J&J, Achillion aim for best-in-class with early HCV data

Johnson & Johnson ($JNJ) is losing out to the competition in hepatitis C. So much so, in fact, that it actually excluded its poor HCV drug sales from its overall sales growth figures during the second quarter. But the pharma giant is looking to long-embattled HCV player Achillion ($ACHN) to help it hit upon a best-in-class combo that could give it a competitive edge.

J&J’s Janssen is presenting Phase IIa data on this all-oral triple combination at the European Association for the Study of the Liver (EASL) conference in Paris later this month; and the abstracts for the conference have been published. The pharma has already opted to advance the triple combo, which includes its marketed Olysio (simeprevir), into a Phase IIb trial this quarter based on interim data.

The combo is part of a 2015 partnership between Janssen and Achillion that’s worth up to $1.1 billion.

“We established a worldwide collaboration with Janssen Pharmaceuticals where we combine odalasvir, which is an NS5A inhibitor from our portfolio with a nucleoside and Olysio, which is a marketed protease inhibitor from Janssen,” outlined Achillion President and CEO Milind Deshpande on a conference call last month. “In collaboration with Janssen, we have access to their global development and commercial infrastructure. These studies are fully funded by Janssen and the terms of the collaboration were also very attractive to us.”

He continued, “We received $225 million in equity payment or $905 million in milestones and the royalty rates start in the mid-teens and escalate to the mid-20s and we believe that in a robust market like hepatitis C, this represents a significant opportunity for us as we develop best-in-class treatments for HCV.”

J&J had anticipated hepatitis C sales would grow by about 6%--but during the first half they gained only 1.4%. The pharma dispensed with the shortfall in a single remark on its second-quarter earnings call: “Competitors in hepatitis C significantly impacted sales this quarter,” summed up J&J VP of Investor Relations Louise Mehrotra. The pharma markets Incivo (telaprevir), as well as Olysio, to treat HCV.

The highlight of the Phase IIa triple combo data is the potential for a 6-week HCV treatment that’s showing 100% response rates. In a 20-patient cohort of treatment-naïve patients with genotype 1 (GT1) chronic hepatitis C virus (HCV) infection, the triple combination of odalasvir, AL-335 and simeprevir showed 100% sustained viral response rates.

“This is an impressive result despite a shorter duration and is likely to grab investors' attention in an increasingly competitive HCV market,” observed Leerink's Joseph Schwartz of the data in this cohort in a Sept. 9 note.

The remainder of the trial was for 8-week cohorts--but HCV competitor Gilead ($GILD) already markets an 8-week dual regimen, Harvoni, with very high response rates.

The Phase IIb study is slated to have two arms that evaluate the triple combo in a wide range of HCV genotypes across both 8-week and 6-week treatment regimens. The 300-patient trial will start enrolling in November, with primary endpoint data set for July 2017.

Achillion was up a bit on the news to a market cap of about $1.2 billion.