Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

Barclays Global Healthcare Conference

March 13, 2013 8:00 am ET

Executives

Milind S. Deshpande - Chief Scientific Officer and President of Research & Development

Unknown Analyst

Good morning. My name is [indiscernible], I'm the U.S. biotech analyst here at Barclay's. So I welcome everyone to the first session of the second day of our conference. I'm very pleased to announce that our next presenting company is Achillion Pharmaceuticals. And then presenting for the company is the Dr. Deshpande, Chief Scientific Officer of the company. Milind?

Milind S. Deshpande

Thank you, and good morning. My name is Milind Deshpande, and I'm the President of R&D and Chief Scientific Officer at Achillion Pharmaceuticals. It is my pleasure to present to you, to give you an overview of our HCV pipeline and strategy.

During my presentation, I will be making some forward-looking statements. There are some risks and uncertainties associated with these statements, and these are fully disclosed in our SEC filings.

The current treatment for hepatitis C is interferon-based, and there are -- aside from the suboptimal activities that is seen with this interferon-based treatments, there are severe side effects that are associated with these treatments such as, severe rash as well as anemia. Our goal in developing our portfolio for treatment of hepatitis C is to deliver an all-oral interferon-free regimen. And we have 2 combination regimens, which are in Phase II clinical trials, that we are currently evaluating for treatment of hepatitis C. The first combination is of sovaprevir, which is an NS3 protease inhibitor and ACH-3102, which is an NS5A inhibitor. We envision that this combination will be used for -- broadly used for treatment of genotype 1, as well as other genotypes. Because of the high barrier to resistance that is provided by ACH-3102, we are also evaluating a very simple combination of ACH-3102 plus ribavirin for treatment of genotype 1b. This combination also currently is in Phase II clinical trials. Aside from these 2 combinations that we are developing for our treatment of HCV, we also have a next-generation protease inhibitor, which is, ACH-2684, which has completed Phase I clinical trials.

HCV is a global disease that affects about 170 million people. There are 6 different genotypes or subtypes of hepatitis C virus, and the distribution of these different subtypes is shown on this particular slide. Genotype 1a is the predominant subtype or genotype of HCV that is found in the United States, where about 60% of the patient population is infected with genotype 1a.

Genotype 1b is the predominant subtype, and is found in Japan as well as certain parts of Europe. Genotype 3 is found predominantly in Russia and some other parts of Eastern Asia, and genotype 4 is predominantly found in Egypt.

Aside from the diversity that is seen in the HCV virus itself, there is a significant diversity in patients also. There are multiple factors that are seen in patients that affect the treatment outcomes. Stage of the liver disease are -- if some patients have advanced liver disease or cirrhosis, that tends to affect the outcome of the treatment. About 10% of the patient population is also co-infected with HIV. And for HIV/HCV co-infected patients, there are multiple drugs, or these patients are on multiple concomitant medications, elevating the importance of drug-drug interactions. And this is one important aspect that I'll touch upon as we look at our portfolio of HCV compounds.

So aside from the diversity in the virus itself, there are numerous factors in patients that affect their treatment response. And as I'll discuss in the next few slides, our portfolio is well-suited to address the diversity in the virus, as well as the complexity in patients that is observed in this particular disease.

Because of the multiplicity of the viral subtypes, as well as the varied responses that are seen in patients, we believe that the HCV market is ideally suited for segmentation. Subsets of patients can be treated with different regimens. For example, genotype 1b is an easier to treat patient population and can be addressed with a very simple treatment regimen. Genotype 1a and patients with advanced liver disease are difficult to treat, as well as patients who have had prior experience with interferon are also difficult to treat. Comorbidities, as well as co-infection with HIV, as well as the stage of the liver disease, also play an important role in treatment outcomes. So we believe that ability to launch regimens that are tailored to specific geographic needs, different HCV subtypes, as well as different patient populations is going to be important as different treatment regimens are brought to the market to treat hepatitis C.

So if you look at our development strategy, our base case scenario is that a combination of NS5A inhibitor, such as ACH-3102, plus protease inhibitor, which is sovaprevir, with pegylated [ph] ribavirin, will be able to treat genotype 1 as well as, other genotypes. This is the base case scenario for our value proposition.

