Achillion Pharmaceuticals' Management Presents at UBS Global Healthcare Conference (Transcript)

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

UBS Global Healthcare Conference

May 21, 2013 3:30 pm ET

Executives

Mary Kay Fenton - Chief Financial Officer, Principal Accounting Officer, Senior Vice President and Secretary

Analysts

Matthew Harrison - UBS Investment Bank, Research Division

Matthew Harrison - UBS Investment Bank, Research Division

Afternoon, everybody. I'm Matthew Harrison, one of the biotech analysts here at UBS. Happy to have Achillion presenting next. And we have the Chief Financial Officer, Mary Kay Fenton presenting. Thanks.

Mary Kay Fenton

Good afternoon, everyone. Thanks, Matthew, for having us this afternoon, and thank you for spending some time with Achillion. Let me see if I can just drive the presentation here.

Well?

Matthew Harrison - UBS Investment Bank, Research Division

The green button on the controller.

Mary Kay Fenton

Yes. Ah. Thank you very much. So I do have to remind you, before we begin, that I will be making some forward-looking statements. And I need to remind you about the standard risks that are associated with those statements, and those are fully outlined in our SEC filings, which you can find at our website, achillion.com, or you can find those at sec.gov as well.

And before I begin a review of both our market and our pipeline. I'd like to focus your attention just on a few key points that are -- new points from our recent conference presentations, and they really focus around sovaprevir, our protease inhibitor; and ACH-3102, our NS5A inhibitor, which we very strongly believe each possess in their respective classes best-in-class attributes. And they are being combined at the moment in the clinical trial that is designated -007, and that 12-week trial has now been initiated. We announced that recently, and we plan on having interim results from that clinical trial early in the third quarter of this year. Enrollment is proceeding just as we would have hoped, and we are on target for being able to release RVR, or rapid viral response, from that trial in the very near term.

We are also, in addition, modifying existing studies, both -007 and its successor trial, APOLLO C, to incorporate 8-week and 12-week treatment regimens without ribavirin, and each of those are expected to be initiated in the summer of 2013 as well. And we've been able to pull those arms of that clinical trial forward from the fall of 2013 to be initiated a little bit earlier in order to get those results.

We continue to accelerate our development program with all speed because we have a keen focus on initiating Phase III clinical trials in the second half of 2014. And in order to facilitate that objective, of starting those registrational trials in the fall of 2014, we have just also recently announced the enhancement of our clinical and clinical operations teams. We recently announced the addition of Dr. David Apelian as our Chief Medical Officer, who will be joining us; as well as the addition of Mr. Kevin Kucharski, who is the former Head of Clinical Operations for Pharmasset. And since the time of his hire with us, he's also brought in key members of his former team with him. And so we now believe that we are well poised on the clinical operations and clinical development front to be able to execute our objectives.

I will spend just a little bit of time on how we see the HCV market, and that's all predicated on the heterogeneity of the HCV patient population. And that goes beyond just the 7 genotypes as well as subtypes that are inherent across HCV patients, but also things such as -- the degree to which patients have cirrhotic livers, both cirrhosis and fibrosis for that matter, as well as other concomitant infections like HIV and concomitant medications that are being dosed across several medical conditions, which can influence the regimen, the HCV regimen that these patients are ultimately put on. We think that our compounds are very easily dosed with a number of other medications, an advantage over other therapeutic regimens that are currently being tested. The degree to which patients have been on other treatment regimens in HCV, as well as the geographic variability among HCV patients are all examples of this diversity, and we believe that there will be multiple regimens that can and will participate in the market because of the heterogeneity of this HCV population.

We see the HCV market shaping up substantially as depicted here. This as a result of a recent commercial model that we commissioned by a group out of Boston, and I think you'll find the numbers here that -- quite familiar to some of you, if you've been reviewing analysts' reports. I think we are finally now honing in on a mean of what people anticipate the HCV market to look like over time. We do see the HCV market unfolding in waves with the introduction of interferon-free therapies, and we believe that the peak of about 350,000 patients across the U.S. and EU will occur some time between 2018 and 2021, with that peak diminishing over time but not at a steep slope. We do believe the market will remain robust through 2030 with over 150,000 patients dosed in the U.S. and EU5, even out as far as 2030. And that -- and when you think about that being a number that's about 3x higher than it currently is, of being dosed with DAAs, that certainly represents a very substantive market, well over $6 billion even 20 years -- or I'm sorry, 17 years out from now.

