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3rd UPDATE: Bristol-Myers Halts Hepatitis C Study on Safety Issue
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-Patient in hepatitis C drug study had heart failure
-Bristol-Myers says cause and relation to drug being studied aren't known
-Drug was focus of Bristol's $2.5 billion Inhibitex acquisition
WSJ By Peter Loftus and Saabira Chaudhuri
Aug 2 2012
Bristol-Myers Squibb Co. (BMY) has suspended its study of a drug intended to treat the liver disease hepatitis C after a patient suffered heart failure, which the company called a "serious safety issue."
The move raises questions about the experimental drug's potential and the $2.5 billion price tag Bristol paid earlier this year to buy the company that developed it. The suspension is considered a significant setback for the drug-maker-already grappling with weak sales of its Plavix anti-clotting drug that lost patent protection in May-in the race to develop new hepatitis C treatments.
Bristol-Myers shares tumbled 8.1% to $32.70 in recent trading Thursday. ISI Group analyst Mark Schoenebaum said investors should assume that the drug "is dead," while Bernstein analyst Tim Anderson reduced his forecast for Bristol-Myers' 2016 per-share earnings by nearly 10%.
The setback doesn't leave Bristol-Myers empty-handed in hepatitis C drug research because it is developing other hepatitis C drugs. But those other drugs might not be enough to comprise a safe and effective all-oral regimen, which could force Bristol to try to partner with another company developing hepatitis C drugs.
Late Wednesday, Bristol-Myers said it voluntarily suspended an ongoing Phase 2 study of BMS-986094, which was formerly known as INX-189, a nucleotide polymerase inhibitor, or "nuke." In a statement, the company said "the cause of the safety issue and any potential relationship to study drug are unknown at this time."
A patient who had received a 200-milligram dose of the Bristol drug experienced heart failure, said Bristol-Myers spokeswoman Sonia Choi. The company can't rule out the possibility of safety issues with patients who received other doses of the drug.
The drug company is currently assessing all patients in the study and following an evaluation of the patient data, will decide what to do. Assessments will include full physical exams and imaging tests to measure heart health, Ms. Choi said. Any clinically significant abnormalities detected will be reviewed by a consulting cardiologist as soon as possible.
The safety issue could hurt Bristol-Myers in its race with Gilead Sciences Inc. (GILD), Abbott Laboratories (ABT) and others to bring the first all-oral hepatitis C regimen to market, hoping to tap what is expected to be a multibillion-dollar market for such a therapy.
An all-oral regimen for hepatitis C would eliminate an injectable drug used in the current standard treatment, interferon, which can be difficult for patients to tolerate.
Gilead shares surged 8.5% to $58.16 in recent trade on Bristol's setback.
To strengthen its hepatitis C position, Bristol-Myers in February shelled out $2.5 billion to buy Inhibitex Inc. at a whopping 163% premium. Bristol was lured primarily by Inhibitex's nuke for hepatitis C, though it did acquire other potential treatments for infectious disease in the deal.
Treatments for hepatitis C are considered lucrative because the disease is prevalent in large sections of the global population. The virus, which can be transmitted sexually or through use of shared needles and at tattoo parlors, affects some 170 million people world-wide.
The "nuke" class of drugs is seen as a cornerstone of potential all-oral regimens for hepatitis C. Gilead paid $11.1 billion to acquire Pharmasset earlier this year to get its hands on Pharmasset's nuke, now known as GS-7977. Gilead has begun Phase 3, or late-stage, clinical trials of GS-7977 and hopes to submit it for regulatory approval by mid-2013.
Some analysts believe Gilead has the lead in the race for the all-oral regimen, which is likely to be bolstered by Bristol-Myers' setback.
Another Bristol candidate for hepatitis C is daclatasvir, which belongs to a class of drugs known as NS5A replication complex inhibitors.
Earlier this year, Bristol and Gilead said a regimen that included GS-7977 and daclatasvir had positive results in mid-stage testing. However, Gilead has its own NS5A in development, GS-5885, and the company doesn't appear to be interested in partnering with Bristol to bring a combination to market.
Gilead spokeswoman Cara Miller said data from clinical studies of GS-7977 thus far show the drug is "well tolerated and has exhibited a favorable safety profile."
Gilead hopes to begin a late-stage clinical trial later this year combining GS-7977 and GS-5885 in a single pill, pending results of an earlier-stage study of the combination.
Abbott Labs is taking a different approach, developing a potential all-oral regimen without a nuke. Abbott has said it could bring an all-oral regimen to market in 2015. Other companies developing new hepatitis C drugs include Vertex Pharmaceuticals Inc. (VRTX) and Idenix Pharmaceuticals Inc. (IDIX).
Vertex shares rose 1.9% to $50.11 in afternoon trade, while Idenix was unchanged at $8.32 on more than seven times its recent daily volume.
Last week, Bristol-Myers reported a 28% profit decline on a double-digit drop in sales as Plavix's second-quarter sales tumbled 60% from a year earlier. Sales also were pressured by the March patent expiration for blood-pressure drugs Avapro and Avalide.
While Bristol-Myers has had a run of R&D victories in recent years, it has been hit by some setbacks lately. The Food and Drug Administration earlier this year rejected a proposed diabetes drug and recently declined to approve a proposed anti-clotting drug, asking for more information.
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