Aside from treating different genotypes, because of the high barrier that is provided by both 3102, as well as sovaprevir, we believe that this combination is also ideally suited to address different types of patient factors that we discussed earlier, such as patients with cirrhosis, as well as patients that are co-infected with HIV.

I briefly mentioned that ACH-3102 provides a high barrier to emergence of resistance. We were not able to generate resistance with ACH-3102 in genotype 1b. And based on that finding, we believe that a combination of ACH-3102 and ribavirin will be able to deliver sustained viral response in genotype 1b. We see this as an upside scenario for our base case value proposition, where we are developing a combination of NS5A and a protease inhibitor.

We are also actively engaged in developing these 2 compounds in combination with other direct-acting antiviral agents, and we believe that these collaborations, represent a value-added scenario to our portfolio.

In today's presentation, I'll go through our strategy for the base case, as well as the upside in our portfolio, which is talk about the development of sovaprevir in combination with 3102, as well as 3102 by itself for treatment of genotype 1b.

Since the presentation of the first clinical data for NS5A inhibitors, going back in 2008, there has been very active interest in pursuing NS5A inhibitors as a component of the backbone of the combination treatment. NS5A inhibitors display pico-molar activity against HCV. Another attractive feature of NS5A inhibitors is that these compounds intervene at multiple stages in viral life cycle. They block viral secretion, they block HCV RNA synthesis and they also reduce the stability of HCV RNA. Because these compounds intervene at multiple stages in HCV life cycle, one of the hallmarks of NS5A inhibitors is that you see a very rapid decrease in HCV RNA. Our "The Phase I Decline" which is seen in the first 24 to 48 hours is very profound, and if not for any other reason, just for this reason, I think NS5A inhibitors will continue to play a very important role in treatment of HCV. However, the main challenge for NS5A inhibitors has been a low genetic barrier to resistance. The baseline amino acid variants in NS5A protein confer resistance to inhibitors, and as a consequence of that, on-treatment rapid emergence of resistant variants are seen when patients are exposed to NS5A inhibitors.

So our goal in designing the second-generation NS5A inhibitors was really to identify a compound that provided a high barrier to resistance, while maintaining the pico-molar activity that is seen with NS5A inhibitors. And that was accomplished by making 2 key changes to the structure of first-generation inhibitors. The first change was in the core structure or in the central part of the NS5A inhibitors, where we modified that core structure, and to go along with that, we also modified the "end pieces" to NS5A inhibitors. ACH-3102 was optimized to retain activity against these resistant variants. And the activity was optimized due to the 2 key changes that I just highlighted. The first change was in the core structure of the molecule and the second change was to the end pieces or the end groups of first-generation NS5A inhibitors.

ACH-3102, in it's Phase I clinical trials was dosed up to 14 days in healthy volunteers. The compound was safe and well-tolerated up to 1,000 milligrams. And as you'll see in subsequent slides, the therapeutic dose of ACH-3102 is either 50 milligrams or 75 milligrams. So we have established a significant safety margin from the Phase I studies that were done with ACH-3102, where we dosed it up to 1,000 milligrams.

ACH-3102 clearly demonstrates a biphasic elimination. The first phase of elimination is about 25 to 30 hours, and the terminal elimination phase is about 250 hours. About 90% of the drug is eliminated from the body within the first 24 to 48 hours, and about 10% of the drug is eliminated at a much lower rate, resulting in a long terminal half-life.

In HCV-infected patients we treated, we used doses of 50, 150 and 300 milligrams. So a single dose of ACH-3102 was administered to genotype 1a treatment-naive patients. And with all these doses, we achieved an average of 3.74 log reduction in HCV RNA, and this is clearly profound. So a single dose of 3102 gave us very robust reductions in HCV RNA.

Not shown on this slide is the genotypic analysis that we completed with some of the -- with all -- actually, all of the patients that were treated with ACH-3102, and it was very gratifying to see that ACH-3102 did retain activity against some of the key resistant mutations that confer resistance to other NS5A inhibitors, for example, the L31M mutation. In all the Phase I studies, including the proof-of-concept study, ACH-3102 was safe and well-tolerated.

Because of the unique virology of ACH-3102, i.e. the high barrier to resistance that ACH-3102 provides, which is actually not seen in any of the other NS5A inhibitors, we decided to undertake a study where we are now testing ACH-3102 in combination with ribavirin for 12 weeks in genotype 1b patients.

