Alkermes plc (NASDAQ:ALKS) already markets Aristada for use every four or six weeks, but soon the company's sales force will be able to offer a new reason why doctors should prescribe it: an even longer dosing interval. Yesterday, the Food and Drug Administration approved Aristada for use every two months, and that longer dosing interval may boost prescriptions because it is notoriously difficult to keep schizophrenia patients on short-duration dosing schedules.

New and improved treatment options

Alkermes is a bit of an expert when it comes to extended-release medicines for psychiatric indications. The company's work in the past on Invega, for example, has helped Johnson & Johnson (NYSE:JNJ) launch increasingly longer-lasting formulations of it that are generating billions of dollars in sales annually and, correspondingly, a steady stream of royalty payments for Alkermes.

A picture of an approval stamp.

IMAGE SOURCE: GETTY IMAGES.

Nowadays, Alkermes has focused a lot of its attention on crafting its own long-lasting treatments, and Aristada is one of the most important of these drugs.

Aristada is an extended-release formulation of the top-selling oral Abilify, a common drug used to treat schizophrenia, bipolar disorder, and depression. After studies showed it maintained treatment effect compared to placebo in patients with acute schizophrenia who had responded to Abilify, Aristada won FDA approval in 2015 for use in schizophrenia patients every four or six weeks.

Its approval was an important advance in treatment because patients with schizophrenia have historically poor adherence rates to short-duration therapy and are thus often inadequately treated.

Unfortunately, only a small percentage of the 2.4 million or so Americans with schizophrenia recognize their need for treatment and, as a result, the vast majority stick to their dosing schedule as prescribed. Because inadequate treatment can result in relapses, frayed relationships, and isolation that shortens life expectancy significantly, there's an important need for new treatment alternatives.

Currently, short-duration medication remains the go-to initial therapy for schizophrenia, but more doctors are recognizing the important role that long-lasting formulations may play in treatment. That's been good news for Alkermes because it's meant rising demand for Aristada. 

In the first quarter, for example, Aristada's prescription volume grew roughly 16% from the fourth quarter, and rising volume over the past year propelled Aristada's sales up 227% to $18 million in the period.

Now that Aristada's won approval for two-month dosing, sales could grow even more quickly, especially if this approval gives it a better shot at competing with Otsuka's once-monthly Abilify Maintena and Johnson & Johnson's Invega Trinza, a schizophrenia treatment that can be given every three months. As of March, Aristada's market share in the long-lasting Abilify market where it competes with Maintena had improved to 20% from 10% last year.

Meanwhile, sales of Johnson & Johnson's Invega family of schizophrenia drugs, including Trinza, clocked in at more than $600 million in the first quarter, suggesting a big potential market opportunity exists there, too. Going forward, doctors and patients may prefer Aristada's two-month dosing over Trinza because Trinza is associated with weight gain and a risk of sexual dysfunction.

Looking ahead

Only time will tell what Aristada's peak sales potential is, but management is guiding for Aristada revenue of greater than $19 million in the second quarter and 100% sales growth this year, and that forecast was made prior to this latest approval.

If management can deliver on that prediction, then Aristada revenue could help propel the company to profitability this year and potentially allow it to deliver on industry watchers' predictions for earnings per share of $0.64 in 2018. 

 

Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool recommends Alkermes. The Motley Fool has a disclosure policy.