Allergan's Depression Candidate Fails In Studies, Stock Down

Allergan plc (NYSE:AGN) announced that three acute pivotal studies on depression candidate, rapastinel, failed to meet their primary endpoint. The studies were evaluating rapastinel, its NMDA receptor modulator, as an adjunctive treatment of major depressive disorder (MDD) compared to placebo, both in combination with antidepressant therapy (ADT)

In the studies, the rapastinel treatment arms did not differentiate from placebo on the primary and key secondary endpoints. Rapastinel is also being evaluated as a monotherapy treatment for MDD in phase III and for treating MDD patients at imminent risk of suicide in phase II. After evaluating the impact of the data from the failed studies, Allergan said it will make a decision on these monotherapy studies this year.

Allergan’s stock was down 1.9% in response to the news. Allergan’s share price has risen 2.9% this year so far compared with the industry’s increase of 8.3%.

Please note that Rapastinel was granted breakthrough therapy status for MDD by the FDA in 2016 and was considered by Allergan to be a potentially game-changing treatment.

However, making drugs to treat mental disorders is extremely challenging and there have been several failures in the past.

Last month, the FDA gave a complete response letter to Alkermes plc’s (NASDAQ:ALKS) new drug application looking for approval for ALKS 5461, a once-daily oral medication for adjunctive treatment of MDD.

However, the depression market has had its share of successes as well. Earlier this week, J&J (NYSE:JNJ) gained FDA approval for its new nasal spray, Spravato (esketamine) for treatment-resistant depression (TRD). The nasal spray has been approved for use in conjunction with an oral antidepressant in patients with MDD who have not benefited from multiple standard treatments. Approximately, one-third of U.S. adults with MDD are considered to have TRD as they have not found relief with at least two different antidepressants and could benefit from Spravato.

The depression market is quite large and has many players. Allergan itself has a couple of products in its portfolio, Vraylar and, Viibryd. Eli Lilly (NYSE:LLY) markets depression drugs like Cymbalta, Prozac and Zyprexa.

Allergan currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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