Roche: New Era Of Hepatitis Therapies

Roche: New Era Of Hepatitis Therapies Creates Short-Term Threat, Long-Term Opportunity

By Michael Fitzhugh

Roche (RHHBY.PK) says it plans to pay $230 million for Anadys Pharmaceuticals (ANDS), a San Diego-based developer of small molecule therapeutics for the treatment of hepatitis C. Anadys’ compounds could bring Roche closer to a cure for the viral infection, or at least closer to interferon-free treatment regimen, says Jean-Jacques Garaud, Global Head of Roche Pharma Research and Early Development.

Setrobuvir, Anadys’ most advanced drug candidate, is an oral drug in mid-stage clinical testing in combination with Roche’s injectable pegylated interferon, Pegasys, and its brand of ribavirin, Couperus.

The company is also developing ANA773, an oral, small-molecule inducer of innate immunity. That compound is in early-stage trials and may prove useful for treating hepatitis C as well as other chronic infections and cancer, Roche says.

Anadys shareholders will get $3.70 per share in the all-cash transaction, representing a 256 percent premium to the closing value of their shares on October 14.

A new era of interferon-free hepatitis therapies creates both a short-term threat and a long-term opportunity for Roche. In 2010, the company made $1.8 billion (CHF 1.6 billion) from sales of Pegasys. But Pegasys loses patent protection in 2017 and a new wave of oral hepatitis therapies is likely to become the new standard of care by then, sparing patients from interferon’s flu-like side effects and delivery method by injection.

Abbott Laboratories (ABT), for instance, says that by 2015, it expects an interferon-free combination therapy it is testing could generate as much as $2 billion in sales annually.

Roche has been active in seeking to develop and promote new therapeutic combinations incorporating its own products. In May, it agreed to help Merck (MRK) promote its new hepatitis C therapy, Victrelis, which is taken with both a pegylated interferon and ribavirin, such as those in Roche’s portfolio.

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