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Pictured: A fork in a dirt road/iStock, by-studio Dublin-based Alkermes is one of the industry’s most recent examples of a global biopharma spinning off a business as part of its strategy to generate profitability and cash flow. Alkermes entered 2024 as a pure-play neuroscience company focused on difficult-to-treat psychiatric and neurological disorders, having completed the separation of its oncology business into a new company, Mural Oncology, in November 2023. Founded in 1987, Alkermes decided a couple of years ago to “clean up and clarify” the company’s business for investors, CEO Richard Pops told BioSpace. “Alkermes has always been so multivalent, so complicated. We had a legacy drug delivery royalty business—with large cash flows coming from that. We had a neuroscience business, a commercial business. We had an oncology business. And we didn’t fit in a particular category,” Pops said. The CEO compared Alkermes’ evolution over the years to a tree with two trunks: neuroscience and oncology. “When you plant the tree and it’s growing, for a while it’s no problem. But pretty soon they get big, and you’ve got to decide how you’re going to support both of them,” Pops said. Spinning off Alkermes’ oncology business by creating Mural Oncology, a public company, was a big undertaking given the IRS and SEC regulations, Pops said, but the cancer business deserved its own capital, instead of sharing with the neuroscience arm of the business. Moreover, Alkermes now has “a really clear story,” Pops said. “It’s a pure-play neuroscience company that has a billion dollars of revenue and growing.” It’s important to have that division for oncology-focused investors and analysts and those following the neuroscience market, he said. Jazz Pharmaceuticals, on the other hand, has opted not to divorce its neuroscience and oncology pipelines. Bruce Cozadd, co-founder and CEO, told BioSpace that the Dublin-based company has been in the neuroscience space since its founding in 2003, only beginning to target oncology nine years later. Today, about half of Jazz’s revenues currently come from its oncology portfolio. “Both of those businesses are growing and have robust pipelines,” Cozadd said. He added that while he’s aware of companies like Alkermes that have separated their neuroscience and oncology businesses, Jazz was not considering such a move. Cozadd pointed to his company’s financial strength as one reason for that decision. Jazz reported late last month that its oncology revenue surpassed $1 billion in 2023, while total neuroscience revenue came in at $2.8 billion. By comparison, Alkermes last month announced total 2023 revenues of $1.66 billion. As of Dec. 31, 2023, Jazz had $1.6 billion in cash, cash equivalents and investments, while Alkermes reported about half that. “We’re in the fortunate position that we can fund our key growth drivers commercially . . . while at the same time making pipeline investments,” Cozadd said. To expand its early-stage oncology pipeline, Jazz last month bought Redx Pharma’s KRAS inhibitor program in a potential $880 million deal, including preclinical-stage drug candidates, with the companies working to advance assets through IND-enabling studies. However, it hasn’t been smooth sailing for Jazz’s neuroscience business. In December 2023, Jazz reported top-line Phase II results for JZP150—a small molecule being studied in patients with post-traumatic stress disorder—showing that the investigational candidate fell short of its primary efficacy endpoint and failed to meet key secondary endpoints. “We’re not in both oncology and neuroscience because of some mechanistic scientific medical reason,” Cozadd said. “We’re in these two areas because we look for areas where there’s significant unmet medical need and we can offer a differentiated product that really benefits patients in a unique way.” While Jazz’s neuroscience portfolio currently generates more revenue than its oncology business, the nearer term “larger” potential opportunities are in the oncology pipeline, according to Cozadd. “We don’t have a particular goal of a ratio,” he added. “I’d like both of them to be as big as possible.” Greg Slabodkin is the news editor at BioSpace. You can reach him at greg.slabodkin@biospace.com. Follow him on LinkedIn.

Jazz’s latest clinical setback comes less than a month after the biotech paused a phase 1 trial of its sleep disorder med JZP441. Jazz Pharmaceuticals is planning to drop its post-traumatic stress disorder (PTSD) therapy after the small molecule selective fatty acid amide hydrolase (FAAH) inhibitor failed to beat placebo in a phase 2 study. The biotech had been testing the drug, dubbed JZP150, in a trial of 282 patients diagnosed with PTSD aged 18 to 70 years who were randomized to receive either 0.3 mg or 4 mg doses of the therapy or placebo. At 12 weeks, JZP150 was unable to show a statistically significant decrease in the severity of PTSD symptoms over placebo, missing the trial’s primary endpoint. No new safety signals were observed, the biotech noted. The most common treatment-emergent adverse events were headache, nausea and urinary tract infection, although the company pointed out that these also occurred in placebo-treated participants. "We plan to fully evaluate these data; however, based on topline results we do not anticipate moving forward with additional JZP150 development in PTSD,” Rob Iannone, M.D., Jazz’s global head of R&D, said in the post-market release Thursday. “We recognize the significant unmet need for PTSD patients and plan to share the findings from this trial with the medical community at a future date," Iannone added. Jazz had high hopes for JZP150, having previously pointed out that it had a chance of becoming the first new drug approved in 20 years for patients with the disorder. PTSD has been in the headlines recently as the Multidisciplinary Association for Psychedelic Studies' submitted a new drug submission for MDMA to treat the condition, marking the first time ever that the agency will consider approving a psychedelic-assisted therapy. Jazz’s latest clinical setback comes less than a month after the biotech paused a phase 1 trial of its sleep disorder med JZP441 in the wake of reports of “visual disturbances” and cardiovascular effects. Executives wouldn’t go as far as to fully terminate the orexin-2 receptor agonist, which was licensed from Sumitomo Pharma, instead saying at the time that they were looking to further investigate the side effects and how to potentially mitigate them.  Discussing those JZP441 results on a Nov. 28 conference call, executives made sure to swiftly transition from bad news to good, announcing that Jazz planned to initiate rolling submission of its bispecific antibody zanidatamab before the end of the year. The company is seeking accelerated approval as a second-line treatment for patients with biliary tract cancer, with the application set to be completed by the first half of 2024.