Alkermes stock skidded Monday — while shares of rivals Centessa Pharmaceuticals, Takeda Pharmaceutical and Jazz Pharmaceuticals rose — on the back of mixed results for its experimental narcolepsy treatment.
All four companies are working on drugs that act on orexin receptors in the brain. Doing so promotes wakefulness, but has also led to visual disturbances in earlier-stage testing.
Alkermes said its orexin-focused drug, alixorexton, improved wakefulness after six weeks in comparison to the placebo. All three doses also resulted in improvements in excessive daytime sleepiness, though only the middle dose led to better cataplexy rates. Cataplexy, a hallmark of narcolepsy, is a brief loss of muscle tone triggered by a strong emotion.
But the press release was light on details and analysts noted patients experienced visual disturbances in earlier-stage testing of Alkermes' alixorexton. Evercore ISI analyst Umer Raffat says there were likely some cases of visual disturbances.
Alkermes shares tumbled 8.8% to close at 26.66. Shares of Centessa advanced 2.3%, while Takeda rose a fraction and Jazz shed less than 1%.
Light Details From Alkermes
RBC Capital Markets analyst Leonid Timashev says more details on side effects will be key for Alkermes.
"We continue to weigh tolerability risks as a sentiment-overhang for the class, though (we) believe today's qualitative showing leans positive," he said in a report.
In late 2023, Jazz halted a study of an orexin agonist due to visual disturbances and cardiovascular side effects. Visual side effects occurred in Alkermes' first-phase study as well. Takeda and Centessa, though, haven't noted any similar problems in their studies.
Still, Timashev says Takeda's recent positive results and Alkermes' release on Monday are helping de-risk the drug class. Centessa will likely be the next to release updated results "in the coming weeks."
Leerink Partners analyst David Risinger called out Centessa's ORX750. He says the potential for visual disturbances with Alkermes' drug could give Centessa's room to differentiate.
"Importantly, the PR (press release) stated there were no safety signals related to hepatic or renal function, vital signs or ophthalmic assessments," he said in a report. "However, the PR did not comment on visual disturbances; it just started 'there were no safety concerns that showed up in ophthalmic exams taken at the end of the study.' "
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
