UPDATED: Merck (sort of) wins back 'breakthrough' boasting rights on hep C

Merck ($MRK) execs weren't in the least bit happy when the FDA notified the company last January that it was stripping away its breakthrough therapy designation for their closely watched hepatitis C combo. But the agency has now relented and reversed itself, in part, and the pharma giant today notes that it's getting two new BTD titles in narrow patient subpopulations to replace the broader one that it lost.

Roger Perlmutter

When Merck put out the word a few months ago that the agency was yanking the "breakthrough" status provided as a new therapy for genotype 1 patients, the company made it clear that they weren't going to let it ride. Further discussions were in the works as R&D chief Roger Perlmutter grumbled about the turnaround, which was triggered by AbbVie's ($ABBV) second-place finish--behind Gilead ($GILD)--with Viekira Pak. Third place was looking too far behind to keep a cutting-edge rep as new therapies swiftly revolutionized the market.

The FDA, in a first reconsideration of a reconsideration, now allows that Merck's grazoprevir/elbasvir combo still qualifies as a breakthrough for GT1 with end stage renal disease on hemodialysis and patients infected with chronic HCV genotype 4.

Leerink's Seamus Fernandez sees a definite upside in the news. Merck should now file for an approval in mid-2015, and the breakthrough title gives the pharma giant a clean shot at an approval before the end of the year. If so, he notes, Merck will be in a position to compete for a prime spot on payers' formularies--a move that will likely drive down prices even more at AbbVie and Gilead.

At this point, getting two new BTDs to replace the one it lost may be a case of too little, too late for Merck, which can now only distinguish itself by price. The FDA set up the breakthrough drug program with a commitment to opening its doors to new drugs that offered a major advance for patients, promising that it would do what it could to reduce the time it would take to get an approval--or at least a decision. No matter what the FDA's timeline now, Merck's combo--an NS3/4A protease inhibitor and an NS5A--will remain a late arrival behind the pioneers, which are doing as many deals as possible to carve up market share before Merck and the others make their entrance.

Fernandez already dropped his franchise sales forecast for hep C in 2016 from $830 million to $475 million, a $355 million erosion in the fast-changing market.

For Merck, though, breakthrough status represented a lot more than a hall pass at the FDA. After years of pipeline setbacks, its hep C program--coming as it did behind the all-hands-on-deck campaign on the immuno-oncology drug Keytruda--was used to herald the fact that the pharma giant had turned the corner under Perlmutter and was on the much faster inside track again. So it was no great wonder why Merck was so sensitive about its BTD status.

- here's the release

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