Allergan's Rapid-Acting Antidepressant Fails in Key Studies

(Bloomberg) -- Allergan Plc shares fell after saying its fast-acting depression drug failed to show an improvement in symptoms beyond the placebo effect in three key studies.

The drug, rapastinel, didn’t succeed in either the primary or secondary endpoints, which are critical measures needed for approval. The news comes less than a day after Johnson & Johnson’s Spravato nasal spray was approved by the U.S. Food and Drug Administration as the first-ever rapid-acting anti-depressant. Allergan is studying its drug in both severe depression and suicidal thinking.

Allergan shares dropped 3.2 percent in late trading in New York. They are up 2.9 percent this year through Wednesday’s close.

The poor results “will likely dampen sentiment” around the rest of Allergan’s pipeline and revive calls for a possible breakup of the company, RBC Capital Markets analyst Randall Stanicky wrote to clients. “This was the most anticipated data release of the year” and may cost Allergan a $1 billion to $2 billion peak sales opportunity, he said.

“We are deeply disappointed with these results, and they are a vivid reminder that drug development is extremely challenging, especially in mental health,” said David Nicholson, head of research & development at Allergan.

The drugmaker said it will examine those results and determine this year whether or not to keep studying rapastinel in major depressive disorder as a stand-alone treatment, and in suicidal thinking.

Allergan said the drug was well-tolerated. Analysts had been hopeful about rapastinel in part because it didn’t appear to cause patients to have an out-of-body symptom known as disassociation, which did occur in some patients taking J&J’s rapid-acting antidepressant.

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