By Deena Beasley
Source
LOS ANGELES (Reuters) Feb 24 - Gilead Sciences Inc made its name by becoming the leader for drugs against HIV, but a setback for its hepatitis C treatment has opened the door to rivals, making that market tougher to dominate.
Top global drugmakers and tiny biotech companies have over 100 compounds in clinical development to treat the liver-destroying hepatitis C virus (HCV), according to Thomson Reuters Pharma.
The field has attracted broad interest with two new hepatitis C drugs reaching the U.S. market in the past year. Both represent a breakthrough in treatment for a global patient population of up to 170 million.
Gilead and its rivals plan to improve on those medicines with pills that do not need to be combined with injections of immune system boosters such as interferon, which have side effects that can deter patients. They are all vying for a market expected to reach around $10 billion a year, but they may each end up with a smaller slice of the pie.
"We don't forecast permanent dominance in any class of HCV antivirals by any participant, including Gilead," Sanford Bernstein analyst Geoff Porges said.
Gilead spent $11 billion in January to buy Pharmasset and its lead hepatitis C drug candidate in a new class known as nucleotide inhibitors, hoping to be the first to market with an all-oral hepatitis treatment.
But the enthusiasm of investors for the deal was doused last week after Gilead said some patients taking the drug saw the virus return after four weeks. The company's shares are off nearly 20% since the announcement, giving back some of the 50% gain in the wake of the Pharmasset purchase.
Gilead's stumble may make way for rivals such as Bristol-Myers Squibb Co, which recently bought Inhibitex for $2.5 billion, or a premium of 163%, to boost its HCV portfolio. It has already fueled additional interest in much smaller competitors Achillion Pharmaceuticals Inc and Idenix Pharmaceuticals Inc.
GOAL IS ALL-ORAL TREATMENT
Traditional hepatitis C therapy requires a year of treatment with a combination of interferon and ribavirin. It can cure about half of treated patients, but harsh flu-like side effects prevent many from reaching that goal.
Greater knowledge of genetics and molecular function has led to several new classes of direct acting antiviral drugs, which are expected to revolutionize treatment.
"The goal is to go interferon-free over the next few years, and have an all-oral regimen that basically can eradicate the virus in over 80% of people who are infected in 12 to 24 weeks," said Dr. Fred Poordad, chief of hepatology and liver transplantation at Cedars-Sinai Medical Center in Los Angeles.
Dr. Poordad is involved in "about 90%" of current hepatitis C trials and sees several viable treatment regimens becoming available.
"This is not going to be a winner takes all type of thing," he said.
Around 3.2 million Americans -- mainly baby boomers -- have chronic hepatitis C, according to the U.S. Centers for Disease Control and Prevention. The rate of new U.S. infections has slowed to around 17,000 a year following the introduction of blood and organ donor screening in the early 1990s and greater awareness of the risk from shared needles.
The virus is often undiagnosed and contracted through contact with blood from an infected person. There may be few initial symptoms, but it is the leading cause of liver transplants and can cause liver cancer.
Hepatitis C killed more than 15,000 Americans in 2007, compared with a little over 12,700 deaths related to HIV, according to recent CDC statistics.
New drugs include protease inhibitors, which aim to block enzymes used by the viruses to cling to certain proteins; nucleotide or nucleoside inhibitors, also known as "nukes," which interfere with enzymes needed for viral replication; and blockers of NS5A, a protein essential to viral replication.
Two new protease inhibitors launched last year -- Incivek from Vertex Pharmaceuticals Inc and Merck & Co's Victrelis -- are still taken with interferon and ribavirin.
Gilead's GS-7977, a nucleotide inhibitor, was supposed to work without interferon. But the latest data on patients who have not responded to earlier treatment showed the drug may need to be combined with additional antiviral medications.
Bristol-Myers acquired an experimental nucleotide inhibitor through the Inhibitex deal and it also has a promising NS5A inhibitor. The shares of Idenix, which has nucleotide inhibitors in development, have soared 64% so far this year.
Novartis AG said this week it would pay $34 million upfront and $406 million in milestone payments to license an NS5A inhibitor from Enanta Pharmaceuticals.
Other companies with second generation protease inhibitors include Johnson & Johnson and Merck. Roche Holding AG and Vertex are developing nukes and other all-oral hepatitis C drug regimens are being explored by Abbott Laboratories, Pfizer Inc and Boehringer Ingelheim.
Investor enthusiasm runs high, and on very early evidence. The shares of another small company, Biocryst Pharmaceuticals Inc, shot up 12% in a single day after it said experimental hepatitis C drug BCX5191 showed promise in rat testing.
NO WINNER TAKES ALL
Julie Hoggatt, an analyst with Wolters Kluwer's inThought, puts the total market for hepatitis C drugs in the United States, Europe and Japan at $10.4 billion in 2016, falling to $8.6 billion in 2021 as more patients are cured and new infection rates decline.
Hoggatt estimated that only about 60,000 U.S. hepatitis C patients are currently being treated.
"Over the next 10 years, we are going to treat the majority of (U.S.) patients," she said.
Current treatments run about $60,000 a year and analysts estimate the eventual cost of a course of therapy at between $40,000 and $100,000.
"It will be a fragmented market and everybody is going to be fighting over the $500- to $800-million-a-year range," she said. "It is hard for one player to get into billions a year."
Others are much more bullish. Pharmasset, in its regulatory filings, forecast that its own worldwide sales of HCV drugs would peak at $8.2 billion in 2017, falling to a run rate of $4.5 billion in 2025.
Its new owner Gilead has been more circumspect and forecasts a longer time frame to bring patients on board.
"We think there's a lot of patients that can be captured both in the United States, Europe, and other territories, which could provide for a very long and sustained revenue and cash flow stream for Gilead," Chief Operating Officer John Milligan said earlier this month.
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