ANALYSIS-Alkermes' Vivitrol needs opioid market to boost sales

By Vidya L Nathan

BANGALORE, Dec 22 (Reuters) - As sales of Alkermes Inc's drug to treat alcohol dependence, Vivitrol, have failed to take off, analysts are hoping that data from the drug's opioid dependence trials will give it a fresh lease of life.

Data from late-stage trials for Vivitrol as an opioid dependence treatment is expected in the second quarter of 2009. The drug, an extended-release version of the generic anti-addiction drug naltrexone, has had trouble finding wider acceptance as a treatment for alcoholism due to several factors including its method of administration and price.

Alkermes had recently raised its earnings and revenue forecasts for 2009, to reflect sales from the drug accruing directly to the company, after former partner Cephalon Inc walked out of their marketing deal.

But analysts do not currently expect the drug to contribute much to Alkermes' earnings as they continue to see minimal penetration for Vivitrol in the alcohol-dependence market.

"We don't have it as ever becoming profitable," Natixis Bleichroeder analyst Jon LeCroy said.

Given current levels of sales, analysts do not expect Alkermes to invest further in the alcohol dependence indication.

"I think (Alkermes) has a pretty realistic idea of what the market is at this point so I don't think they're going to throw a lot of money behind it," Cowen & Co's Ian Sanderson said.

Gene Mack of Lazard Capital Markets thinks the company "will invest just enough to keep Vivitrol viable until they can assess" data from the opioid dependence studies.

The new indication is generally expected to be more profitable as physicians and patients in this addiction market are more accustomed to using injections.

Mack sees Alkermes as easily cornering a quarter of the opioid dependence market, which he estimated at several hundred million dollars.

However, Alkermes spokeswoman Jennifer Snyder said the company believes the use of medications like Vivitrol that have clinical evidence of efficacy for patients will grow over time.

"Moving forward, we believe we can increase sales of Vivitrol," Snyder added.

Still, she said the company plans to reduce its commercial team by about 15 percent to 70 personnel, although the number of field-based sales personnel is to remain largely unchanged at about 55.

NOT WIDELY USED

A main reason behind the lukewarm response to Vivitrol lies in the way the drug is administered.

Vivitrol is injected into a patient's buttocks and doctors need to ensure the needle goes past the fat layer and reaches the gluteal muscles when giving the drug.

This method of administration creates a problem in broader adoption of the drug by clinicians and counselors who are more used to prescribing oral drugs and treating alcoholism with behavior-modification therapies.

"Until there is a change in the treatment habits of clinicians, I don't see much hope for the drug in alcoholism," Lazard's Mack said.

Some also fault its efficacy and pricing.

"I think it was two-fold. One was price -- it was overpriced. Two, was the efficacy was not very impressive," Natixis' LeCroy said.

In August, U.S. health regulators said they had received 196 complaints of complications related to the use of Vivitrol, including pain, bleeding and swelling.

"I don't see that as a tremendous risk but it is clearly something that is going to make a tough selling message," Mack said.

ORAL ALTERNATIVES

Further afield, oral anti-abuse drugs, which are in early stage development, may prove more successful for the company.

The company is developing ALKS 29 as a treatment for alcohol dependency that can be administered orally, while ALKS 33 is similarly being developed for opioid abuse.

Alkermes shares have lost more than a third of their value so far this year. (Editing by Anthony Kurian)