By Shilpa Siddhi, M.S., M.B.A.
This article is Part 3 in a series about Hepatitis C intended to provide an update and fundamental analysis of the companies that are actively pursuing the development of an all oral therapy for HCV. The series will cover the major players in the HCV space, including Gilead (NASDAQ:GILD), Bristol-Myers Squibb (NYSE:BMY), Roche (OTCQX:RHHBY), Abbott (NYSE:ABT), Achillion (NASDAQ:ACHN), J&J (NYSE:JNJ), Vertex (NASDAQ:VRTX), Idenix (NASDAQ:IDIX). Here we discuss Achillon and Idenix. Part 1 and Part 2 of the series can be found here and here.
Achillion and Idenix are the two relatively smaller biotech companies independently conducting clinical trials to further their pipeline of Hepatitis C candidates. None of their programs are currently partnered with any the other pharmaceutical companies.
Achillion : Achillion is focusing on treating HCV by targeting NS5A and NS3 drug targets. Achillion has multiple candidates in its HCV pipeline: sovaprevir (formerly ACH-1625), which is a NS3 protease inhibitor; ACH-2684, which is a pan-genotypic NS3 protease inhibitor; as well as ACH2928 and ACH3102, which are NS5A protein inhibitors.
Sovaprevir is the company's lead candidate with a potential for once daily dosing and is equipotent against HCV genotypes 1a and 1b at IC50 ~1nM. An ongoing Phase II clinical trial with sovaprevir in combination with PegIFN and ribavirin (RBV) gave a sustained viral response (SVR4) of 85-100%. Additional results for SVR4 and SVR12 will be available in the first quarter of 2013. A summary of the Phase II clinical program and available results is shown in Table 1.
Table 1: Achillion HCV Phase II Trial Details and Results
The company has started to enroll patients for an all-oral Phase II clinical trial to evaluate ACH-3102 (pan genotypic NS5A inhibitor) plus RBV for the treatment of genotype 1b patients in September, 2012. The results are expected before the end of the year. The proof of concept Phase I trial for ACH-3102 demonstrated the potency of ACH-3102 against genotype 1a patients.
At AASLD 2012, Achillion announced results from the proof-of-concept studies from ACH-2684 and drug-drug interaction (DDI) results from sovaprevir and ACH-3102. An ACH-2684 Phase Ib study demonstrated comparable activity in cirrhotic versus non-cirrhotic patients. The sovaprevir and ACH-3102 DDI study showed that there was no adverse interaction between the two compounds and both were safe as no significant adverse events were reported. The company is planning to submit Phase II trial protocol to evaluate an all-oral, interferon free regimen containing sovaprevir and ACH-3102 to the FDA with the goal of releasing top line results in the first half of 2013.
Fundamentals: Achillion ended the third quarter 2012 with cash, cash equivalents, and marketable securities of approximately $90.6 M. With the fully diluted 79.5 MM shares outstanding and the stock price of $7.21 (11/19/12), and a debt of $781,000 the market cap stands at $573.3 MM and the enterprise value (EV) is $483.5 MM. Since the company had secured about $42 MM of financing in August 2012, the company has cash to fund the clinical programs detailed above.
In 2011, Achillion was very closely followed by investors and the stock rallied because it was viewed as the next acquisition target with a big premium like Pharmasset (VRUS) and Inhibitex. Unfortunately for shareholders, that hasn't happened to date, creating downward pressure on the stock price this year. Post AASLD with encouraging data from Abbott and Gilead, Achillion stock experienced more downturn, creating a good buying opportunity.
Achillion is the only small biotech with four HCV candidates in the pipeline, two of which are being evaluated in Phase II studies, that is not partnered with pharmaceutical companies. Generally in the HCV field, protease inhibitors were considered to be weaker, and so the protease inhibitor sovaprevir was considered to be inferior to competing candidates. Recent data from Abbott's AVIATOR study with the combination of protease inhibitors and an NS5A inhibitor demonstrated high SVR rates, validates Achillion's Phase II study with the combination of sovaprevir and ACH-3102, an NS3 protease inhibitor and NS5A inhibitor. The data from this study is expected in the first half 2013 and there is a good probability of success. ACH-3102 has a higher resistance to mutation and a longer half-life which gives an advantage over other HCV candidates. Data from Achillion's regimen could be as good as Abbott or even better.
There is much more uncertainty in the developing HCV market than there was a year ago, and if one of the companies with late stage clinical trials produces unexpected results, Achillion's stock will react positively. Rather than viewing Achillion as an also-ran in the HCV market, the company still has the potential to become a major player. Any negative outcomes for competitors will be viewed as positive developments for Achillion and the speculation of collaboration or buyout will return. With a smaller market cap than competitors, Achillion's stock at this level appears to be a good buy.
