Prior to today's announcement, Alkermes management appeared confident in the data supporting the approval of ALKS 5461. Alkermes had planned for the company to grow its salesforce by as much as 70% to support the marketing of the drug.

However the phase III program had experienced several initial failures to meet primary endpoints. Alkermes conducted three phase III treatment-resistant depression trials with ALKS 5461. Two of the trials missed their primary endpoints.

The company's stock plunged 44% in January of 2016 when Alkermes announced results of the first two studies. Alkermes used some of the data from the first two trials and success in the third trial to present the overall data as supportive of ALKS 5461.

The FDA apparently did not agree. Alkermes revealed that the agency, “is unable to complete a substantive review”, because the application contains, “insufficient evidence of overall effectiveness.”

Where this leaves ALKS 5461 is unclear at this point. Additional trials will be expensive and the odds do not appear to favor success.