Zacks analysis of the current HCV market and speculation of what's to come. Interesting read especially if you're new to the HCV drug development space.
Spotlight On Hepatitis-C Market
By Zacks Investment Research on December 6, 2011
Is the hepatitis-C market the next Mecca for the pharma/biotech sector? It seems so if we go by the flurry of activity and heightened interest in this market in the past few quarters. The hepatitis-C virus (HCV) market seems to have caught the eye of several pharma/biotech companies – as evident by the deals being signed for the development of drugs for the treatment of HCV.
We are talking about the recent announcements made by big players like Johnson & Johnson (NYSE:JNJ), Bristol-Myers Squibb (NYSE:BMY) and Gilead Sciences, Inc. (NASDAQ:GILD). All three companies have made it clear they want a piece of the HCV market pie.
Johnson & Johnson’s Tibotec Pharmaceuticals and Bristol-Myers Squibb recently announced that they have decided to join forces for the development of Bristol-Myers’ daclatasvir (BMS-790052) in combination with Tibotec’s TMC435, for the treatment of chronic HCV. What the partners are aiming to do is create an oral once-daily interferon-free cocktail treatment for HCV patients.
Bristol-Myers and Johnson & Johnson’s announcement comes on the heels of Gilead’s announcement regarding its intention to buy Pharmasset, Inc. (NASDAQ:VRUS), a company focused on developing HCV treatments. We think the main attraction for Gilead in this $11 billion deal is Pharmasset’s HCV pipeline. Lead candidate PSI-7977 is currently in two phase III studies, with a third phase III study scheduled to commence in the first half of 2012. Successful development could lead to US approval in 2014 thereby making Gilead a front-runner in the oral once-daily interferon-free cocktail treatment HCV market.
We note that both TMC435 and daclatasvir are being evaluated separately in combination with Pharmasset’s PSI-7977.
The Allure of the HCV Market
HCV is a hot development area which has come into the limelight with the launch of two new treatments – Vertex Pharmaceuticals’ (NASDAQ:VRTX) Incivek and Merck’s (NYSE:MRK) Victrelis. Both drugs gained approval in the US earlier this year. Incivek, which was launched in May 2011, posted a whopping $419.6 million in sales in the first full quarter of its launch.
So, with two new recently launched products in the market, why is the HCV market considered so attractive? Firstly, it is estimated that about 170 million people suffer from HCV infection across the world. However, the treated population is much lower. In major markets like the US, EU, Japan, Australia, Turkey, Canada, etc. only 200,000 HCV patients out of a total of more than 12 million are estimated to receive treatment each year. This means a huge number of HCV patients go untreated, leaving the field open for new treatments.
Secondly, the current standard of care comes with several side effects which make it difficult for patients to remain on treatment. A 48-week course of both peg-interferon (peg-INF – weekly injections) and ribavirin (RBV – oral drug), are the standard treatment for genotype 1 HCV infection. However, this treatment regimen is associated with significant side-effects like fatigue, flu-like symptoms, rash, depression and anemia.
With a large number of HCV patients failing to achieve a sustained viral response (SVR) on the current standard of care, there are several patients who would be open to treatment with new and potentially more effective therapies.
These factors have made the HCV market an attractive commercial opportunity for pharma and biotech companies. Victrelis and Incivek are examples of the changing treatment regimen in the HCV market. Both are protease inhibitors which when added to the standard of care reduce the treatment period and also improve the treatment outcome. However, both need to be administered with peg-IFN and RBV – this leaves the path open for the introduction of treatments with fewer side effects.
Cocktail Therapy – The Next Big Thing in HCV
Companies like Johnson & Johnson and Gilead are trying to develop the next crop of drugs, which are expected to change the treatment paradigm for HCV patients by providing them with all-oral treatment regimens. The aim is to develop a treatment which does not require the administration of interferon, thereby doing away with a whole range of side effects. The treatment duration will also be shorter.
Treatments being developed include HCV polymerase inhibitors and HCV NS5A inhibitors. The future HCV market will most likely consist of cocktail treatment regimens developed by combining different oral treatments.