Idenix : Idenix's lead product candidate for the treatment of hepatitis (HCV) is a once- daily, oral HCV nucleotide polymerase inhibitor based on the company's proprietary technology. The liver targeting technology enables the formation of high levels of nucleoside triphosphate to maximize drug efficacy. With Bristol-Myers Squibb's nucleotide polymerase inhibitor's (BMS-986094) serious cardiac related adverse event leading to a partial clinical hold, IDX-184 and IDX-19368 have also been placed on partial clinical hold since August 2012.
According to the company, even though IDX-184 and IDX-19368 fall into the same broad NS5B inhibitors category and share the active metabolite of BMS-986094, attributes of Idenix candidates may favorably differentiate toxicity profiles. In September 2010, there was a partial clinical hold on IDX-184 due to three cases of elevated liver function tests observed in a drug-drug interaction study. The hold was lifted in February, 2011. IDX-184 in combination with PegIFN/RBV administered once daily for 12 weeks was evaluated in Phase IIb studies for treatment-naïve HCV genotype 1- infected patients. No viral breakthrough was seen during the 12 week treatment period, and the complete SVR results will be available in 2013. Table 2 gives the interim results from the Phase II study.
Table 2: Idenix HCV Phase II Trial Details and Results
In light of the clinical hold of IDX-184, Idenix has evaluated multiple cardiac safety measurements from the IDX-184 Phase IIb study and no evidence of severe cardiac findings was found. The company is preparing a package to submit to the FDA by the end of the year in hopes of having the clinical hold lifted.
The company also has IDX-719, am NS5A inhibitor being tested in Phase I clinical studies. IDX-719 is the only NS5A inhibitor that has demonstrated activity in HCV-infected GT1, 2, 3, and 4 patients. IDX-719 was tested in a three-day proof-of-concept study in 64 treatment-naïve, genotype 1, 2, 3, or 4 HCV-infected patients. The drug was well tolerated and showed robust activity across multiple HCV genotypes with no reported serious adverse events. The company anticipates beginning a Phase II clinical trial evaluating IDX-719 in combination therapy in the first half of 2013.
Fundamentals: Idenix ended the third quarter 2012 with cash and cash equivalents of approximately $251.8 MM. With 133.8 MM shares outstanding, and the stock price of $4.61, the market cap is $618 MM and the EV is $366 MM. The company raised $176 MM to support the clinical trials in the pipeline in July 2012 by issuing 22 MM shares. The current cash and cash equivalents are expected to be sufficient to sustain its operations through Q1 of 2014.
With two of the company's lead candidates placed on clinical hold, it remains to be seen how much impact will the BMS-986094 serious cardiac related adverse events will have on FDA's decision for NS5B nucleotide inhibitors of other companies. It is not clear when the FDA will lift the clinical hold if at all. The company's stock was trading at more than twice its current valuation prior to the clinical hold, so if the clinical hold is removed, Idenix will be back in the race as a speculative buy.
HCV Market and Summary: Hepatitis C is clearly a multi- billion dollar market opportunity. The global prevalence of chronic Hepatitis C is estimated to average 3%, ranging from 0.1 to 5% in various countries. The American Association of Liver Disease estimates that up to 85% of individuals become chronically infected following exposure. HCV disease progression occurs over a period of 20 to 30 years during which patients are generally asymptomatic. If left untreated, chronic hepatitis can lead to permanent liver damage, which can result in the development of liver cancer, liver failure, or death. It is the leading cause of liver transplantation in the U.S. In 2011, interferon therapies, used for treating hepatitis B and C, accounted for 34% of the hepatitis market.
The current standard of care for HCV is interferon plus ribavirin therapy in addition to the recently approved protease inhibitors Victrelis and Incivek, which are used in combination in genotype 1 patients. None of the current therapies address the entire hepatitis C market. In particular, some genotype 1 infected patients, including null responders and patients who do not respond to interferon therapy, do not have adequate treatment options. The current standard of care has long treatment duration and still rather high dropout rates due to the high incidence of serious adverse events. Treatment related adverse side effects cause patients to feel sicker than prior to the treatment, experiencing flu-like symptoms, and nearly 40% of treated patients require dosage adjustments.
