Wednesday, January 25, 2012

Big Pharma:The Hepatitis C Race For Tolerable Therapies



 Today In The News 

Vertex Pharmaceuticals went from king of the hill in the treatment of hepatitis C to yesterday’s news in about six wild months. But while many on Wall Street say Vertex’s big drug will soon become obsolete, Vertex and its small partner in South San Francisco have quietly put themselves in position to defend a big share of this future multi-billion dollar market.

Cambridge, MA-based Vertex (NASDAQ: VRTX), which has significant operations in San Diego, is running a series of small clinical trials this year that will mix and match combinations of antiviral medicines against hepatitis C. These trials will help determine whether Vertex and its partner, South San Francisco-based Alios Biopharma, have hit upon a combination of drugs that can raise the cure rate, and reduce side effects, for millions of patients with this liver-damaging virus.
While Vertex’s new drug has been a huge step forward in the past year, the ultimate way to fight the fast-mutating virus, many scientists believe, will be by putting together a cocktail of antivirals that attack hepatitis C from multiple angles like with HIV.

“There isn’t one magic pill that will solve the problem,” says Vertex CEO-to-be Jeff Leiden. “It’s clear the HCV space will evolve into different combination treatments for different patients. It’s not yet clear what the best combination is going to be. What you want is to have the component parts in your company so you can put them together.”

The hepatitis C world saw dramatic upheaval in the past year as researchers learned more about antivirals in development. Vertex won FDA approval in May for its new protease inhibitor, telaprevir (Incivek), which doubled the cure rate to about 80 percent for new patients when given in tandem with standard pegylated interferon alpha and ribavirin. About 25,000 people rushed in to get treated with the new combo regimen in its first seven months on the market, generating hundreds of millions in cash flow per quarter for Vertex, and pushing it into the black.

Exciting as it all was for physicians, patients, and Vertex shareholders, the company was soon upstaged. Researchers have long been looking for a way to get rid of the injectable interferon part of the regimen, which causes nasty flu-like symptoms that people must endure for months. To go beyond combo therapies (like the one from Vertex and another from Merck that include injectable interferon), the next step is to hit the hepatitis C virus with not just protease inhibitors, but also drugs from other classes—nucleotide polymerase inhibitors, and non-nucleotide polymerase inhibitors.
Princeton, NJ-based Pharmasset (NASDAQ: VRUS) stole the show last November at the American Association for the Study of Liver Disease when it said its nucleotide polymerase inhibitor cured all 40 patients with certain hepatitis C genotypes in a small study—a result that led to its $11 billion acquisition by Foster City, CA-based Gilead Sciences (NASDAQ: GILD). A few weeks later, another maker of drugs in that class, Alpharetta, GA-based Inhibitex (NASDAQ: INHX), got bought by Bristol-Myers Squibb for $2.5 billion. Separately, Bristol-Myers Squibb released some more promising clinical results from its own pipeline just last week.

Those developments got everyone talking about a new paradigm in hepatitis C, which many on Wall Street believe will leave Vertex in the dust. Jason Kantor, an analyst with RBC Capital Markets in San Francisco, said in a Dec. 19 note to clients that “the consensus view is that Vertex’s HCV franchise will essentially go to zero beyond 2015.” Vertex stock has dropped almost 40 percent in the past year, down from its 52-week high of $58.87 to $35.86 at yesterday’s close.
While Leiden has spent much time talking with investors about Vertex’s other drugs in development—particularly one expected to hit the market this year for cystic fibrosis—he says the company isn’t about to surrender in the hepatitis C market. He has a plan intended to allow Vertex to compete beyond 2015, when the first all-oral, interferon-free regimens are expected to could come along and replace today’s standard of care.

Sometime before the end of March, Vertex expects to see results from an early-stage study of an all-oral combo regimen of telaprevir (a non-nucleotide polymerase inhibitor called VX-222 that it acquired from a Canadian company in 2009) and the usual ribavirin. If Vertex can cure about 75 percent to 80 percent of patients with this cocktail, and reduce side effects by eliminating interferon, Leiden says the company would be ready to go to pivotal clinical trials this year with its own all-oral combination.

“If we can do that, it will be a very exciting result. If you take that regimen into pivotal trials, now we’re talking about 2014 to finish those trials,” Leiden says.
And that isn’t the only combo Vertex has in mind. Within weeks--Continue Reading … Next Page »

Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. E-mail him at ltimmerman@xconomy.com or follow him on Twitter at twitter.com/ldtimmerman.  

