UPDATED: Gilead disappoints with relapse data in oral Hep C study

Thorny data now threaten what some industry commentators have called a market bubble for all-oral regimens against hepatitis C. Gilead Sciences ($GILD) revealed that certain patients who had not responded to prior treatments relapsed after taking a combo of the company’s prized GS-7977--acquired in the company’s $11 billion buyout of Pharmasset ($VRUS)--and the anti-viral ribavirin.

Given the drugmakers’ feeding frenzy for oral Hep C drugs like 7977, Gilead’s disappointing data are likely to be intensely scrutinized and potentially temper expectations for next-generation drugs for the liver-damaging disease. In this morning’s release, the company said 6 out of 10 patients with the genotype 1 form of the disease in the company’s “Electron” study had viral relapses within four weeks of wrapping up 12 weeks of treatment on the 7977/ribavirin combo.

These data are setback because Gilead spent a big premium to acquire Pharmasset and its all-oral drug regimen against Hep C, which doesn’t require patients to take injections of interferon, which is associated with causing flu-like symptoms and other side effects. Bristol-Myers Squibb ($BMY), of course, made a similar bet on in this field in its $2.5 billion buyout of Inhibitex ($INHX) last month. The wisdom of these deals has been in question, and now the skeptics have some fuel for their arguments against such risky bets on assets that haven’t been proven in all three phases of clinical trials typically needed to seek market approval.

“These data answer an important question about the use of GS-7977 and ribavirin for the treatment of genotype 1 null responder patients, suggesting that additional direct acting antivirals may be necessary to effectively treat this patient population,” Norbert Bischofberger, Gilead's chief scientist, said in a statement. “We will continue to explore a number of therapeutic approaches to address this significant unmet medical need, including combinations with other oral antivirals.”

Gilead's stock had sunk by 15% as of early this afternoon. Its bad news appears to have benefitted others in the race to advance interferon-free Hep C cocktails such as Vertex ($VRTX), which also markets the Hep C drug Incivek, as well as Achillion Pharmaceuticals ($ACHN) and Idenix Pharmaceuticals ($IDIX). There's been lots of speculation that Achillion and Idenix are likely to be the next Hep C drug developers to be acquired, and Gilead's data appear to emphasize the belief that it could take multipe drugs in cocktails to wipe out the disease without interferon. 

- here's the release
- check out Bloomberg's article  
- see the WSJ's report