Hepatitis C: Drugmakers jockey to create cocktail...

Bloomberg News article published in the San Francisco Chronicle on 2/15/2012 on the recent M&As and speculation on the M&As to come. Very nice overview if you're new to the HCV drug development space and have a hankerin' to learn who the big players are.


Hepatitis C: Drugmakers jockey to create cocktail


Bloomberg News
Wednesday, February 15, 2012

A developing medical theory that hepatitis C can be overcome with the same type of drug cocktails that tamed HIV is shaking up the pharmaceutical industry.

Companies are trying to anticipate which medicines might work best together and planning their acquisition strategies accordingly. Because only a few hepatitis C drugs are approved, and others in testing may not pan out, "we don't know what the winning formula will be," said Ben Weintraub, an analyst at Wolters Kluwer InThought. To raise the odds, "companies are doing M&A (mergers and aquisitions) and starting new trials on almost a daily basis."

With more than two dozen drugs in development, doctors predict a new age of therapy for a blood-borne virus carried by 170 million people that now has few treatment options. The promise of a potential $20 billion market has already spurred three deals in the past year - the latest being Bristol-Myers Squibb's $2.5 billion purchase this month of Inhibitex.
Next in line may be Idenix Pharmaceuticals and Achillion Pharmaceuticals, said Raghuram Selvaraju, an analyst with Morgan Joseph TriArtisan.

"I don't think either of these companies will remain independent very long," Selvaraju said. "I think we'll see both of them out of there by the end of the year."

Increased urgency
Achillion is testing a so-called protease inhibitor, while Idenix is developing a nucleotide polymerase inhibitor. The two medicines, which work differently to block the virus' ability to replicate in the body, are in the second of three stages of testing normally required for U.S. approval.

By combining several classes of these new hepatitis C drugs, doctors may be able to limit the virus' ability to infect, mimicking the strategy that a decade earlier helped turn HIV from a killer disease to a controlled one, said Charles Chiu, an infectious disease doctor at UCSF.

With the success of treatments that "work on the virus itself, there's an increased urgency now to explore drugs in many different stages of the viral life cycle," Chui said.

Until last year's introduction of Victrelis from Merck and Incivek by Vertex Pharmaceuticals - two protease inhibitors - the standard treatment combined the antiviral drug ribavirin with interferon, an immune-boosting protein sold by Merck as PegIntron and by Roche as Pegasys.

That treatment relied on interferon shots given weekly for a year, and it cured only about half of patients with the most common U.S. strain, called genotype 1. The drugs also caused side effects that include fatigue and flu-like symptoms.

Across different types
The new protease inhibitors stop an enzyme that splits proteins and allows them to replicate. While they've been shown to cure more patients in less time than previous therapies, with fewer side effects, they still need to be combined with interferon shots.

Scientists see promise in the other class being developed, the nucleotide polymerase inhibitors, which bind to a different part of the virus than the protease inhibitors. These drugs are pan-genotypic - meaning they are effective across the different types of hepatitis C. They could become the backbone for an interferon-free combination.

Mixing the classes together may be even more effective in beating the disease, which is blamed for more than 350,000 deaths a year worldwide.

"We waited 15 years for protease inhibitors, and a year later we could have a new class of drugs, nucleotides, that surpass them," said Steve Worland, former CEO of Anadys Pharmaceuticals, an experimental hepatitis C drugmaker acquired by Roche in November for about $230 million. "That kind of dramatic change I have never seen before."

Drugmakers want to own a piece of the eventual cocktail that will work best among patients worldwide. They've been working in the lab to create their own drugs, as well as scouting other companies with an eye toward buying promising candidates.

Takeover targets
Foster City's Gilead Sciences paid $10.8 billion for Pharmasset last month to use its experimental nucleotide drug, PSI-7977, as a cornerstone to a new hepatitis C combination - one that it expects other drugmakers will want to use - opening the door to added licensing revenue.

Selvaraju said: "7977 is going to be the driver of an all-oral regimen, and all of these other drugs are going to be layered on top of it."

Rivals have the same idea as they hunt for potential targets. That's why Achillion and Idenix are being closely watched as potential takeover targets, Selvaraju said. Abbott Laboratories and Roche are potential bidders, he said. Merck, Bristol-Myers and Johnson & Johnson are also in pursuit of the new regimens.

The potential market size for these therapies is at least $20 billion, according to Michael Kishbauch, CEO of Achillion.

Competition grows
Gilead increased its offer to acquire Pharmasset four times last year to $137 per share from $100 per share, after a clinical trial showed PSI-7977 cured all patients in a study.

"The opportunity to be able to cure people with three months of therapy is one of the most amazing breakthroughs we can bring to health care - and there's a lot of competition," Gilead CEO John Martin said last month.

Idenix is in talks to find a partner to create a combination hepatitis C treatment, said Ron Renaud, the company's CEO. While declining to comment on whether the company may be acquired, he said interest in hepatitis C drugs picked up last year during a liver disease conference.

"There is a tremendous market opportunity here that people want to take advantage of, and there's an intense race that's under way to get to that point," Renaud said.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/02/15/BUDC1N7L0U.DTL
his article appeared on page D - 1 of the San Francisco Chronicle