Vertex Pharma has also recognized the need to continually evolve the HCV treatment pattern and is developing an all-oral combination of VX-222 (a polymerase inhibitor) and Incivek without peg-IFN.
Who Will Win the Rat Race?
With several companies pursuing cocktail therapies for HCV, it will be interesting to see which of these companies will be the first to hit the market with a new treatment option. Currently, it looks like Gilead might be the front-runner assuming the Pharmasset acquisition goes through.
Showing posts with label hepatitis C market. Show all posts
Showing posts with label hepatitis C market. Show all posts
Tuesday, December 6, 2011
Wednesday, November 30, 2011
The Motley Fool's Brian Orelli waxes on "HCV Warehousing 2.0"...
I don't know why, but I love reading what analysts are thinking. The touchstone is always 'hyperbole', either bear or bullish. Unfortunately, investment-related articles like this may impair what would be otherwise logical, pragmatic thinking by HCV patients and treatment providers. Orelli happens to be right about an upcoming new wave of warehousing patients for more effective...and hopefully more tolerable...medications to treat Hepatitis C, and for all the wrong reasons. Don't succumb to hype. Outside of a patient being contraindicated for treatment or some other serious life issue, there's no reason to wait 2 1/2 - 3 years for new treatments that might/might not actually make it to market. The HCV drug development landscape is polluted with once-promising drugs that never made it out of Phase II trials. What we know about HCV is that the progression of disease can be slow, but it's also non-linear. Because a patient with HCV has a fibrosis score of '0' today, doesn't mean the patient won't advance to a '3' by 2014. We also know that the more advanced the disease, the less effective the medications are likely to be. The best bet is to get treated, and the earlier the better
The Biggest Fear for Hep C Investors
By Brian Orelli
November 28, 2011
There's no doubt about it -- the hepatitis C market is huge. There are 3.2 million people in the U.S. alone infected with the virus, according to the Centers for Disease Control and Prevention.
But one of the reasons for the large number of patients could be the downfall for hepatitis C drugmakers.
Hepatitis C is a chronic disease that's slow to progress. It eventually causes liver problems including scarring of the liver or liver cancer, but that's often years after the initial infection. In fact, many of those 3.2 million Americans don't even know they're infected.
The slow progression of the disease allowed doctors to put off treatment, called warehousing, and wait for Merck's Victrelis and Vertex Pharmaceuticals' Incivek to work their way through the drug-development process. The previous generation of treatment options -- Merck's PegIntron and Roche's Pegasys -- cure only around half of the patients and had nasty side effects that weren't all that appealing, considering the flip-of-a-coin chance at a cure.
Warehousing 2.0
Clearly, many doctors and their patients have decided that they've waited enough. Incivek is off to a blustering start, registering $420 million in sales during its first full quarter on the market.
But Incivek isn't perfect. It still requires patients to take PegIntron or Pegasys, albeit for a shorter duration of time than it was used when the drugs were taken on their own. Multiple companies are going after an interferon-free regimen that would be taken orally.
Pharmasset, which is being bought by Gilead Sciences, has a hepatitis C drug candidate, PSI-7977, which looks good so far as an interferon-free treatment. Gilead has other hepatitis C drug candidates it's developing that could be used in combination with PSI-7977 if it doesn't work on its own. And there are plenty of other drugmakers, including Achillion (Nasdaq: ACHN ) , Inhibitex (Nasdaq: INHX ) , Vertex, Merck, Johnson & Johnson, and Bristol-Myers Squibb (NYSE: BMY ) , developing other hepatitis C drugs that they hope can be part of an interferon-free cocktail.
It seems entirely possible that doctors will continue warehousing all but the most-progressed patients until there's an interferon-free treatment regimen that works as well as or better than the current standard of care. If that occurs, the peak sales of Incivek would be substantially diminished.
And then ...
If patients are going to wait for all-oral interferon-free regimens, why not wait until the drugs become generic and save some money? Granted, it'll take a while to get to that stage; patients being seen by doctors right now aren't likely to be thinking that way, but it seems entirely possible that the effective patent life of hepatitis C drugs could be cut short by a few years as patients considering treatment within a few years of patent expiration might just elect to wait.
