Alkermes Eyes Gains with Oncology Spinoff Thanks to Inflation Reduction Act

November 2, 2022

The Irish biotech Alkermes announced it will spin out its oncology division as it pivots to biologics development. The move is one made by several pharma and biotech giants in recent weeks due to rules surrounding price capping. While small molecule drugs can be negotiated by Medicare after 9 years on the market, the wait period for biologics is 13 years.

According to Alkermes’ CEO Richard Pops, “It’s not a matter of waiting for price controls that are being imposed in a matter of time — capital allocations have changed today in favor of biologic molecules over small molecules, given the longer period of exclusivity. It’s been reckoned that the difference between 13 and nine years is about 50% of the total cash on cash from a revenue perspective. So if you can interrogate a biological target with it with a biologic now, you have to do that compared to a small molecule”

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