There are 3 groups in this ongoing study. In the first group, we are treating ACH-3102 with a loading dose of 225 milligrams and 75 milligrams for the rest of the treatment duration, plus wave-based ribavirin for 12 weeks. This cohort is completed and I'll show you the results from this particular cohort. There are 2 additional cohorts that we will undertake after a full analysis of this first cohort. The key objectives of this study were to establish 12 weeks of safety and tolerability. Since this is the first 12-week treatment that we are evaluating with ACH-3102, it was important for us to see the safety and tolerability of this drug. We also wanted to see if the high barrier to resistance that we saw in all our preclinical studies would translate into a clinical study. And finally, we also wanted to evaluate the ability to achieve SVR4 and SVR12 with a single DAA NS5A inhibitor in combination with ribavirin.

The patient demographics from this trial are fairly straightforward. Majority of the patients were male, majority of them were caucasian, majority of them were slightly on the heavier side and the HCV RNA median was 6.43 logs at baseline.

The next slide shows the study status as of last month. There are 3 subjects who completed our 12-weeks of dosing and we have SVR4 data for these subjects, and the other subjects are in different stages of their treatment regimen. And in the next few slides, I will summarize the data for all these patients in terms of their antiviral response.

Overall, if you look at the efficacy of ACH-3102 plus ribavirin, 8 patients completed our 4-weeks of dosing, so we are looking at RVR, and 6 out of 8 patients achieved RVR, that is HCV RNA levels were less than 25 international units per mil, that is 75%. So 75% of the patients achieved RVR. 3 patients have not completed end-of-treatment, and all 3 subjects had undetectable HCV RNA after 12-weeks of dosing. So at this time, the end-of-treatment response is 100%, and these 3 same -- and same 3 subjects have SVR4 data and these 3 subjects also are undetectable 4 weeks after completing the treatment regimen. So SVR4 is also 100%.

What was really instructive for us to see in this particular trial? Well, there were 2 things. One is the response on a weekly basis in these patients. That is, we monitor the reduction in HCV RNA on a weekly basis, and it was good to see the rapid reduction in HCV RNA in the subjects that were enrolled in this trial. And the second important aspect was the clinical virology that came out from this trial. We were very much interested in looking at whether 3102 provides a high barrier to emergence of resistance. So not seeing viral breakthrough while on treatment was an important aspect of this study.

So in the next 4 slides, I'll walk you through the individual patient data that we have in terms of reductions in HCV RNA. This slide shows the reductions in HCV RNA for the first 3 subjects who completed 12-weeks of dosing and achieved sustained viral response. What we see in these subjects is a very rapid reduction in HCV RNA. By week 3, these subjects are undetectable. They don't have HCV RNA that can be detected by the current sensitivities of the assay, and the viral suppression is maintained throughout treatment duration. So again, we did not see viral breakthrough with these patients and we see sustained viral response up to 4 weeks after completion of dosing.

The next 3 patients, again, we see very rapid reduction in HCV RNA in these patients. By week 4, all 3 patients achieved undetectable HCV RNA, again indicating the potency of ACH-3102. In these patients, again, we did not see any viral breakthrough while on treatment, which highlights that 3102 does provide a high barrier to emergence of resistance and we are eagerly awaiting response from these patients as they continue treatment with ACH-3102.

It's important to note that one of the subjects here, which is shown in blue, this subject had the highest baseline viral load. So this subject came in, had about 12 million copies of HCV RNA at baseline. And as we know, one of the factors that affects treatment outcomes in HCV-infected patients is the amount of viral load. So it was, again, very gratifying to see that a patient with a very high viral load at baseline achieves undetectable HCV RNA by week 4.

The last 2 patients that I'll discuss are very interesting. These 2 patients did not achieve undetectable HCV RNA, as I showed for the previous 6 patients, but nonetheless, both these patients are responding to treatment. We have not seen viral breakthrough, and so the question was why is it that these patients have a slow response as compared to the other 6 patients that I showed you early on? And the answer to that is in the clinical virology that we are completing for these patients. So this patient, which we refer to as patient E, has demonstrated clear [ph] log reduction from baseline to week 1, but after that, the sloping HCV RNA reduction is tapered.

