Achillion May Soar On ACH-1625 Approval

Achillion Pharmaceuticals (ACHN) has no FDA approved drugs on the market. Achillion is currently focusing on developing its hepatitis C drug ACH-1625, which is ending Phase 2 clinical trials. There is one bacterial infection antibiotic and four additional hepatitis C drugs in Achillion's pipeline. ACH-1625 is currently in very promising standing. If ACH-1625 gains FDA approval, Achillion could possibly gain an edge in the hepatitis market and see upside momentum. However, ACH-1625 is only just finishing Phase 2 and releasing results.

I always strongly advise against investing in any company with promising drugs that have not been FDA approved. ACH-1625 started Phase 3 clinical trials at the start of 2012, so do not expect the drug to be released on the market until the end of 2013 or the beginning of 2014. Phase 3 trials generally take a year at the least and new drug application for the FDA takes an additional few months. Share price will only rise or fall according to this timeline. Therefore, the Phase 3 clinical results will make or break Achillion's future prospects.

The clinical results of ACH-1625 were very positive. The study consisted of 60 hepatitis C infected patients receiving a daily dose of ACH-1625. The study lasted for 12 weeks and the data for 35 patients was released. By week 12, 100% of patients treated were virus free. While most patients were genotype 1a/b, there were also patients with IL28B genotype CT/TT - which is a much more difficult viral strain to treat. This shows the efficacy and effectiveness of ACH-1625. As far as safety goes, there was one serious adverse reaction. However, this was decided to be unrelated to ACH-1625. All other side effects were monitored closely and resolved quickly. Overall, it appears that ACH-1625 is a safe and effective drug. It is in good standing to be approved by the FDA.

Achillion will face competition from Johnson & Johnson (JNJ) and its hepatitis C drug TMC435. The clinical results of TMC435 show that the drug is effective, but not as much as ACH-1625. The TMC435 trials were split into patients that were relapsed patients, null responders, and partial responders after receiving some other hepatitis treatment. The previously relapsed group showed that over 92% of patients had no sign of the virus after 24 weeks of treatment with TMC435. Over 83% of the partial responders had no signs of the virus after 24 weeks of treatment. Lastly, over 70% of previously null responders had no trace of the virus after 24 weeks. Adverse side effects caused 6% of patients to discontinue treatment. TMC435 also caused decreased numbers of hemoglobin, white blood cells, red blood cells, and platelets in the body. While TMC435 seems to be effective, it is not as effective or safe as ACH-1625. I doubt TMC435 will be approved by the FDA as long as it has these side effects.

GlaxoSmithKline (GSK) has the FDA-approved hepatitis C compound drug Promacta, which could be competition for Achillion. Promacta is strictly used to treat thrombocytopenia in hepatitis C patients and is generally compounded with another hepatitis C fighting drug. If the FDA approves ACH-1625, it could cause Promacta to become obsolete. ACH-1625 can treat hepatitis C virus directly without compounding other drugs. I feel that ACH-1625 would out-compete Promacta due to the fact that doctors prefer to avoid prescribing drug cocktails to treat patients. I doubt GlaxoSmithKline will provide much competition.

Roche Holding AG (OTCQX:RHHBY) is developing Mericitabine and two other hepatitis C drugs in its pipeline. Mericitabine is currently in Phase 2 testing and will not be available on the market until the end of 2014. Of course this is assuming his is assuming that Mericitabine passes FDA regulation. The Phase 2 clinical trials reported that by week 24 of treatment, 91% of patients had an undetectable remainder of the hepatitis C virus. However, 24% of these patients relapsed after 12 weeks post-treatment. There were no serious side effects reported from treatment with Mericitabine. With the relapse rate of patients I doubt Mericitabine would beat ACH-1625 on the market. If ACH-1625 does not gain FDA approval, Mericitabine would be the next best to invest in if Mericitabine is FDA approved in 2013.

ACH-1625 had 100% effectiveness in its last trial and no patients have yet to relapse. This makes ACH-1625 a much more valuable and desirable drug than any of its competitors. Although it still waits to be seen if the FDA will approve ACH-1625, all signs point to yes. Achillion will corner the hepatitis market with this drug worldwide, and its competitors will not have much to fight back with, if anything at all.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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