Depression is so common that experts refer to it as the "common cold" of mental health. But treatment options are still coming up short for the up to 16 million Americans who suffer clinical depression each year, even though antidepressants are one of the most commonly prescribed therapies on the planet. According to the National Institute of Mental Health, just half of those suffering from depression receive treatment for their disease, and more than a third of those patients are categorized as "receiving minimally adequate care." That treatment gap suggests there is particular cause for excitement in Alkermes' (NASDAQ:ALKS)  announcement this week that ALKS-5461 for major depressive disorder, or MDD, hit end points for efficacy in an early part of phase 3 trials.

Improving outcomes
Overall, 66 patients with MDD received ALKS-5461 daily alongside commonly prescribed SSRIs or SNRIs. The results showed that ALKS-5461 was well tolerated by patients, but more importantly, that patients taking the drug saw a statistically significant improvement in scores on the Montgomery-Asberg Depression Rating Scale over the eight-week study period.

The study is the first part of a broader three-part series of trials evaluating 1,500 patients to determine whether ALKS-5461 is effective at easing the symptoms of depression. 

A big market opportunity
If the other two longer-lasting trials confirm ALKS-5461's success, and the drug eventually wins FDA approval, it could improve the lives of millions of patients and significantly boost Alkermes' financials.

Currently, depression is treated with a slate of blockbuster therapies that work similarly by inhibiting the uptake of the neurotransmitters serotonin and norepinephrine, which are associated with mood control. These treatments are so common that antidepressants are the fourth-most prescribed drugs in the United States. The antidepressant market was worth $9.5 billion in 2012, and, according to Express Scripts, it was ranked seventh by total prescription spending in 2013.

Over the last decade, four antidepressant medicines have achieved peak sales north of $1 billion. Cymbalta, which is made by Eli Lillyhad U.S. sales of $2.6 billion in 2013 prior to losing patent protection. Other top-selling antidepressants in the last 10 years include Actavis' Lexapro, which saw U.S. sales peak at $3 billion in 2011, and Pfizer's  Zoloft, which saw U.S. sales peak at $2.6 billion in 2005.

Most of these top sellers have lost patent protection, and an absence of new treatments means most of market has shifted to low-cost generic alternatives. This could suggest an eventual launch of ALKS-5461 might reinvigorate the category. That's because ALKS-5461, a nonaddictive opioid modulator, works differently than SSRIs and SNRIs and is designed to be dosed alongside, rather than instead of, antidepressants.

Meeting a need
ALKS-5461 showed solid efficacy during midstage trials, and promising results from this phase 3 study seem to echo those findings. If that holds up in the remaining two phase 3 studies, doctors and patients might someday get a much-needed new medicine to battle back against depression. If that proves to be the case, Alkermes' ALKS-5461 could ultimately become a blockbuster drug.