Source: Alkermes.

Investors looking for biopharma stocks to own for the remainder of 2015 might want to take a close look at Alkermes (ALKS -2.36%), a drugmaker with upcoming catalysts that could catch investors' attention and propel its shares higher.

Improving treatment for millions of patients
While Alkermes' peers are shifting research efforts away from mental health to oncology and rare diseases, Alkermes is doubling down on mental health with a slate of promising drugs that improve on existing treatments.

One of the most intriguing of Alkermes' drugs is its long-acting version of the schizophrenia drug Abilify, a widely-used atypical antipsychotic that lost patent protection earlier this year and enjoys sales of more than $7 billion annually.

If approved, Alkermes' long-acting variation of Abilify will compete against Maintena, a once-monthly version of Abilify that won FDA approval in 2013. Alkermes believes that it stands a very good chance of outmaneuvering Maintena because its version doesn't require reconstitution (that is, it will be ready to use), it will be available in a wider range of doses, and it can be dosed in multiple injection points.

Alkermes has already hired 175 people and has begun producing its long-acting Abilify in anticipation of approval, but this isn't the only needle-moving atypical antipsychotic drug Alkermes is working on. The company is also developing a new variation of top-selling schizophrenia drug Zyprexa which racked up more than $2 billion in annual sales before losing patent protection.

Today, Zyprexa and its generic alternatives remain one of the most widely-prescribed atypical antipsychotics, accounting for 20% of all atypical antipsychotic prescriptions. In hopes of winning away that script volume, Alkermes is developing ALKS-3831, a drug that improves upon Zyprexa by reducing the most significant reason people discontinue its use: weight gain. Historically, 64% of patients taking Zyprexa for longer than 48 weeks see their weight increase by at least 7%, and 12% of patients see their weight increase by 25% or more. In trials, ALKS-3831 has shown similar efficacy to Zyprexa, with a dramatic 37% reduction in weight gain. If those results hold up in additional trials, then ALKS-3831 may be perfectly positioned to win away Zyprexa market share.

Alkermes' atypical antipsychotic pipeline is compelling, but investors shouldn't discount the market opportunity for Alkermes' next-generation depression drug, ALKS-5461, either. There haven't been many advances in depression treatment since the launch of SSRIs and SNRIs in the 1990s, and that suggests that there may be an opportunity for ALKS-5461 to reinvigorate the category. Unlike SSRIs and SNRIs that inhibit the uptake of neurotransmitters to improve mood, ALKS-5461 is a non-addictive opioid modulator that when used alongside SSRIs and SNRIs may alleviate the symptoms of depression. Early results from late-stage trials show that patients taking ALKS-5461 and an SSRI or SNRI had a statistically significant change from baseline on a commonly-used depression scale.

Alkermes hopes to release data later this year proving that ALKS-5461 isn't addictive, and full phase 3 trial results should begin being reported in the first quarter of 2016. Since ALKS-5461 has fast-track designation that could accelerate the timeline for approval, positive phase 3 results could have Alkermes winning a regulatory OK by late 2016 or in 2017. If so, then ALKS-5461 could become a top seller as an adjunct to SSRIs and SNRIs in patients inadequately controlled by SSRI and SNRI monotherapy.

Because roughly 7 million of the 11 million people taking SSRI or SNRI therapy failed on first-line SSRI or SNRI treatment, the ALKS-5461 addressable patient population could prove to be massive.

Source: Alkermes.

Looking forward
Alkermes has a lot riding on the future potential of these drugs, so any stumble could cause shares to drop. A lot can go wrong in late-stage studies that could derail Alkermes' strategy; however, some risk is mitigated by the fact that Alkermes is concentrating on improving existing therapies that address proven therapeutic targets. After considering all the various puts and takes, I think that the potential for reward outstrips the risk of owning shares, and for that reason, I think Alkermes can be bought for portfolios.