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Hep C drug deal frenzy can't be slowed by growing doubts
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fiercebiotech.com February 15, 2012 - 8:36am ET | By John Carroll
from Jules: There are so many protease inhibitors, NS5A inhibitors that look good, I'm not sure why Achillion's 1st gen in these 2 classes are so appealing although they might be to a couple of companies who don't have drugs in these clases. Achillion does have a nice looking 2nd gen NS5A. We don't know the impact of that in 3 years we expect 7 drugs to already be on the market. But each large pharma company have so many good looking drugs in later stages of development I don't know how many we need. But in 2.5 years the 4 drugs now in phase 3 or about to enter phase 3 are expected in hit the market, include 2 proteases from BI & Tibotec, Gilead's nucleotide 7977, BMS's NS5A and Novartis's cyclophillon inhibitor DEB025, in addition to the 2 proteases currently on the market. Right behind is the Roche protease & its nucleoside R7128 which is about the enter phase 3 as well I think. As well, Abbott has a potent protease ABT-450, 2 NNRTIs, and an NS%a in early development. Merck has a potent 2nd gen protease MK5172. After the phase 3 studies mentioned above are completed, This will make for 4 classes of drugs on the market, depending on drug interactions being worked out, we are uncertain today what the affect of all these in 3 years drugs being on the market. With only 20% of HCV-infected already having been diagnosed as of today, the size of the market in 2-3 years will depend on how many HCV-infected are diagnosed. With estimations ranging from 4 million to as high as 8 million there is a large undiagnosed potential market out there just in the USA, with an estimated 170 million globally HCV-infected with large numbers in China, India, Afganistan, Pakistan, Asia, Africa and Latin countries as well. In addition just a little further back behind these drugs mentioned above in late stage development there is a bunch in earlier stage development that look very potent including the BMS new nucleotide INH189, Alios/Vertex 2 nucleotides, a bunch of NS5A inhibitors and a bunch of NNRTIs.
At the BIO CEO & Investor Conference in New York yesterday, Achillion CEO Michael Kishbauch wrapped up his remarks on the biotech's hepatitis C programs by making it clear that he was angling for a clean buyout for a premium that would "put a silly grin on all our faces." A merger of equals, he made clear, was not his first choice. And he is actively in pursuit of a deal.
Kishbauch has made no secret of his delight that Achillion is positioned at one of the busiest intersections in the R&D world. Captivated by the megablockbuster prospects of a next-gen oral therapy that can quell the hep C virus without the use of interferon injections, which trigger a hornet's nest of adverse effects for many patients, investors have been bidding up the value of Achillion's stock as well as Idenix, the two independent biotechs which are furthest down the pipeline after the big acquisitions of Pharmasset and Inhibitex.
Kichbauch's theory, widely held in the industry, is that a few key cocktail treatments that can quickly knock down the virus and keep it in check will relatively soon be able to divvy up a $20 billion marketplace. And he believes Achillion holds the ticket for any company looking for the inside track on that drug race.
Bloomberg isn't letting anyone forget, either. In the latest iteration of the spotlight now trained on hepatitis C, the business news service once again stirs the pot of takeover speculation, quoting Raghuram Selvaraju, an analyst with Morgan Joseph TriArtisan, as a believer in the common view that buyouts for Achillion and Idenix are inevitable.
"I don't think either of these companies will remain independent very long," Selvaraju said in a telephone interview. "I think we'll see both of them out of there by the end of the year."
Looking for further proof? Shares of BioCryst spiked 17% this morning on its release touting positive preclinical results for BCX5191, a hepatitis C drug that supposedly has rung all the key bells: Signs of potent pan-genotype antiviral activity in its in vitro and in vivo work.
Normally, preclinical results don't warrant much attention in the biotech world. But that was before Pharmasset was acquired for close to $11 billion. The overheated response, though, is earning some frowns in the Big Pharma world. Moncef Slaoui, GlaxoSmithKline's R&D chief, has now joined Sanofi's Chris Viehbacher in voicing doubts about the sums being paid for risky experimental programs. Time will tell whether the hep C buyout frenzy has already peaked, or whether the speculators can still cash in.
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