Hepatitis c treatments have been a big catalyst for events the past week and half. The biggest of course is Merck's decision to buy Idenix and its hepatitis C portfolio for an unprecedented 239% premium -- the highest price ever paid in a deal greater than $100 M. The deal was motivated to get Merck additional hepatitis C pipeline candidates -- particular nuc inhibitors -- to combine with its own pipeline to produce combination products effective against all the heaptitis c genotypes. And it only cost them $4 B to do it for a chance at a $20 B market.
The high premium is said to have been driven by intense bidding competition. AbbVie and J&J with their respective hepatitis C programs were also apparently in the running. Thus Merck had to put up or get out if they wanted to emerge with its prize, Idenix. Now. it must pay off its gamble by delivering key combination products in the next few years -- that will be oral, without ribavarin or interferon, effective against all genotypes and be "short duration" (8 weeks) in treatment span. If it can do all that, its $4 B bet will likely pay off handsomely. See in-Pharma, Fierce Biotech, and Bloomberg.
As mentioned J&J and AbbVie were in the bidding for idenix. Now, it is thought that one or both will turn their attention to acquiring Achillion -- a company who recently reported good clinical results for its hepatitis C candidate in phase II trials. Achillion's stock spike 48% on the Idenix deal and another 36% yesterday as it became subject of market acquisition rumors. Achillion also has nuc inhibitors that are of interest in also being used in combo therapies. Achillion's fortunes were lifted by the Idenix deal and by the fac that FDA took one of its lead candiates off of clinical hold -- thus spurring the price spikes. See Fierce Biotech and Bloomberg.
This all means that Gilead and its remarkable hepatitis C drug, Sovaldi has a big target on its back. Of course, it has an equally remarkable big $2.3 B in 1st Qtr sales this year. All the companies above plan to compete head to head with Gilead over the world's estimated 170 million hepatitis C patients and the projected $20 B in revenue that accompanies their treatment. See Bloomberg.
Posted by Bruce Lehr June 10th 2014.