Abbott Hepatitis C Therapy Works After Other Drugs Fail
Abbott Laboratories (ABT)’ experimental hepatitis C treatment cured almost half of patients who couldn’t eliminate the virus with therapies now on the market, according to a study that boosted the company’s shares.
The Abbott-funded research found that eight of 17 patients who didn’t improve on standard-of-care treatments had no detectible virus levels after three months on the therapy, which combines two products, the Abbott Park, Illinois-based company said in a statement. Abbott rose less than 1 percent to $61.46 at 4 p.m. New York time, the highest closing price since at least 1980, according data compiled by Bloomberg.
Together with positive results for patients who hadn’t been treated before, the data shows Abbott has a strong hepatitis C pipeline that may diversify the company’s drug sales, said Glenn Novarro, an analyst with RBC Capital Markets in New York.
“It’s competitive, it’s compelling, and it indicates they’ve got a real program,” Novarro said in a telephone interview. “For Abbott, this is great news.”
Abbott, Bristol-Myers Squibb Co. (BMY), Gilead Sciences Inc. (GILD), Vertex Pharmaceuticals Inc. and Merck & Co. are working on hepatitis cures that don’t require the use of interferon, an injection tied to flu-like side effects. Among Abbott’s competitors, Gilead fell 1.9 percent to $47.19 and Bristol dropped less than 1 percent to $33.70.
“Today’s news places additional pressure on Gilead and Bristol-Myers,” Tony Butler, an analyst with Barclays Capital Inc., said in a note to clients. Butler said Abbott’s hepatitis C drugs could be worth as much as $2 billion a year if they’re approved by regulators.
The Abbott data is good enough to get U.S. approval if supported in larger trials, said Scott Brun, vice president of infectious disease development.
“We’re comfortable that these are the types of results that when confirmed in a larger phase II program would allow us to move forward,” Brun said by telephone.
Abbott’s study examined 50 hepatitis C patients, who were given a combination of the antiviral drugs ABT-450, ABT-333, ritonavir and ribavirin. The 17 who were treated before showed a 47 percent cure rate, while those who had never been treated had a rate of between 93 and 95 percent, Abbott said.
Abbott is in the process of splitting into a diversified products company led by its medical device division, and a drug company, to be called AbbVie. The drugmaker is seeking products to replace its top-seller Humira, a $7.9 billion-a-year injection used to treat rheumatoid arthritis.
Valuing Hepatitis Pipeline
“Investors aren’t assigning much valuation to its pharmaceutical business because it’s so Humira-dominated,” RBC’s Novarro said. “After today, they have to start thinking about valuing the hepatitis platform.”
The study is part of a research program in the second of three phases of clinical trials before U.S. regulators at the Food and Drug Administration rule on the drug.
Abbott previewed results from one of the studies for investors in October, showing that it could cure around 90 percent of patients who had never been treated. Abbott’s therapy relies on a combination of three or four drugs, while competitors use two or three. Novarro said the number of drugs in the therapy won’t matter if the results are good enough.
The release of Abbott’s preliminary data last year caused Pharmasset, now owned by Gilead, to fall 8.6 percent in a day. Abbott has said it hopes to have a treatment on the market by 2015.
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