And of course, at some point, the hepatitis C market will begin to shrink. Unlike HIV drugs that aren't really a cure, hepatitis C drugs rid the patients of the virus, so as more patients are cured, the number of newly infected individuals should drop. How far in the future the drop begins will be dictated by how quickly patients get on medication, so the faster the ramp-up in sales, the sooner sales will drop off.
Far enough in the future?
That's what every hepatitis C investor has to ask: Can you capture the value now and get out before things eventually blow up?
At this point, investors seem to be ignoring the future -- Pharmasset is up more than 500% over the last year -- but that seems a little risky for long-term investors. If you're going to invest in the space for any reasonable length of time, consider a company that has its hand in more than one market. Vertex, for instance, is developing drugs for cystic fibrosis, and it's on sale.
The Biggest Fear for Hep C Investors
By Brian Orelli
November 28, 2011
There's no doubt about it -- the hepatitis C market is huge. There are 3.2 million people in the U.S. alone infected with the virus, according to the Centers for Disease Control and Prevention.
But one of the reasons for the large number of patients could be the downfall for hepatitis C drugmakers.
Hepatitis C is a chronic disease that's slow to progress. It eventually causes liver problems including scarring of the liver or liver cancer, but that's often years after the initial infection. In fact, many of those 3.2 million Americans don't even know they're infected.
The slow progression of the disease allowed doctors to put off treatment, called warehousing, and wait for Merck's Victrelis and Vertex Pharmaceuticals' Incivek to work their way through the drug-development process. The previous generation of treatment options -- Merck's PegIntron and Roche's Pegasys -- cure only around half of the patients and had nasty side effects that weren't all that appealing, considering the flip-of-a-coin chance at a cure.
Warehousing 2.0
Clearly, many doctors and their patients have decided that they've waited enough. Incivek is off to a blustering start, registering $420 million in sales during its first full quarter on the market.
But Incivek isn't perfect. It still requires patients to take PegIntron or Pegasys, albeit for a shorter duration of time than it was used when the drugs were taken on their own. Multiple companies are going after an interferon-free regimen that would be taken orally.
Pharmasset, which is being bought by Gilead Sciences, has a hepatitis C drug candidate, PSI-7977, which looks good so far as an interferon-free treatment. Gilead has other hepatitis C drug candidates it's developing that could be used in combination with PSI-7977 if it doesn't work on its own. And there are plenty of other drugmakers, including Achillion (Nasdaq: ACHN ) , Inhibitex (Nasdaq: INHX ) , Vertex, Merck, Johnson & Johnson, and Bristol-Myers Squibb (NYSE: BMY ) , developing other hepatitis C drugs that they hope can be part of an interferon-free cocktail.
It seems entirely possible that doctors will continue warehousing all but the most-progressed patients until there's an interferon-free treatment regimen that works as well as or better than the current standard of care. If that occurs, the peak sales of Incivek would be substantially diminished.
And then ...
If patients are going to wait for all-oral interferon-free regimens, why not wait until the drugs become generic and save some money? Granted, it'll take a while to get to that stage; patients being seen by doctors right now aren't likely to be thinking that way, but it seems entirely possible that the effective patent life of hepatitis C drugs could be cut short by a few years as patients considering treatment within a few years of patent expiration might just elect to wait.
And of course, at some point, the hepatitis C market will begin to shrink. Unlike HIV drugs that aren't really a cure, hepatitis C drugs rid the patients of the virus, so as more patients are cured, the number of newly infected individuals should drop. How far in the future the drop begins will be dictated by how quickly patients get on medication, so the faster the ramp-up in sales, the sooner sales will drop off.
Far enough in the future?
That's what every hepatitis C investor has to ask: Can you capture the value now and get out before things eventually blow up?
At this point, investors seem to be ignoring the future -- Pharmasset is up more than 500% over the last year -- but that seems a little risky for long-term investors. If you're going to invest in the space for any reasonable length of time, consider a company that has its hand in more than one market. Vertex, for instance, is developing drugs for cystic fibrosis, and it's on sale.
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