So I will go through the 2 very significant and important elements of our pipeline. I'll begin with ACH-3102, our NS5A inhibitor.

Our interest in NS5A inhibitors actually has been long-standing. Our Chief Scientific Officer, Milind Deshpande, actually joined us from BMS, where he was instrumental in developing their NS5A program.

And it's clear why companies like Achillion would be interested in the NS5A mechanism. The key attributes clearly are the very -- the peak of molar potency of these compounds, the ability of the compounds to intervene at multiple stages in the viral life cycle and to the conversion of the drug to be active. Metabolite isn't required unlike nucleosides and therefore, the drugs in this class have the ability to address virus that is existing outside the liver or in extrahepatic reservoirs.

Some of the challenges, however, in developing NS5A inhibitors, is they have a historically low genetic barrier to resistance, and there's very often on-treatment emergence of resistance and breakthrough. So our goal is to design -- keeping the best attributes of the NS5A inhibitors but design around the high barrier to -- or develop a high barrier to resistance, rather.

So if I could show you this picture in 3 dimensions, which we could do back at our offices in New Haven, you would see that the first generation -- the rough structure of first-generation NS5A inhibitors is shown above in red. But by contrast, we were able to design around, in a 2-dimensional fashion, this -- engineering some key structural changes to optimize against the development of drug resistance. And what you would see in that middle section of the blue molecule on the bottom half of your depiction is -- that part of the molecule is biplanar, and that's what we believe to be the source of the optimized activity of this compound against resistant variants.

This compound was put into the clinic in humans for the first time just about one year ago. A summary of our Phase I development program is shown here. We started with healthy volunteers in both single and multi-ascending dose trials going up to 14 days. We dosed up to 1,000 milligrams, and the drug was found to be safe and well tolerated. Interestingly, the compound has about a 240-hour half life. And fortunately, for us, the PK is actually quite linear and predictable. So we are dosing ACH-3102 with a loading dose and then a low once-daily dose thereafter.

Our proof-of-concept trial in HCV-infected patients was done in the fall, and we trusted genotype 1a treatment-naive patients at doses ranging from 25 up to 300 milligrams once. And that's not once daily, that's literally once, and noted an average 3.85 log reduction in viral RNA with a reasonably tight range going up to 4.6. The drug, again, was safe and well tolerated.

So we then proceeded to dose 3102 in a single DAA study along with ribavirin, which was actually a quite unique trial design and was approved by the FDA. And our goals through this trial were to: establish the 12-week safety and tolerability of the compound, assess the compound's high barrier to resistance that we saw in vitro in the lab, and also to evaluate and achieve SVR4 and SVR12.

In the results you'll see, depicted here, we've dosed 8 patients for a course of 12 weeks. You'll see along the bottom of the graph the lower limit of quantitation and the lower limit of detection. And what we demonstrated is the compound was very active, reducing viral load substantially in all patients over the first week. In fact, very many patients had very substantive reductions in viral RNA after only one day of dosing. And ultimately, we achieved a 75% RVR rate and a 63% SVR4 rate.

We had some very unique patients in this trial. You can see that the 2 patients who are on the upper side of this graph demonstrated significant viral load reduction. But because of some of the multiple mutations that were inherent in these patients in their virus at baseline, they ultimately did not achieve SVR4. But nonetheless, we were very keen to see the viral reduction even despite these baseline mutations.

So the safety assessment after 12 weeks of dosing was that ACH-3102 appears to be very safe. It was exceptionally well tolerated by patients as reported by investigators. 3102 demonstrated very rapid viral suppression in the early phases of dosing and maintains that with no viral breakthrough on treatment, and we were able to show viral suppression even in the presence of multiple NS5A-resistant mutants. So we were -- we very much consider that trial a positive outcome for 3102 and for us.

Moving on to sovaprevir, which is the lead compound in our protease inhibitor program. Sovaprevir was previously named ACH-1625, so forgive me if I revert to its non-generic name. But we believe sovaprevir continues to have the best-in-class profile of protease inhibitors with its high potency; it's specificity for HCV; it's improved barrier to resistance, notably in the Q80K mutation that would be common to other protease inhibitors; and what we saw in some early clinical trials and it's pan-genotypic activity, even so far as genotype 3.

