Hepatitis C: Medivir Creates Runway for TMC435

Medivir Creates Runway for TMC435 with $41M Placement

By Nuala Moran

BioWorld International Correspondent
LONDON – Medivir AB raised €30.8 million (US$41 million) in a private placement that brings in international institutional investors in the lead up to the start of Phase III trials of the lead product, TMC435, a protease inhibitor for treating hepatitis C (HCV) infections.

"The strategy is to broaden the shareholder base outside Scandinavia," said Rein Piir, CFO. All the new shareholders are, "high-quality, top-rank, U.S., Swiss, Dutch and UK investors," he told a teleconference held to discuss the placement.

In total, Huddinge, Denmark-based Medivir issued 2.25 million new shares at SEK125 ($18.23) each to 30 international institutional investors, plus some institutions in Sweden that were not already shareholders.

That represented a 7.9 percent dilution for existing investors. More than two-thirds of the new shares were taken up by international investors. Medivir is quoted on the Nasdaq OMX Exchange in Stockholm.

"This will enable Medivir to strengthen its R&D and take a higher amount of value going forward, by doing joint ventures rather than licensing, and [allowing us to] take products further," Piir said.

Medivir announced its intention of doing the placing in March when it sought approval from shareholders, but its ability to do so rests on positive Phase IIb data for TMC 435. The product is partnered by Johnson & Johnson subsidiary Tibotec Pharmaceuticals Ltd., with Medivir retaining rights in Nordic markets.

Last month, Medivir announced positive interim data from Aspire, a Phase IIb study of TMC 435 as a once-daily therapy in 462 HCV patients who had been treated previously with pegylated interferon (peg-INF).

TMC 435, added to standard of care, increased the number of patients whose HCV levels were undetectable at 24 weeks.

Across four treatment groups, between 79 percent and 86 percent of patients were able to stop taking any therapy at 24 weeks. Patients in the study were infected with genotype 1 HCV, which is hard to treat.

The product also had positive results in a 386-subject Phase IIb study in treatment-naïve patients, which reported in July. Here, 83 percent of those treated with TMC 435 were able to stop all therapy at 24 weeks.

Those results were presented by Tibotec at the Annual Meeting of the American Association for the Study of Liver Diseases (AASLD) in Boston, in October.

"We witnessed enthusiasm for TMC435 at the AASLD clinical meeting, which together with positive Phase IIb Aspire results, boosts our confidence and price target, by 6 percent," noted Peter Welford, equity analyst at Jeffries in London

The shares closed at SEK120 on Dec. 3, the day the completion of the placing was announced. Welford added that Medivir is, "The European biotech best placed to benefit from broad enthusiasm for the wave of new blockbuster hepatitis C therapies reaching the market."

Building on the success of TMC 435, the company has other HCV products coming through its pipeline. "Investors are supporting Medivir in efforts to become a leading player in HCV," Piir said.

The company also intends to apply its technology to new therapeutic areas. "We are in discussion on [doing] this in a joint venture structure," Piir added.

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Published December 8, 2010