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Hep C pill race report 2012: Gilead, others rush toward pharma gold

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Vertex Pharmaceuticals ($VRTX) radically improved the treatment of hepatitis C with its protease inhibitor Incivek, which fast became a blockbuster success after the FDA stamped an approval on the drug in May 2011. Investors and physicians cheered, thousands of patients embraced the treatment, and Vertex's sales skyrocketed.

Temporarily. Early this month, Cambridge, MA-based Vertex reported financial results that showed a steep decline in sales of Incivek, down from $419.6 million in the third quarter of 2011 to $254.3 million in the same period this year.

Blame much of the 39% drop in sales of the drug on at least a couple of related factors. Firstly, Incivek is approved only for use with injected interferon, which causes a range of nasty and flulike side effects. Secondly, physicians and patients appear to be waiting for a new generation of oral antivirals that offer the promise of wiping out the virus relatively quickly without requiring interferon injections.

This wasn't news to Vertex. Along with a bevy of competitors, the pharma company has hurried to advance interferon-sparing treatments for a while. If the all-oral therapies now in development hit the market as expected within the next couple of years, sales of interferon-based treatments are in big trouble. Vertex knows this. Merck ($MRK), which markets the rival hep C drug Victrelis, knows this. Both companies are hustling to develop all-oral approaches to fighting the disease.

"Obviously, we're moving as fast as we possibly can," Dr. Robert Kauffman, Vertex's chief medical officer, said in an interview with FierceBiotech. He also noted: "The news is that the field is changing rapidly; all-oral regimens look to be on the horizon."

The evolution of hepatitis C treatment threatens to leave today's dominant companies with fossilized offerings. Vertex and Merck have the state-of-the-art approved drugs against the virus, but both companies are chasing after Gilead Sciences ($GILD), Abbott Laboratories ($ABT) and others with programs that could be the first to win market approval with pill-only options.  

There's no cozy position in the hep C race, however. The all-oral cocktails are largely unproven and in need of confirmation in fully baked pivotal studies, and that keeps the contest wide open for a number of contenders, Vertex included.

Oral hep C nucs: Virus assassins or toxic agents?

Bristol-Myers Squibb ($BMY) killed development of its once-promising nucleotide polymerase inhibitor in August after a patient who took the experimental compound, known as BMS-986094, died of heart failure. The death sounded the safety alerts at the FDA, which hit the brakes on studies of the "nuc" drug in August. And by the time Bristol put the kibosh on further development of the compound on Aug. 23, a total of 9 patients had been hospitalized, including the person who had died.

The "094" disaster was felt across the industry. The FDA quickly called for a hold on development of two hep C pills from Idenix Pharmaceuticals ($IDIX). The first, called IDX184, is in midstage development and was placed on partial clinical hold, and the second, IDX19368, is a preclinical compound from the same drug class. Both experimental pills share similarities with Bristol's doomed nuc.

Idenix has to prove that its clinical-stage drug isn't another toxic dud before further trials in patients can resume. Hopeful to resume testing of IDX184, Idenix made clear at the American Association for the Study of Liver Diseases annual meeting that there's been no evidence of severe heart side effects in patients on the pill.

Bristol managed to let its 094 program die while maintaining that the cause of the death and hospitalizations among patients who took the drug was uncertain. Nevertheless, toxicity concerns hang like a dark cloud over the enterprise of advancing new nucs against hepatitis C virus.

Idenix's and Bristol's woes have made news recently, but safety problems have plagued a number of previous oral compounds against the liver-damaging virus. NM-283, a nucleoside polymerase inhibitor from Idenix developed in partnership with Novartis ($NVS), fell from grace years ago after investigators found gastrointestinal side effects. Roche's ($RHHBY) polymerase inhibitor, R1626, was axed after doctors saw evidence of bone marrow suppression.

"Anytime we study a new 'nuc,' we're on alert for those kinds of side effects," said Dr. Paul Pockros, head of the division of gastroenterology/hepatology at the Scripps Clinic's Liver Disease Center, in an interview with FierceBiotech.

Pockros, who was involved in the ill-fated study of Bristol's 094, said that the death of the patient from heart failure has heightened concerns about potential cardiovascular side effects of nucs in hep C studies.

Hep C bigger than HIV

Intravenous drug use, dirty tattoo parlors, tainted blood transfusions and carriers infecting offspring are several of the many ways an estimated 170 million people around the world have contracted hepatitis C. In the U.S., estimates place the total number of cases at 4 million, making the disease far more prevalent than headline-grabbing HIV in the country.