 Seeking Alpha 
 The announcement by Bristol-Myers Squibb (BMY), just over two weeks ago, on January 7th, of an agreement to buy Inhibitex (INHX) for $2.5 billion at a massive buyout premium of over 160%, has ignited a rally among biotech companies that are currently active in developing products targeting hepatitis C virus (HCV). In this article, we examine based on our research of their latest available Q3 institutional 13-F filings, the investment activities of the world's largest funds or mega funds among a dozen pharmaceutical and biotech companies that are active in the HCV space.
These mega fund managers hold between $100 billion and over a trillion dollars in assets, such as Fidelity Investments, Goldman Sachs, and Vanguard Group, and together they control almost a third of the assets invested in the U.S. equity markets, but number just over 30 out of the tens of thousands of funds that invest in the U.S. equity markets. Individually, and collectively, they pack enough firepower to move stocks based on their trading activities.
Taken together, these mega managers were bullish on the group, adding a net $427 million in Q3 to their prior $178.84 billion prior quarter holdings in the group. However, taking out the big pharmaceutical companies, mega funds still added a net $530 million in Q3 to their $47.46 billion prior quarter position among the biotech companies that are active in the HCV field. (for more general information on these mega funds, please look at the end of the article).

The following are the HCV group companies that mega fund managers are bullish about (see Table):

Idenix Pharmaceuticals (IDIX): IDIX engages in the discovery and development of drugs for the treatment of human viral and other infectious diseases, including a focus on hepatitis C virus, hepatitis B virus (HBV), human immunodeficiency virus (HIV) type-1, and acquired immune deficiency syndrome (AIDS). Mega funds added a net $45 million in Q3 to their $380 million prior quarter position, and together they hold 29.7% of the outstanding shares, higher than their 26.3% weighting in the group. The top mega fund buyers in Q3 was by Fidelity Investments ($50 million), and the top holders were Fidelity Investments ($131 million), T Rowe Price ($114 million) and Vanguard Group ($50 million).
IDIX shares have mounted a strong rally recently, up more than 100% in the past twelve trading days, benefiting from both the January 9th announcement of the acquisition of rival INHX by BMY that has ignited a rally in the group, as well as positive interim phase 2b clinical trial data on its HCV Nucleotide Inhibitor, IDIX 184, that was released the same day by the company.
Dynavax Technologies (DVAX): DVAX is a clinical-stage biotech company that is engaged in the discovery and development of novel products to prevent and treat infectious and inflammatory diseases. Its lead clinical stage product candidate is HEPLISAV™, a phase 3 investigational adult hepatitis B vaccine designed to provide protection with fewer doses than current licensed vaccines. In addition it has early stage product candidates, including a universal flu vaccine in phase 1, TLR inhibitor for lupus in phase 1, and then hepatitis B and hepatitis C therapies, also in phase 1 development.

Mega funds added a net $7 million in Q3 to their $102 million prior quarter position, and taken together they hold 25.8% of outstanding shares. The top mega fund buyers were Fidelity Investments ($3.3 million) and Bank of America Corp. ($1.6 million), and the top holder by far was also Fidelity Investments ($64 million). DVAX is currently engaged in preparing to submit its first Biologics License Application (BLA) for HEPLISAV™ Hepatitis B Vaccine to the FDA in the first quarter of 2012, followed soon by a submission of Marketing Authorization Application (MAA) for European approval.
Peregrine Pharmaceuticals (PPHM): PPHM is a clinical-stage biotech company developing and manufacturing innovative monoclonal antibody therapeutics to treat cancers and viral infections such as hepatitis C virus. In the hepatitis C space, the company is evaluating bavituximab combined with ribavirin in a randomized phase 2 trials in treatment native patients with genotype-1 HCV infection. Earlier, the company released preliminary phase 2 trial results from this study on December 29th last year that showed antiviral activity and a positive safety profile, with patients reporting fewer side effects than in the interferon-containing arm. Mega funds added a net $1 million in Q3 to their $8 million prior quarter position, and taken together mega funds hold 11.4% of the outstanding shares, with the top holders at the end of Q3 being Barclays Global Investors ($2.7 million) and Blackrock ($1.7 million).
The following are the HCV group companies that mega fund manager are most bearish about (see Table):

Vertex Pharmaceuticals (VRTX): VRTX engages in the discovery, development, and commercialization of small molecule drugs for the treatment of hepatitis C, cystic fibrosis, epilepsy and other life-threatening diseases. It has two FDA-approved drugs, INCIVEKTM for treat chronic hepatitis C genotype-1 infection in adults with stable liver problems, who have not been treated before or who have failed previous treatments, and Lexiva for HIV that it co-discovered with GlaxoSmithKline (GSK).

