Merck,Roche forge hepatitis C sales, research deal

MERCK-ROCHE/HEPATITIS (UPDATE 1)

 

Merck,Roche forge hepatitis C sales, research deal

 

* Merck, Roche reach nonexclusive deal on hepatitis drugs

* Companies decline to provide financial terms

* Analyst says deal may unfairly thwart rival Vertex drug (Adds details of deal, analyst concerns)

By Ransdell Pierson

NEW YORK, May 17 (Reuters) - Merck & Co Inc said on Tuesday Roche Holding AG will co-promote its new Victrelis hepatitis C drug in the United States and the companies will test combinations of their respective treatments for the potentially fatal liver disease.

The drugmakers did not provide financial terms, but Merck said the deal will not affect its expected returns from Victrelis -- the first in a new class of medicines that could transform treatment and reap blockbuster sales.

Merck and Roche already sell their own forms of pegylated interferon, an injectable protein that has long been used alongside anti-viral pill ribavirin to attack the hepatitis C virus. Roche's interferon, Pegasys, has bigger sales than Merck's brand, called Peg-Intron.

Victrelis, a pill that blocks the protease enzyme that hepatitis C needs to replicate, won approval from U.S. regulators on Friday.

A similar medicine from Vertex Pharmaceuticals Inc, called Incivek, is poised to win FDA clearance later this month. Industry analysts forecast sales of more than $1 billion annually for each drug, with most expecting the Vertex product to dominate the market.
Both Victrelis and Incivek will be used in a new 3-drug combination -- with either Pegasys or Peg-Intron, plus ribavirin. Both of the new drugs, when used in combination with current 2-drug therapy in clinical trials, have demonstrated far higher cure rates and often with far shorter treatment duration, than standard treatment.
"This does not change the economics of Victrelis for Merck," Merck spokesman Ian McConnell said, referring to the deal with Roche.
But he declined to say whether Roche would keep any sales or profit from Victrelis.
"It is unclear whether Merck can derive any benefits from co-promoting Victrelis with Roche," Sanford Bernstein analyst Geoff Porges said in a research note.
He said that is largely because both companies plan to continue to market their own interferons separately.
"The lack of clear commercial benefits and the collaboration of two incumbent competitors against a new entrant also raises concerns about the appearance ... of excluding Vertex from the hepatitis C market and could be grounds for Vertex to explore legal remedies," Porges said.
Roche spokeswoman Tara Iannuccilo said the deal with Merck was "nonexclusive," but declined to speculate whether Roche might also forge a marketing and research deal with Vertex.
"Beyond our agreement with Merck, we will not speculate on any potential deals," she said.
The Roche spokeswoman said a main objective for her company under the Merck deal is to "ensure and extend market leadership of Pegasys."
Moreover, she said Roche will also benefit by testing its already marketed drugs, as well as ones now in clinical trials, with Merck's molecules. (Reporting by Ransdell Pierson; editing by Andre Grenon)