Alkermes to Break Oncology Sector into Independent Company

After some early success with its new schizophrenia treatment and high hopes for its future, Alkermes announced its intent to separate its neuroscience and oncology divisions, moving its cancer treatment development programs to an independent company. The tentatively named Oncology Co. would be publicly traded and financially independent from Alkermes, which would remain focused on neuroscience products and development.

Banking on Lybalvi’s Success

The driving force behind the split between Alkermes’ neuroscience and oncology divisions is the company’s expectations for its new schizophrenia treatment, Lybalvi. Approved last October, the drug is already generating substantial revenue for Alkermes. The company posted third-quarter results earlier this week, with Lybalvi bringing in $27.1 million.

Alkermes’ other commercialized neuroscience products include Aristada, another schizophrenia treatment, and Vivitrol, a substance abuse treatment. In total, the company’s proprietary products brought in $199.4 million by the end of the third quarter. 

Based on the neuroscience division’s current success, Alkermes plans to separate the oncology sector to simplify strategies and fund allocations. The company says the separation would benefit shareholders and allow both areas to thrive with the care and attention they need.

Lead Independent Director of Alkermes’ Board, Nancy Wysenski, said, “The potential separation of the oncology business from Alkermes’ neuroscience business would offer a platform to enhance the performance of both businesses and unlock shareholder value…as we look ahead, the Board unanimously agrees that the unique needs of each business would be best served by simplified resource and capital allocation decision making, tailored operating structures, and distinct leadership teams, each with a clearly defined strategic focus.”

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Forming an Independent Oncology Company

With several development candidates in Alkermes’ pipeline, the future Oncology Co. is on track for a successful industry debut. Alkermes said it hopes to finalize the separation and launch of Oncology Co. in the second half of next year. 

One of Alkermes’ primary oncology focuses lies in its IL-2 variant immunotherapy, nemvaleukin. The investigational drug is in Phase 2 and 3 studies evaluating its effect on mucosal melanoma and platinum-resistant ovarian cancer. 

The new company would also continue developing preclinical prospects targeting IL-12 and IL-18. Alkermes is also developing HDAC inhibitors, which are in the preclinical phases.

Alkermes plans on locating the future Oncology Co. at the current Waltham, Massachusetts campus. The manufacturing and research facilities in Wilmington, Ohio, and Athlone, Ireland, will remain in Alkermes’ hands. The separation is subject to customary closing conditions and the Board of Directors’ final approval. 

Separating Alkermes’ neuroscience and oncology divisions would provide independent fund allocations for each while allowing specialized teams to develop targeted strategies for each company. If the deal closes and Oncology Co. launches, it would likely happen in the second half of next year. Until then, Alkermes will continue developing and selling novel therapies while it continues to plan for the massive restructuring. 

Author

Reed Slater