It's PK and metabolism would indicate that it's very adequately dosed once daily without boosting by ritonavir, and there's a minimal potential for drug-drug interactions. So far, it's been safe and well tolerated through Phase II, and you'll see in the next Slide a depiction of the Phase II trial that we ran last year in combination with pegylated interferon and ribavirin, testing 3 doses of sovaprevir 200, 400 and 800 milligrams once daily with peg riba; and in a response guided treatment algorithm, treated patients who were successfully treated out either 12 weeks incrementally with peg riba, or 36 weeks incrementally with peg riba.

We tested approximately 60 patients across multiple sites in the U.S. and the EU, and these were all treatment -- genotype 1 treatment-naive patients. We were able to demonstrate in this trial that sovaprevir in a response-guided treatment fashion demonstrated SVR12 ranging from 77% to 85% across the doses, and we plan on moving forward with both the 200 and the 400-milligram equivalent doses in combination treatment with 3102.

So to summarize, of our 2 components in the combination treatment regimen we're currently testing, sovaprevir has been demonstrated safe and well tolerated in a 12-week Phase II trial. A DDI study with ACH-3102 has been completed and has been completed satisfactorily with minimal interactions. We are currently running multiple drug-drug interaction studies. Several are completed and many more are in process so that we can dose sovaprevir in patients who are also taking other concomitant meds. FDA has since approved a combination study with 3102 at the doses. I suggested the 200 and the 400 and to date, the 360 patients have been treated.

A tablet formulation for sovaprevir has been completed. And in a preclinical setting, we've completed 3-, 6- and 9-month toxicology studies, and the ADNI profile supports combination development with 3102 and other compounds as well.

3102, again, a 12-week trial has been completed, underway with ribavirin, as I mentioned a moment ago; and DDI with sovaprevir has been completed. 160 subjects have been treated to date. And regarding 3102, a tablet formulation has been initiated, although it's not yet completed. 3- and 6-month toxicology has been completed, and the ADNI profile supports combination development.

So all that being said, the combination treatment is underway, with RVR anticipated in the summer of 2013 and SVR anticipated in the fall of 2013. So very near-term milestones.

In the longer-term, our Phase II development program is shown here with the -007 trial outlined, having already been initiated. The -007 trial has 2 segments. The first segment treating 30 patients and the second segment treating also another 20 to 30 patients. And that second segment will include arms that do not have ribavirin over the course of 8-week and 12-week treatment regimens.

Moving from the -007 trial, we will initiate a trial we've designated as APOLLO C, which will be a worldwide trial, and that trial will have approximately 200 patients which will satisfy our objective of a safety database requisite to move into registrational trials in the fall of 2014. While APOLLO C is underway, we will also undertake additional studies in order to address the HIV co-infected population, as well as non-GT1 patients, as well as patients with cirrhosis.

For a little bit more detail on the sovaprevir 3102 plus ribavirin studies that is currently underway, you'll see the 2 segments that I mentioned a moment ago depicted here. The first segment of 15 patients will be dosed with sovaprevir at -- the 200-milligram dose, as well as 3102 at a going forward 50-milligram does and 150-milligram loading dose.

The next 15 patients will be dosed at the sovaprevir 400-milligram dose and the 3102 50-milligram dose. Segment 2, which we are in the process of amending pending regulatory approval, will have up to another 30 patients included without ribavirin and testing both sovaprevir and 3102 in 8- and 12-week durations. And again, just to reiterate, we have a near-term RVR milestone anticipated in the summer and a longer-term SVR milestone anticipated this fall.

The company's management team, you'll see depicted here, led by Michael Kishbauch, our President and CEO; as well as Milind Deshpande, who is with me here today. We recently added, as I mentioned earlier, David Apelian, our new Chief Medical Officer, who is joining us from -- having a track record at Bristol-Myers Squib, Schering-Plough and most recently, GlobeImmune.

We are a company that has the fortune of being well capitalized. We just recently announced cash and cash equivalents of over $200 million, very simple balance sheet with very little debt. And we are quite pleased with the quality of the shareholders that we've been able to gather with us and watch us as we proceed with developing our pipeline.

So to reiterate, Achillion holds what we do believe -- what we believe to be a highly competitive combination regimen with the components all in our own hands and near-term and longer-term milestones that we anticipate to be positive.

And with that, I will leave myself 5 extra minutes, and we will see you across the hall at the breakout session. Thank you.

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