The good news for hep C-infected patients: Current therapies offer viral cures, and others in development could wipe out the illness faster than today's drugs. The bad news: Most people with the chronic disease are unaware of their illness, according to the Centers for Disease Control and Prevention (CDC). Many of them are from the baby-boomer generation.

Hepatitis C damages liver tissue and results in scarring known as cirrhosis. Once a patient has cirrhosis, he's got a greater risk of developing liver cancer, liver failure and dying. In fact, the virus is responsible for driving up rates of liver cancer, liver transplants and liver failure.

It takes decades before the virus significantly damages the liver. With the disease killing higher numbers of aging boomers, the CDC made new guidelines this year for physicians to screen all their patients born between 1945 and 1965 for the virus. But the jury is out on how well the guidelines will be followed. 

For developers of hep C drugs, the HCV testing could benefit sales of meds against the disease. Yet unless a patient's hep C has made him sick, doctors might keep him on the sidelines in anticipation of the all-oral therapies hitting the market in 2014.

"If you already have cirrhosis, and you're scared that you may be decompensated and could develop cancer, you may want to take what's available," Dr. Guadalupe Garcia-Tsao, president of the American Association for the Study of Liver Diseases, told reporters last week in Boston. Otherwise, she said, hep C patients might want to wait for next-generation therapies.

A pharma gold rush

There are plenty of arms races in the pharma industry, with companies sprinting to advance rival therapies to market. Yet few move as quickly as the hep C race, and the lucrative market and clinical development dynamics are incentives to work fast.

"If you go away for a couple hours, things change in HCV," laughed Joseph Truitt, head of business development for Achillion Pharmaceuticals ($ACHN), a developer of three clinical-stage drugs against hep C. 

The hep C drug market saw explosive growth in 2011 with the introduction of Merck's ($MRK) and Vertex's ($VRTX) then newly approved protease inhibitors, which boosted sales in the category by about $1 billion last year to $2.6 billion, according to market research from GBI Research. With patients waiting for all-oral options, no such growth is in the offing for 2012.

The interferon-free cocktails could trigger tremendous growth in a few years, many say by 2015, when multiple all-oral regimens could be on the market. The market could grow to nearly $15 billion by 2018, with Gilead ($GILD) and Abbott ($ABT) controlling the largest two pieces of the pie, respectively, according to GBI. Bloomberg says $20 billion by 2020. These are irresistible numbers for many pharma outfits.

Gilead famously forked over $11 billion for Pharmasset this year, spending an enormous sum to gain its lead nuc drug, GS-7977, and arguably the leading position in the all-oral-regimen race. And if the company's late-stage studies pan out as well as hoped, the multibillion-dollar gamble will become money well spent.

Nuc or no nuc

Credit or blame Pharmasset for much of the fervor over nucs. Last year the company wowed industry watchers with midstage study data of interferon-free regimens built around GS-7977, which appears to crush the ability of hep C virus to build resistance to treatment. Then the theory went: If you want take interferon out of the hep C cocktail, you might need a nuc.

Last week Gilead ($GILD) reaffirmed why Pharmasset might be worth the fortune it paid for the precommercial outfit. Gilead unveiled impressive data during the American Association for the Study of Liver Diseases meeting (AASLD) meeting that showed there were no detectable signs of HCV four weeks after treatment in 100% of 25 genotype 1 patients who took a 12-week course of 7977; the company's NS5A pill, GS-5885; and ribavirin. These were patients who had never taken interferon-based treatments.

Bristol ($BMY), conversely, lost big on a $2.5 billion bet on Inhibitex early this year after the 094 nuc compound from the developer flamed out in Phase II and a study patient died this summer.

"094 we thought was a reasonable bet, a reasonable hedge should the science tilt toward the you-must-have-a-nuc" theory, Dr. Doug Manion, senior vice president of development for virology at BMS, said in an interview. "But since then the science has evolved that we now know from the Abbott data and our own data that a nuc isn't quite as important as everyone thought."

In October and in detailed data presented during the AASLD meeting, Abbott impressed with an all-oral combination of 5 drugs, none of which are nucs, in a Phase IIb study. Tests showed no signs of the virus 12 weeks after treatment in 97.5% of treatment-naïve patients with the most common type of hepatitis C, genotype 1, on Abbott's ($ABT) ABT-450/r (a protease inhibitor boosted with the HIV drug ritonavir), ABT-267 (a polymerase inhibitor), ABT-333 (an NS5A inhibitor) and ribavirin.  Its Phase III program for the regimen is enrolling patients.

