public health problem—addictions to opioid-based narcotics like heroin and prescription painkillers like oxycodone.
“Vivitrol in opioid addiction is a whole different ballgame than Vivitrol in alcohol,” Alkermes CEO Richard Pops said when we chatted a few weeks ago in San Francisco. As Cory Kasimov, an analyst with JP Morgan who surveyed doctors in December put it, “there is indeed an established pharmaceutical marketplace for the treatment of opioid dependency (unlike alcoholism) and physicians are interested in using Vivitrol.”
The FDA first cleared the once-monthly injectable version of Vivitrol as a treatment for alcohol addiction in 2006. The data to support its safety and efficacy was strong, Pops says. Alkermes’ partner, Frazer, PA-based Cephalon (NASDAQ: [[ticker:CEPH]]) was optimistic, pumping in a lot of money and getting little in return, Pops says, before it basically gave up and handed the drug back to Alkermes in December 2008.
Not much new really happened for this product until last October, when the FDA approved Vivitrol for its second use, as a treatment for opioid-based addictions. Janet Woodcock, the director of FDA’s Center for Drug Evaluation and Research said that day in a statement that Vivitrol’s new approval, “represents a significant advancement in addiction treatment.”
While skeptics breezed past that announcement, Alkermes has been working behind the scenes to better understand this market. As Pops puts it, the customers and their motivations are completely different. While there are an estimated 18 million people in the U.S. with alcohol dependence problems, only about 1 million seek treatment, and most of them just get counseling. In contrast, about 1.6 million people in the U.S. are addicted to opioid-based drugs, and about three-fourths of them seek treatment, which comes in a combination of medication and counseling, Pops says. Many opioid-based drug addicts also cycle through the criminal justice system over and over, costing states and counties a fortune. Massachusetts alone spends more than $100 million a year on one therapy buprenorphrine and naloxone (Suboxone) to help treat opioid addiction, and $300 million for methadone (the drug doctors often use to wean people off heroin). Massachusetts alone spends more money on dealing with substance abuse than it does on higher education, Pops says. It’s little surprise that in an era of budget cutting, Gov. Deval Patrick has taken a personal interest in what his constituents at Alkermes have come up with—not just because it might bring business revenue into the state, but it might save the state some money and trouble.
While alcoholics get counseling as the standard of care, opioid-drug addicts tend to get Suboxone, which has become a $1 billion-a-year seller for U.K.-based Reckitt Benckiser Pharmaceuticals, Pops says.
There are important differences between that drug and the new one from Alkermes. The established product is essentially another form of opioid, like methadone, which keeps people
