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What: Shares of Alkermes (NASDAQ:ALKS) shed up to 43% of their value on extraordinary volume in early morning trading today after the company announced that its orally administered drug ALKS-5461, indicated for major depressive disorder (MDD), failed to meet its primary endpoints in two late-stage studies. The drug is presently in a third late-stage study, and Alkermes said it plans on updating investors on the progress of this remaining study later this year. 

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So what: According to analysts polled by S&P Capital IQ, peak sales for ALKS-5461 as a treatment for MDD in patients that fail to respond to the current generation of available medicines could have reached into the $500 million range -- that is, before today's disappointing news. After all, nearly 7 million out of the 11 million patients taking anti-depressants for MDD fail to respond to any commercially available therapy.  

Now what: Alkermes reported that a post-hoc analysis revealed that the entire 2 mg/2 mg dosing group in the so-called "FORWARD-4" study reached statistical significance in terms of reducing symptoms associated with MDD when compared to patients taking placebo.

While that's good news, it's important to keep in mind that this result can't be taken as direct evidence of the drug's efficacy. Investors are therefore going to have to wait for the final ongoing study to wrap up in order to get any real insight into ALKS-5461's fate as a treatment for MDD.

Having said that. these initial late-stage results don't bode well for the drug's development for this indication, meaning that investors probably shouldn't give it too much weight as they start to revise their valuation models today. 

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.