Alkermes PLC (NASDAQ: ALKS) absolutely tanked early Thursday morning on less than favorable top-line results. The company announced preliminary top-line results from the first two of three Phase 3 efficacy studies (Forward-3 and Forward-4) for ALKS 5461. Although the results failed to live up to expectations, this could just be a minor setback for Alkermes.

For some background: ALKS 5461 is a once-daily, oral investigational medicine with a novel mechanism of action for the adjunctive treatment of major depressive disorder (MDD) in patients who have an inadequate response to standard therapies for clinical depression.

Neither of these two studies met the prespecified primary efficacy endpoint, but in this type of clinical trial statistical analysis is not always on point.

The company did note in its release that “Negative trials due to significant placebo effect are not uncommon in the study of major depressive disorder.”

At the very least, these results could just be a minor setback in the timeline for ALKS 5461 until Alkermes moves on to its Forward-5 study.

Alkermes is already looking ahead to the next study and requesting a meeting with the U.S. Food and Drug Administration (FDA) Division of Psychiatric Products to discuss the regulatory path for this Fast Track designated medicine. The company also intends to incorporate the findings from the Forward-3 and Forward-4 studies to push ahead with Forward-5, potentially increasing the number of enrollees and updating the statistical analysis plan.

Elliot Ehrich, M.D., chief medical officer of Alkermes, commented:

We are gaining important insights as we proceed with the Forward program for ALKS 5461. The third pivotal efficacy study, Forward-5, is ongoing and we plan to adapt it to incorporate findings from Forward-3 and Forward-4. Clinical trials of new medicines for the treatment of major depressive disorder are complicated by significant placebo response. We designed the Forward pivotal program to include three efficacy studies as we recognize that this is a challenging disease state where multiple clinical studies and expansive analyses are generally necessary to confirm the efficacy of a new medicine.

Shares of Alkermes closed Wednesday up 1.5% at $60.42, with a consensus analyst price target of $76.50 and a 52-week trading range of $53.01 to $80.71. Following the release of the top-line results, the stock fell by nearly 30% to $42.50 in early trading indications on Thursday.

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