Achillion re-emerges as takeover target after recent setbacks in hepatitis C field: report

Achillion re-emerges as takeover target after recent setbacks in hepatitis C field: report

Last Updated:August 29, 2012 09:25

Analysts expect renewed takeover interest in hepatitis C drug developer Achillion Pharmaceuticals after recent setbacks to experimental compounds from Bristol-Myers Squibb and Idenix Pharmaceuticals, Bloomberg reported Wednesday. JMP Securities analyst Liisa Bayko said Achillion is "well-positioned to be a candidate to be taken out, because right now, there are very few options if you want to get involved in hep C, in terms of combinations that are more advanced that are still in clinical development."

Recently, Bristol-Myers Squibb ended development of its experimental hepatitis C drug BMS-986094, which it gained through the $2.5-billion acquisition of Inhibitex, due to safety concerns that involved heart and kidney toxicity. Meanwhile, the FDA has placed clinical holds on two of Idenix's similar drugs, IDX184 and IDX19368, due to the cardiac-related concerns with Bristol-Myers Squibb's compound.

Bayko said that Achillion may attract interest from companies looking to gain hepatitis C drugs to use on their own or in combination with their existing therapies. Piper Jaffray analyst Ted Tenthoff suggested that Achillion could receive attention from Merck & Co., Roche and Vertex as they seek to compete against Gilead Sciences, which is seen by analysts as having the most promising oral hepatitis C drug. Gilead is scheduled to start testing two of its therapies together in a single tablet this year, with a US marketing application possibly being filed in 2014. Peter Kolchinsky of RA Capital Management added that Gilead could also look to acquire Achillion. The drugmaker "could solidify its supremacy if it had Achillion’s drugs, each best in its respective class based on what we know so far," Kolchinsky noted.

However, Bayko said she expects a suitor to wait for data on how effective Achillion's two therapies work in combination, with good results enticing competitors to bid. Joe Truitt, Achillion’s chief commercial officer, remarked "if that combination data comes through, then we really have a commercially viable, competitive combination that will put everybody on notice," adding "we’ll make the best strategic options as they come to us." CEO Michael Kishbauch had said in November that the company was in "advanced discussions" with potential partners or acquirers.

Tenthoff commented that although "the frenzy has been taken out of the [hepatitis C] space," Achillion will attract interest because its therapies have the potential to be the best of their type. "We expect the wave of consolidation to continue. Achillion is clearly a target," he added.

Reference Articles
 Achillion Deal Looming as Hepatitis Drugs Fail: Real M&A - (Bloomberg)

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