BioLineRx shares pop on hep C pact, raising temps in an overheated field

In yet another sign that hepatitis C is becoming one of the most overheated fields in drug development, Israel's BioLineRx ($BLRX) saw its shares shoot up after it struck an early-stage licensing deal for a new therapeutic designed to eventually become part of a future cocktail remedy. And Bloomberg helped feed the speculation with a story noting that the market buzz indicated that the biotech had become a much more attractive takeover target now that it has a hep C program to boast about.

Judging by the press release, though, there may be less to this deal than the market gossip would indicate. BioLineRx touted preclinical evidence that suggests that Genoscience's oral BL-8020 could be efficacious in boosting the potency of related treatments while cutting back on some of the adverse effects that hinder hepatitis C drugs. And the biotech also underscored the potential for reducing the treatment period, another hot goal in the field. There wasn't a peep about any upfront payment or related milestones, but the overall size of the growing market did earn a mention.

"We are excited about entering the field of Hepatitis C therapeutics, which is a very important field in the pharmaceutical market today," said Dr. Kinneret Savitsky, CEO of BioLineRx. "The current global Hepatitis market is estimated at approximately $6.5 billion and is growing steadily."

Shares of the Jerusalem-based biotech jumped 25% on the buyout gossip as investors seem interested in all things hepatitis C-related in the wake of the big Pharmasset ($VRUS) and Inhibitex ($INHX) buyouts. But both of those companies are much farther along in the development process than the newly-arrived BioLineRx. And the risks involved in partnering at a preclinical stage are enormous. Hepatitis C may fast become a bubble that pops on the first big clinical setback.

- read the press release
- here's the Bloomberg report