It has five other drugs in clinical development, including VX-222 in phase 2 development for hepatitis C, VX-765 in phase 2 development for epilepsy, VX-509 in phase 2 development for immune-mediated inflammatory disease, and VX-770 and VX-809 in phase 3 and phase 2 development respectively for Cystic Fibrosis. Mega funds cut a net $110 million in Q3 form their $3.89 billion prior quarter position. The top sellers were Fidelity Investments ($91 million) and T Rowe Price ($34 million), and the top holders were Fidelity Investments ($966 million) and Capital World Investors ($653 million).

Achillion Pharmaceutical (ACHN): ACHN is a clinical-stage biotech focused on developing new treatments to patients with infectious diseases, including HCV and resistant bacterial infections. It currently has five compounds in various stages of clinical development targeting HCV, including one in phase 2, two in phase 1 and two others in pre-clinical development. Mega funds cut a net $6 million from their $280 million prior quarter position, with the top seller being Bank of New York Mellon Corp. ($18 million), and the top holder being Fidelity Investments ($111 million). ACHN shares rallied strongly after the announcement of the INHX acquisition by BMY, up over 50% in the five trading days after the January 7th announcement; while they have given back part of their gains, they are still up over 35% on the news.

Inhibitex Inc. and Bristol-Myers Squibb Co.: INHX, a developer of differentiated anti-infective products to prevent and treat serious viral and bacterial infections, including primarily shingles and chronic infections caused by hepatitis C virus, is under agreement to be acquired by BMY, a developer of branded pharmaceuticals for the treatment of cardiovascular, virological and other infectious diseases. Mega funds cut $28 million in Q3 from a $512 million prior quarter position in INHX, and they added a net $711 million to their $20.51 billion prior quarter position in BMY.
Other pharmaceutical and biotech companies that are players in the HCV space that mega funds are bearish on (see Table) include Gilead Sciences Inc. (GILD), that has multiple product candidates in phase 1 and phase 2 trials targeting hepatitis C, in which mega funds cut a net $306 million in Q3 from their $17.68 billion prior quarter position, and Abbott Laboratories (ABT), that has a product candidate in phase 2 clinical trials for HCV in collaboration with Enanta Pharmaceuticals, in which mega funds cut a net $16 million in Q3 from their $26.63 billion prior quarter position.
Also, additional HCV players that mega funds are bullish about include Merck & Co. (MRK), that has an FDA-approved product Victrelis for HCV in the market, and several in phase 2 and 3 development for hepatitis B and C, in which mega funds added a net $530 million to their $47.46 billion prior quarter position; and Pfizer Inc. (PFE), that has a compound in phase 2 development for HCV, in which mega funds added a net $60 million to their $54.03 billion prior quarter position. Furthermore, mega funds have a $1 million position, unchanged in Q3, in Inovio Pharmaceuticals (INO), that has compounds in phase 2 and preclinical development targeting HCV....Continue Reading...

 By Tal Barak Harif
Jan. 25 (Bloomberg) -- BioLineRx Ltd. surged in New York trading, widening the premium versus its Tel Aviv shares to a record, on bets the biopharmaceutical company will be acquired following its licensing agreement for a hepatitis C treatment.

BioLineRx’s American depositary receipts jumped 69 percent on the Nasdaq Stock Market yesterday, swelling the premium to the Israeli stock to 28 percent. The Tel Aviv shares soared 25 percent at 10:28 a.m. in Tel Aviv today. The Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York rose 0.1 percent to 92.53. Check Point Software Technologies Ltd. led gains after Topeka Capital Markets Inc. recommended buying shares of the maker of network security equipment.

BioLineRx’s agreement with French company Genoscience to develop and sell a hepatitis C pill treatment boosts the odds that the Jerusalem-based company will be bought, according to Morgan Joseph TriArtisan Group. Bristol-Myers Squibb Co. and Gilead Sciences Inc. announced $13.3 billion of acquisitions in the past two months to buy developers of hepatitis treatments.

“The fact that BioLineRx now has a highly novel hepatitis C drug in its armory should make the company an appealing target for strategic partners,” Raghuram Selvaraju, a New York-based equity analyst at Morgan Joseph TriArtisan, said by e-mail yesterday. “The hepatitis C viral infection space is an area that has been particularly hot recently.”

The Bloomberg Israel-US 25 Index has gained 10 percent this year, outperforming the Nasdaq Composite Index’s 7 percent advance and the Standard & Poor’s 500 Index’s 4.5 percent increase. A 14 percent jump in Teva Pharmaceutical Industries Ltd., the world’s largest maker of generic drugs, has helped pushed the Israel-US 25 higher. The TA-25 stock index rose 0.3 percent to 1,126.06 today.