NS5B polymerase and NS3 protease are the two most common drug targets that the companies are focusing on. Recent cardiac toxicities in BMS-986094 (NS5B nucleotide inhibitor) have forced FDA to put clinical hold on BMS-986094, IDX-184 and IDX-19368. On October30, 2012, Biocryst Pharmaceuticals (NASDAQ:BCRX) another HCV therapeutics developer announced that it is withdrawing Investigational New Drug Application (IND) for the BCX5191 following the discussion with FDA regarding the preclinical toxicity profile. The FDA is very cautious regarding the development of nucleoside and nucleotide inhibitors for HCV.
Bristol-Myers Squibb and Gilead both have spent billions of dollars to take over companies and to advance their HCV pipeline to be first in the market. BMY had to stop the development of late stage candidate BMS-986094 because of the toxicities and death in the clinical trials, and had a big setback. This leaves BMY with daclatasvir, which performed very well in Phase II clinical trials in combination with sofosbuvir (GS-7977) in hard to treat patients. It does not appear that Gilead and BMS will collaborate and conduct a Phase III study to evaluate sofosbuvir in combination with daclatasvir. Gilead is, however, conducting multiple Phase III studies to evaluate different combination therapy with sofosbuvir, and results from these studies are expected in December, 2012 or in Q1 2013. Gilead is also testing a single pill combination of sofosbuvir and GS-5885 in Phase III trials.
From the Pilot and Co-pilot and Aviator Phase II studies Abbott's DAA interferon free regimen addresses the goals of the new second generation hepatitis treatment that all the companies are eyeing. Abbott has set a high bar for Gilead, BMY, and other competitors. Although Abbott has obtained a good combination therapy with increasing SVR rates, a combination of 5 drugs as in the Aviator study is more cumbersome and not very convenient compared to the one combo pill of sofosbuvir/GS-5885.
ABT has provided the proof of concept results that a protease inhibitor along with an NS5A inhibitor can be combined to get an effective combination therapy for HCV patients. Achillion will be beginning a similar study in the fourth quarter of 2012 with the results expected in first half of 2013. Achillion's sovaprevir doesn't require boosting with ritonavir while ACH-3102 (NS5A inhibitor) shows a strong activity against challenging genotype 1 mutations. Achillion is one of the biotech companies with good lead candidates in HCV therapeutics that are not partnered with pharma companies.
With two candidates on clinical hold (IDX-184 and IDX-19368), Idenix is facing a hurdle as to when the clinical hold will be lifted. Idenix plans to begin a Phase II study to evaluate IDX-719 in combination therapy in the first half of 2013. IDX-719 is the only NS5A inhibitor that has demonstrated activity across multiple HCV genotype patients. It will be interesting to watch the outcome of the Phase II trials in late 2013.
Medivir (OTC:MVRBF), along with Johnson & Johnson, also has multiple Phase III results studies evaluating TMC435 in combination with peginterferon alfa and ribavirin due in the first quarter of 2013. Since this is not an all oral combination, there is not too much excitement for these data. Roche has its candidates in Phase II, and hopes to start some Phase III studies in 2013.
On November 1, 2012, Vertex announced two separate collaborations with GSK and JNJ to test combination therapies with its lead VX-135 NS5B inhibitor in the effort to develop an all oral combination therapy for HCV. The company already has Incivek (approved in 2011) in combination with peginterferon alfa and ribavirin for the treatment of hepatitis C on the market.
Many other companies like Merck (NYSE:MRK), Novartis (NYSE:NVS), Boehringer Ingelheim, Enanta Pharmaceuticals, Santaris Pharma, Alios Biopharma, and Scyexis, to name just a few, are exploring novel treatment options for HCV treatment.
Hopefully in the next few months, FDA will review BMS-986094 and IDX-184 candidate clinical data clearly and decide the fate of the Inhibitex's candidates. Achillion seems to be more balanced with candidates with different modes of action. It will be interesting to see how BMY and Gilead develop candidates with in their own pipelines to best achieve a good combination therapy.
Multiple Phase III trials are being run by Gilead (sofosbuvir), BMY (daclatasvir), Medivir and J&J (simeprevir), and Abbott (ABT-450). Some of the Phase III results will be available starting in December 2012. Clearly, with a tough competition from different companies with different combination therapies, the bar of expectation for the HCV treatment has been raised. An all oral combination therapy once daily with one or two pills, for shorter duration, fewer adverse events will be the most convenient. Achieving strong results in sustained viral response is no longer enough - the winning treatments will also be all-oral and will possess convenient dosing schedules. In the next year or so, with multiple Phase III read outs it will become more clear which of the companies will be the first or will have the best therapy in the market for an all oral therapy for hepatitis C. However, the global HCV market is huge and there will clearly be space for more than one successful player.