Regulus shares spike on a high success rate for RG-101 hep C combos

Can Regulus still make a splash in the increasingly crowded hepatitis C drug market? The biotech says yes, backing up its case for RG-101 with interim Phase II data that showed its injection pushed a small group of patients to a 97% sustained virologic response rate after only four weeks of combination therapies using some of the top oral drugs now on the market.

Just a year ago, Regulus ($RGLS) was having to explain some weak results from an early-stage study of the hep C treatment. The therapy targets microRNA-122, which the virus uses to replicate. But this morning its shares shot up 22% on the news that the vast majority of 38 patients in the Phase II trial--about half of the total--registered a sustained virologic response through 8 weeks of follow-up after four weeks of combination therapies that used Harvoni (Gilead), Olysio (J&J) and Daklinza (Bristol-Myers Squibb).

Hepatitis C has effectively been cured by Gilead's new combos, but there's been plenty of competition as biopharma companies scramble to gain an edge with new treatments that are even faster and better and cheaper than what's available now. Gilead ($GILD) stunned payers with its $84,000 price tag on Sovaldi, and competitors like AbbVie ($ABBV) have been lining up to compete on price, if not convenience. San Diego-based Regulus still clearly believes that the race to develop new drugs--which includes Merck's ($MRK) recent approval of its own combo--is far from over. And payers are likely to be eager to find new ways to reduce the need for expensive oral drugs by shortening treatment schedules.

"These sustained virologic responses demonstrate the potential ability of RG-101 to successfully reduce currently marketed oral treatment regimens to just four weeks, a major clinical breakthrough that the HCV field has not been able to achieve until today and I look forward to future results," said Dr. Eric Lawitz, a clinical professor of medicine at the University of Texas Health Science Center in San Antonio, in a statement. "In addition, I believe this novel approach might allow treating physicians to overcome compliance issues in a wide variety of patient populations."

Barclays' analyst Geoff Meacham recognizes the value of the strategy, but still wasn't all that impressed with Regulus' news today.

"Shorter treatment durations remain the last mile of innovation in hepatitis with four weeks commonly viewed as the 'Holy Grail,'" he notes. "That said, we don't see this as having significant read-through to Gilead or the broader hep C space yet, given that the regulatory hurdles remain very high, and the RG-101 regimen still requires four-week of DAA use (e.g., Harvoni). Indeed, based on those aspects we don't see the trade-offs in favor of a four-week regimen as that meaningfully improved."

Regulus still has a ways to go before it can get in front of regulators. And it's also adding new combo studies to the pipeline. RG-101 is also being combined with GlaxoSmithKline's ($GSK) GSK2878175, a non-nucleoside NS5B polymerase inhibitor, in treatment-naïve patients chronically infected with HCV genotypes 1 and 3. 

- here's the release

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