BioLineRx ‘Euphoria’

Bristol-Myers, a biopharmaceutical company based in New York, said on Jan. 7 it would pay about $2.5 billion in cash to buy Inhibitex Inc., which is developing an oral drug called INX-189 for treating hepatitis C. Pharmasset Inc., based in Princeton, New Jersey, agreed to be acquired by Gilead Sciences for $10.8 billion in a deal announced on Nov. 21.

Gilead, the world’s largest maker of HIV drugs, offered the highest premium on record for a drug takeover of comparable size, according to data compiled by Bloomberg.

As many as 170 million people worldwide carry the hepatitis C virus, a blood-borne disease that can lead to liver cirrhosis and cancer, according to the Centers for Disease Control and Prevention in Atlanta. The market for medicines to treat the disease is about $3 billion worldwide, said Andrew Berens, a senior health-care analyst with Bloomberg Industries.

“The euphoria you’re seeing is mostly related to the fact that the announcement makes the company an acquisition target,” Berens said in a phone interview from Skillman, New Jersey. “An oral drug is what everyone is trying to develop because the current injection treatments are toxic and cumbersome.”

Volumes Surge

BioLineRx’s ADRs rose to $5.55 yesterday after the shares in Tel Aviv climbed 37 percent to 1.65 shekels, or the equivalent of 44 cents. One ADR represents 10 shares. The Tel Aviv shares rose to 2.06 shekels, or 55 cents, today.

Phone messages and e-mails sent to Garth Russell, a spokesman for BioLineRx from an external public-relations company, seeking comments on a potential buyout weren’t returned.

Trading volumes on the stock soared yesterday, with more than 6 million BioLineRx ADRs exchanging hands, compared with an average of 7,000 trades a day, according to Bank of New York Mellon Corp.

The Israeli biopharmaceutical company, whose largest shareholder is Teva, listed the ADRs on the Nasdaq Stock Market on July 25... Continue Reading...

Pharmasset’s Hepatitis C Drug: How it Could Change Australia
By Lord Jorrel Polintan | January 25, 2012 2:41 PM EST

Finding cures for diseases is always a tall order to take up on, but to have a drug that can cure a disease without fail is almost too good to be true. That is why when the news that Pharmasset Inc. is working on a drug that can cure hepatitis C without fail, people started buzzing, and wondered how a sure fire drug could affect the world, but more importantly, Australia.

Hepatitis C is infamous world-wide for being a virus that can cause liver inflammation and liver disease. With more and more people getting the disease, especially in Australia, a cure for it would be a heaven sent. In response to this problem, a new drug is being developed.

And in the study that was conducted by the company, 40 patients who received the experimental drug were responsive after 12 weeks, and that just after 24 hours, around half of the patients were all cured of hepatitis C, Bloomberg reported. Though being criticized by the number of patients it was tested on, the results are still very impressive and promising.

At present, some cases of hep C infection may clear up without treatment and are only asked to avoid alcohol and medications that might affect the liver. However, generally, those with liver abnormalities due to the infection undergo 24 to 48 weeks of treatment consisting of pegylated interferon alpha and the antiviral drug ribavirin, according to the American Family Physician.

What with a drug that can cure hepatitis C and Australia's growing problem with the disease, the drug could significantly change the playing field. According to the Australian Hepatitis C Support, in 2006, about 1% of the population, or 271,000 people, were exposed to the virus, and that there were 12,500 people diagnosed with hepatitis C infection.

But now, things have changed. According to the Annual Surveillance Report 2011 of the University of New South Wales, there is an estimated 221,000 people living in the country with chronic hepatitis C infection, which includes 48,000 with moderate to severe liver disease.

Even with the various programs and efforts in Australia, such as the Fourth Community Pharmacy Agreement which funded $10.3 million for the preventions and reduction of the transmission of the virus, or the Hepatitis C Public Health Promotion Program which was developed to increase awareness and accessibility of information about the virus, the number of those with the virus is rising.
And with current treatments lasting longer periods of time than that of the drug being developed, the sooner the drug comes out, the sooner will the numbers go down.

In trying to reach out for comments, Gilead Sciences, now the mother company of Pharmasset Inc., told International Business Times that having just completed acquisition of Pharmasset, Gilead is now in the process of integrating the hepatitis C drug into their pipeline and determining timelines and their next step.

After all is said and done, the world could soon see a readily available drug in the market that can cure hepatitis C completely.
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