[Ip-health] FT: Hepatitis C researchers battle to ‘nuke’ the competition

Thiru Balasubramaniam thiru at keionline.org
Tue Jul 29 03:50:06 PDT 2014


July 27, 2014 9:00 pm
Hepatitis C researchers battle to ‘nuke’ the competition

By Andrew Ward

Idenix has fewer than 100 employees and no products on the market. So what
was it that persuaded Merck
<http://markets.ft.com/tearsheets/performance.asp?s=us:MRK> to pay $3.85bn
– more than triple Idenix’s market capitalisation before the deal – to buy
the Boston-based biotech company
<http://www.ft.com/intl/cms/s/0/e6e67106-efd1-11e3-bee7-00144feabdc0.html> in

The answers lay in Idenix’s portfolio of experimental treatments for
hepatitis C, widening Merck’s arsenal in the battle for supremacy over

Little doubt exists over who leads the race. Gilead Sciences
<http://markets.ft.com/tearsheets/performance.asp?s=us:GILD>’ Sovaldi
medicine had sales of $5.8bn in its in its first six months on the market
this year, a record for a drug launch.

Gilead’s success has encouraged a cluster of other companies to

step up their pursuit of therapies for a condition affecting 150m people
worldwide. Analysts say the market could be worth up to $20bn a year by the
decade’s end.

Along with Merck, others in the chasing pack include AbbVie
Achillion, Bristol-Myers
Squibb <http://markets.ft.com/tearsheets/performance.asp?s=us:BMY> and Johnson
& Johnson <http://markets.ft.com/tearsheets/performance.asp?s=us:JNJ>.
While the burst of innovation around hepatitis C has stoked debate over
pricing because of the $1,000-a-day cost of Sovaldi, it is an example of
strong commercial incentives driving medical breakthroughs.

The rush of new drugs promises to transform treatment of a disease for
which previous therapies had low success rates and unpleasant side effects.

“The development of direct-acting antiviral agents has revolutionised
hepatitis C treatment by offering genuine prospects for the first
comprehensive cure of a chronic viral infection in humans,” say Harvard
liver specialists Raymond Chung and Thomas Baumert in the New England
Journal of Medicine. “It may now be possible to imagine the global
eradication of chronic hepatitis C.”

Previously, patients faced up to a year of medication on a pill called
ribavirin and injections of interferon, which boost the immune response to
hepatitis C but cause flu-like symptoms.

Many people failed to complete the course. Even for those who did, the
success rate was less than half in cases involving genotype one – the
hardest-to-treat form of the disease – and no more than 80 per cent for
other genotypes.

A step forward came from 2011 with the new so-called protease inhibitors
from  Merck, Vertex Pharmaceuticals and, more recently, Janssen, part of
Johnson & Johnson. These drugs, taken in combination with ribavirin and
interferon, nudged cure rates up significantly but the nasty side effects

The big breakthrough came in December with the US regulatory approval of
Sovaldi. The outcome was treatment time down to as little as 12 weeks with
success rates of above 90 per cent – even for those with genotype one.
Sovaldi, also known as sofosbuvir, is the first of a generation of
hepatitis C drugs called nucleotide analogue inhibitors, or “nukes”.

Gilead’s medicine still leaves room for improvement, however, because many
patients must still take it together with interferon. The race is on to
develop the first “nuke” that eliminates the need for injections and older
drugs altogether.

Analysts say Gilead remains in the lead, with the US Food and Drug
Administration expected to rule by October on its application for a
once-a-day, all-oral pill combining Sovaldi with another new medicine
called ledipasvir.

Others are scrambling to catch-up. AbbVie, for example, filed in April for
FDA approval of an interferon-free combination, including an experimental
“nuke” that cured more than 90 per cent of patients in trials. Merck and
Bristol-Myers Squibb have revealed some strong trial data this year.

Many doctors, meanwhile, have ditched interferon by prescribing Sovaldi
with Janssen’s Olysio protease inhibitor, even though the combination is
not officially approved by the FDA.

“If you have to have Hepatitis C, now is the time to have it,” says Douglas
Dieterich, a liver specialist at the Icahn School of Medicine at Mount
Sinai Hospital in New York.

“We have these marvellous drugs we can treat you with right now, without
side effects,” he adds. “And this time next year, we’ll have another round
of drugs available.”

The revolution in hepatitis C drugs has not been without setbacks and
controversy. In addition to the political furore over pricing
Sovaldi is the subject of several patent disputes. AbbVie and Merck are
among those to have challenged Gilead’s rights to some of the intellectual
property behind the drug.

Safety has been a concern. Bristol-Myers Squibb wrote off $1.8bn in
acquisition and development costs after a patient died and others were
admitted to hospital during trials of a nuke it was developing in 2012,
leading to the drug being abandoned. Idenix, Vertex and Achillion have been
slowed down by worries over toxicity.

Analysts say it is still uncertain which company will emerge with the most
effective and safest drug cocktail. This explains why Merck was prepared to
take a gamble on Idenix to boost its range of combination options.

Progress in tackling hepatitis C is as welcome for drugmakers as it is for

After a long period of sluggish growth and productivity, Sovaldi’s success
has shown that the industry is capable of powerful financial returns when
it produces true innovation.

But Mark Purcell, analyst at Barclays, cautions that not everyone will be a
winner in an increasingly competitive market where “economic returns might
not meet increasingly high expectations.”

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