AbbVie's hep C hopeful aces PhIII and sets off an arms race with Gilead

AbbVie ($ABBV) has wrapped up its late-stage studies of a promising interferon-free hepatitis C cocktail, setting the stage for near-term FDA application and a showdown with rival Gilead Sciences ($GILD).

Across 6 Phase III studies in more than 2,300 patients with the tough-to-treat genotype 1 hep C, AbbVie's three-drug combo therapy clocked impressive 12-week cure rates, notching a 99% sustained virologic response mark in some populations. Now AbbVie is primed to file an FDA application in the second quarter, expecting to win approval and launch its breakthrough-designated drug by year's end, the company said.

Meanwhile, Gilead is cooking up a cocktail therapy of its own, planning to submit an FDA application for a fixed-dose combination of the recently approved Sovaldi with the NS5A inhibitor ledipasvir this quarter. Like AbbVie, Gilead has secured a breakthrough designation for its combo therapy.

And thus begins a race to cash in on the promise of multidrug cocktails for hep C, promising to forever rid patients of the need for painful interferon injections. Gilead's Sovaldi leads the pack, with sales expected to top out at $7 billion a year once the company can roll out its fixed-dose combo. AbbVie's three-drug regimen is expected to bring in about $3 billion at its peak, but the prospect of an eventual price war could shift the balance of power once the two get a chance to contend.

AbbVie's candidate is a fixed-dose combination of three antiviral agents: ABT-267, ABT-333 and ABT-450/ritonavir, which was developed alongside partner Enanta Pharmaceuticals ($ENTA). And while the cocktail's overlapping mechanisms of action are exactly what disrupt hep C's replication process, the drug requires patients to handle multiple pills each day, possibly putting it at a disadvantage on the market.

While AbbVie expects to launch the drug this year, the company decided not to bake any hep C revenues into its 2014 sales guidance, which it set at $19 billion.

Enanta's shares jumped more than 15% to around $37.25 on the announcement, while AbbVie ticked up 3% to about $49.75 by midmorning.

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