Alkermes' Narcolepsy Drug Advances to Late-Stage Testing, Joining Competitive Orexin Market

Alkermes has announced positive Phase 2 trial results for its narcolepsy drug alixorexton, paving the way for late-stage testing and potentially reshaping the competitive landscape in orexin-targeting therapies. The advancement comes as several pharmaceutical companies race to develop treatments for narcolepsy, a condition affecting an estimated 135,000 to 200,000 people in the United States alone.

Promising Phase 2 Results

Alkermes reported that all three doses of alixorexton (formerly ALKS 2680) demonstrated significant improvements over placebo in maintaining wakefulness. The drug achieved "normative wakefulness," with participants taking more than 20 minutes to fall asleep in a controlled setting. Importantly, the treatment was well-tolerated, with no serious adverse events or safety signals observed in vital signs, liver, kidney, or eye exams.

Craig Hopkinson, Alkermes' Chief Medical Officer and head of research and development, stated that the company is "moving forward expeditiously" to initiate global Phase 3 testing. The positive results mark an "important stride forward" for both the alixorexton program and Alkermes' broader portfolio of orexin 2 protein-amplifying therapies.

Competitive Landscape and Market Potential

The narcolepsy treatment market is becoming increasingly competitive, with several pharmaceutical giants vying for a share. Just a week prior to Alkermes' announcement, Takeda reported positive results from two late-stage trials of its orexin drug, oveporexton. Takeda plans to file for marketing approval in the U.S. and other markets by the end of March.

Jefferies analyst Stephen Barker estimates that oveporexton could reach $3 billion in peak annual sales for narcolepsy Type 1 alone. Similarly, TD Cowen analyst Joseph Thome projects Alkermes' alixorexton to potentially achieve $2 billion in annual sales, factoring in approvals for both narcolepsy types 1 and 2.

Other companies developing orexin-targeting therapies include Eisai, Jazz Pharmaceuticals, and Centessa Pharmaceuticals. Johnson & Johnson is also exploring an orexin 2-targeting medicine, but for major depressive disorder with insomnia symptoms in adult and elderly patients.

Investor Reaction and Future Outlook

Despite the positive trial results, Alkermes' share price initially dropped by as much as 10% following the announcement, before recovering slightly to trade down around 5%. Evercore ISI analyst Umer Raffat noted that many investors "were on the sidelines" regarding Alkermes' orexin program prior to the disclosure.

As Alkermes prepares for Phase 3 trials, the company plans to present more detailed data at a medical meeting in Singapore in September. Ongoing studies include an extension trial for participants from the main study and experiments assessing alixorexton in adults with narcolepsy type 2 and idiopathic hypersomnia.