Baseline sequencing for this particular subject demonstrates that this subject has at least 3 simultaneous substitutions at baseline. We are now completing the phenotypic analysis for this particular subject. But what we are seeing is that, again, this patient has at least 4 mutations at baseline, which is a fairly unusual situation. And the probability of a subject having 4 mutations, linked mutations, at baseline to an NS5A inhibitor prior to exposure is highly unlikely.

The same point can be illustrated with the next subject that I'm going to discuss, which is patient F. This patient had a slow response to ACH-3102. And again, we have not seen any viral breakthrough with this particular subject. What was really interesting with this subject is that, when we completed the baseline sequencing or completed the clinical virology at base line, this patient had 6 mutations that confer resistance to NS5A inhibitors. More importantly, the mutations at L31M and the Y93H mutations were present 100% at baseline. So this patient did not have any wild-type virus coming into this clinical trial, which is a very, very unlikely situation. And at this time, we cannot rule out the possibility that this patient may have had prior exposure to another NS5A inhibitor before enrolling in this trial. But the good news is that, even with these 6 mutations that confer high level of resistance to other NS5A inhibitors, we are seeing a continued decrease in HCV RNA with ACH-3102. We have not seen viral breakthrough in any of the patients that have been treated with ACH-3102, which again supports our thesis that ACH-3102 does provide a very high barrier to emergence of resistance.

So if you take a broader view in terms of what we are learning from this trial, as I mentioned earlier, this is the first trial that we are doing where we are exposing 3102 for 12 weeks, and so far, ACH-3102 appears to be safe and well-tolerated. The second important question for us was does ACH-3102 provide on-treatment, continued viral suppression and does it provide a high barrier to resistance? And based on the individual viral kinetics that I showed you early on, we do see very rapid viral suppression, indicating that ACH-3102 is indeed a very potent direct-acting antiviral agent. We have not seen any viral breakthrough or relapse to date, again, indicating that 3102 provides a high barrier to resistance. And we are seeing continued viral progression [ph] in presence of multiple NS5A resistant mutants, again, supporting our thesis that ACH-3102 is unique as compared to the other NS5A inhibitors that are currently in development. And the final question is can ACH-3102 plus ribavirin, in a 12-week treatment regimen, provide a high barrier to resistance? And the answer to that is yes, so far.

So moving on to outside [ph] scenario, where we are evaluating a combination of protease inhibitor and ACH-3102 for treatment of genotype 1 broadly. Before I go there, I would just like to briefly capture some of the key characteristics of ACH-1625. As I mentioned, this is a protease inhibitor that provides, again, a high barrier to resistance. This is a once daily drug that does not require boosting and has minimal potential for drug-drug interactions. We did a 12-week trial with sovaprevir in combination with peg/riba and the results from these trials indicate that 1625, in combination with peg/riba, provides SVR12 at 80% -- 80% to 85%, depending on the dose that is used.

So we have 2 compounds in our portfolio now, which are 1625, a protease inhibitor, and 3102, which is an NS5A inhibitor. And the base case in our value proposition is that development of 3102 and sovaprevir, in combination with ribavirin or without ribavirin, for treatment of genotype 1 patients. The Phase II trials with this combination will begin second quarter of this year, and there are multiple Phase II trials that we are undertaking from now and about 15 months. And these trials, in these trials, we will be exposing about 500 patients by third quarter of 2014, and the first results are expected in summer of 2013 from this particular combination.

In terms of capitalization, we are very well-funded. We have about $220 million in cash. And our top 5 shareholders are listed on this slide. We have a number of milestones that are coming up in 2013, which include data from 3102 and ribavirin, as well as data from sovaprevir and NS5A combination.

So to summarize, based on the compounds that we have in our portfolio, as well as the strategy that we have put in place, we believe that we are well-positioned to provide therapies for different HCV patient populations, as well as different HCV genotypes. We will be reporting clinical trial results throughout 2013, and our goal is to rapidly advance optimal treatment regimens and to compete globally in this very important HCV market. Thank you.

Unknown Analyst

Thank you very much, Milind. The breakout session will be held at the New York [indiscernible] room, which is across from your hallway.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Achillion Pharmaceuticals' Management Presents at Barclays Global Healthcare Conference (Transcript)
This Transcript
All Transcripts