Tale of two antidepressants: FDA approves J&J’s esketamine; Rapastinel’s failure raises pressure on Allergan CEO

By PharmaCompass

2019-03-14

Impressions: 183 Article

Last week, the USFDA approved Johnson & Johnson’s Spravato (esketamine), a drug derived from ketamine (an anesthetic), making it the first new kind of depression medication approved in the last 35 years.

The FDA nod came as a surprise, as ketamine is often abused as a party drug. Although ketamine is officially sanctioned as an anesthetic and not as an antidepressant, it is prescribed by psychiatrists to treat depression. Both ketamine and esketamine are said to have potentially harmful side effects.

In its battle against ketamine-like antidepressants, Dublin-based Allergan had pitched rapastinel — an antidepressant medication with a better safety profile than Spravato. However, the Botox maker suffered a huge blow last week as rapastinel’s Phase III trial results showed no signs that it actually works.

The failure of rapastinel, one of Allergan’s key pipeline projects, puts the group’s CEO Brent Saunders under even more pressure, especially after he faced flak from hedge fund Appaloosa to split the roles of the CEO and chairman.

The failure of rapastinel also raised questions about Allergan’s acquisition strategy. Back in 2015, Saunders had led Allergan’s acquisition of Naurex Inc. with an eye on rapastinel.

Activist shareholders have also been demanding a leadership change at Allergan, and complaining about the stock being at a five-year low.

However, a portion of the investor community continued to have faith in Allergan’s abilities in medical aesthetics, a segment comprising products like Botox, Juvederm, and CoolSculpting. The segment made up for roughly 28 percent of Allergan’s 2018 sales and grew 13 percent over the previous year. However, the segment is expected to face competition from Evolus’ Jeuveau, which is likely to be launched in spring this year.

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