Bristol, which got into the hep C game long before it bought Inhibitex, has tested multiple all-oral combos sans nucs with upbeat results. For instance, this week the company highlighted data from a midstage study, with measures showing no viral activity in 94% of genotype 1 patients on a 12-week course of three experimental compounds: daclatasvir (an NS5A inhibitor), asunaprevir (an NS3 protease inhibitor) and BMS-791325 (NS5B non-nucleoside polymerase inhibitor). The company plans to start Phase III studies of the three-drug combo in 2014.

Japan cases abound

Talk to the proud contenders in the hep C arena, and you'll learn that each one sees his advantage over rivals. With Gilead's ($GILD) annihilation of the virus in a Phase II study that it's taken to Phase III development, analysts see the drug giant as the leader in advancing simple, all-oral regimens to the U.S. market.

However, hep C afflicts patients around the world, has 6 different genotypes and brings a bevy of other variables into the treatment equation, according to Dr. Doug Manion, senior vice president of development for virology at Bristol-Myers Squibb ($BMY). The mixed bag brings opportunities. Take Japan, where Manion believes Bristol could be the first to market with an all-oral regimen, with plans to file for approval of a dual combo of daclatasvir and asunaprevir by end of 2013.

To hear Manion tell it, the Japanese market for hep C drugs is nothing to sneeze at. Japan, where an estimated 2 million people have hep C, has an infected population composed of many elderly patients and mostly genotype 1b cases. The virus spread in large part because of contaminated blood supplies in country.

"These are elderly patients. They are very sensitive to the adverse events of interferon," said Manion, who leads Bristol's development in Japan. "A lot of them have been unwilling to even try a curative regimen that contains interferon. So that's why [the government] is so keen on getting an all-oral regimen there."

Enter Bristol and its all-oral cocktail. If approved in Japan, Bristol's combo could quickly seize market share as those who have forgone interferon-based therapies come off the sidelines to be treated.

Still, many contenders have an argument that buttresses their case for success in the hep C field.

Vertex finds strength in numbers

At Vertex ($VRTX), there are multiple all-oral options on the table, even though none of those options yet involves a Phase III study, which could come in 2014. The Cambridge, MA-based company has been wheeling and dealing since last June, when it struck an exclusive licensing deal with Alios BioPharma that featured a nucleotide polymerase inhibitor called VX-135 (formerly ALS-2200).

Vertex now plans to study VX-135 in four Phase II studies, including one that combines the drug with its fading blockbuster Incivek and another with ribavirin. Two more Phase II studies hit Vertex's drawing board this month when the company revealed two separate agreements with GlaxoSmithKline ($GSK) and Johnson & Johnson's ($JNJ) Janssen to test 135 in combination with GSK's NS5A inhibitor GSK2336805 in one midstage trial and in a dual combo with Janssen's protease inhibitor simeprevir (TMC435) from its partner Medivir.

"Because the efficacy we have no doubt about, the antiviral activity we have no doubt about, it's really generating the safety data to let the [VX-135] program go forward," Dr. Robert Kauffman, Vertex's chief medical officer, said in an interview. The four midstage studies should provide more of that key safety data as well as results on which patient populations respond best to which combos.

Achillion, the lone warrior

Unlike Vertex ($VRTX), Achillion thinks that it could have all the ingredients for a potent all-oral combo for hepatitis C with the three antivirals it's studying in clinical trials.

That's not to say Joseph Truitt, head of business development for Achillion Pharmaceuticals, isn't open to collaborations with other hep C developers, because he says he definitely is. But the New Haven, CT-based company, despite lots of rumors earlier this year that it was buyout bait, could advance an interferon-free cocktail to market alone. 

Add to the mix Roche ($RHHBY) and Boehringer Ingelheim, two more of the 20 largest drugmakers in the world that want a piece of the action in hep C. Boehringer is planning to begin a Phase III trial of an all-oral combo for the U.S. market. The herd is large and running fast.

For Vertex, this doesn't leave much time to remain the top act in the industry with Incivek. Many blockbusters generate billions of dollars in annual revenue for a decade or more. But Vertex is already seeing sales of Incivek fade after a year and half on the market.

"Not just crowded, but the speed of change is I think very unique," Dr. Robert Kauffman, Vertex's chief medical officer, said. "It is really quite remarkable and we are very happy to have been at the forefront of this. [Incivek] paved the way for direct-acting antivirals."

 -- Ryan McBride (email | Twitter)