Aug 27 (Reuters) - Alkermes Inc (ALKS.O) shares slipped nearly 10 percent a day after it said units of Johnson & Johnson (JNJ.N) have decided not to pursue further development of a four-week long-acting version of antipsychotic drug risperidone.
Alkermes collects revenue for manufacturing a version of the injectable drug, known commercially as Risperdal Consta, which lasts for two weeks.
On Thursday, Jefferies & Co analyst David Windley said J&J’s decision was likely influenced by the recent approval of Invega Sustenna and revenue losses to generics.
On July 31, U.S. health regulators approved J&J’s once-monthly, long-acting, injectable atypical antipsychotic Invega Sustenna for treatment of schizophrenia in adults.
“Sustenna’s approval achieves the once-monthly dosing, at least well enough in light of J&J’s budget pressures in the pharma business,” Windley said in a research note.
He lowered rating on Alkermes stock to “hold” from “buy” and cut his price target on the stock to $11.50 from $14.00.
On Wednesday, Alkermes said the two-week version of Risperdal Consta continues to be marketed in more than 60 countries as the only long-acting atypical antipsychotic therapy available for both the treatment of schizophrenia and bipolar I disorder.
“Consta remains in J&J’s long-term plans, but this decision will only fan the flames of the long-standing overhang stemming from the fact that Alkermes’ partner is also committed to another similar product in the same space,” said Robert W. Baird analyst Thomas Russo.
He maintained a “neutral” rating on Alkermes’ stock.
Shares of the company were down 10 percent at $9.36 in premarket trading. They closed at $10.37 Wednesday on Nasdaq. (Reporting by Shailesh Kuber in Bangalore; Editing by Aradhana Aravindan)