Gilead Sciences Inc. (GILD) may have an edge on rivals developing new hepatitis C drugs for a potential $20 billion market after a study showed its experimental drugs cleared the liver disease virus in 100 percent of patients.
The Foster City, California-based company rose to the highest price in its 20 years of trading yesterday on research presented at the meeting of the American Association for the Study of Liver Diseases in Boston. Results showed that combining Gilead’s experimental drugs with a standard medicine cleared the hepatitis C virus in all 25 patients in a 12-week trial.
Abbott Laboratories (ABT) and Bristol-Myers Squibb Co. (BMY) also featured positive results on their hepatitis C drugs at the medical meeting. Still, Gilead’s data “sets a nearly impossible rate for competitors to exceed,” Bret Holley, an analyst with Guggenheim Partners, wrote yesterday in a research note.
“Gilead will likely be the first to market with a simple and efficacious one pill, once-daily regimen,” Michael Yee, an RBC Capital Markets analyst in San Francisco, said in a note. “All this adds up so far to supporting our thesis that Gilead has a $5 billion plus drug.”
Abbott, based in Abbott Park, Illinois, countered with data showing a combination of its therapies rid 87 percent of 79 patients of the virus after 12 weeks of therapy, or 97 percent when given ribavirin. Merck & Co. (MRK), Vertex Pharmaceuticals Inc. (VRTX) and Achillion Pharmaceuticals Inc. (ACHN) are among other drugmakers developing medicines for the liver disease.
Bristol-Myers reported results at the meeting showing that combining three of its experimental medicines -- daclatasvir, asunaprevir and BMS-791325 -- cleared the hepatitis C virus in 94 percent of 16 patients in a trial. The company plans to take the therapy into final-stage trials in 2014.
Hepatitis C affects as many as 170 million people worldwide, according to the World Health Organization. The liver disease is currently treated for as long as a year with injection drugs including interferon, which can be unpleasant to take because of the flu-like symptoms that accompany it. The new drug regimens in testing are designed to be taken as pills, with shorter treatment durations and fewer side effects.
Gilead sank 1.7 percent to $72.69 at the close of trading in New York, after yesterday reaching its highest closing price since the company first offered shares to the public in 1992. Abbott fell less than 1 percent to $64.68. Bristol-Myers declined less than 1 percent to $31.87.
Abbott’s drug data measured patients 12 weeks after the end of treatment. Gilead’s studies looked at patients four weeks after its therapy ended.
Abbott’s “strong results” keep it competitive with Gilead and position the company to become one of first drugmakers to bring an all-oral hepatitis C treatment to the market, Larry Biegelsen, an analyst with Wells Fargo in New York wrote in a note to clients.
Abbott’s clinical trial included more patients and was conducted in more locations than Gilead’s, making it “slightly lower risk in phase 3,” or the final of three phases of trials typically required for U.S. regulatory approval, Biegelsen said. He said, though, Gilead’s regimen would require three pills a day, versus six for Abbott’s.
The combination regimens from Abbott and Bristol-Myers didn’t include a class of drugs called nucleotide polymerase inhibitors, which have been thought to be a key part of therapy for hepatitis C. The quest for “nucs” led to Gilead’s $10.8 billion purchase of Pharmasset Inc., giving it GS-7977, known as sofosbuvir.
Bristol-Myers also acquired a nucleotide, spending $2.5 billion for Inhibitex Inc. in January. By August, the drugmaker had abandoned the medicine after one patient died and others were hospitalized while taking the drug in a study.
Data presented at the liver meeting suggest regimens not containing nucs may be viable.
“The nuc may not be as sacrosanct as we thought it may have been,” Doug Manion, head of neuroscience and virology research at Bristol-Myers, said in an interview. “It was a big ’a-ha!’ moment with our internal triple” combination.
Achillion, based in New Haven, Connecticut, gained less than 1 percent to $7.92 and Vertex, based in Cambridge, Massachusetts, rose less than 1 percent to $44.10. Idenix Pharmaceuticals Inc. (IDIX), which is developing the experimental hepatitis C drug, IDX184, rose 7.3 percent to $4.99.
Vertex’s Incivek was approved last year, days after U.S. regulators approved a drug from Whitehouse Station, New Jersey- based Merck. They were the first medicines for hepatitis C to win Food and Drug Administration approval in almost a decade.
“A few years ago, no one thought you could develop a regimen without interferon,” Milind Deshpande, Achillion’s chief scientific officer, said yesterday in an interview at AASLD meeting.
Now, hepatitis C could become the seventh disease in human history to be eradicated, joining others like small pox, said Bristol-Myers’s Manion.
“It’s a whole different paradigm,” he said.
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