ViewPoints: Competitor dynamics shift in hepatitis C market

ViewPoints: Competitor dynamics shift in hepatitis C market

(Ref: ViewPoints Desk)
FirstWord Pharma
April 15th, 2014
By: Simon King 

Continued rapid uptake of Gilead Sciences' hepatitis C treatment Sovaldi and questions surrounding the sustainability of pricing models in conjunction with demand for new therapies, provided the backdrop for this year's annual meeting of the European Association for the Study of the Liver (EASL) in London.

Clinical data presented at the conference showcased both the next generation of hepatitis C therapies – designed to further improve convenience and raise the standard of care for harder to treat patients – and the evolution of competitor dynamics, with Merck & Co. a notable winner in the eyes of analysts.

Insight, Analysis & Opinion

Presentation of Phase II data last week for Merck's combination of MK-5172 and MK-8742 prompted a flurry of revenue upgrades for the regimen among analysts. A widely held view is that should results hold up in larger Phase III studies, then Merck will not only emerge as a notable competitor to AbbVie as the market's 'second player' but could challenge the previously assumed 'monopolistic' status of Gilead, noted analysts at Goldman Sachs.

This stems primarily from MK-5172/MK-8742 being dosed as a single, once-daily tablet like Gilead's Sovaldi + ledipasvir fixed-dosed combination, which is expected to be approved on or before its October 2014 PDUFA date.

While AbbVie's product comprises an arguably less convenient regimen, the emergence of Merck's data threatens to minimise Gilead's differentiation versus competitors, particularly if MK-5172/MK-8742 demonstrates effectiveness across multiple genotypes. At this stage any 'uniqueness' of Gilead's offering will be based around a shorter eight-week duration of therapy (versus 12 weeks for the Merck regimen).

That said, while there are only "a few innovations left in hepatitis C," note analysts at JP Morgan, Gilead remains at the forefront of the two key opportunities – a true pan-genotypic all-oral regimen and a four- or six-week regimen. Gilead's combination of Sovaldi and GS-5816 (a pan-genotypic NS5a inhibitor) is targeting both opportunities and will move into Phase III testing later this year.

Despite being at the forefront of hepatitis C innovation, analysts at Goldman Sachs have reduced their long-term sales forecasts for the company on the assumption that Merck will assume greater market share than initially anticipated. However, for some the bull thesis surrounding Gilead's potential dominance of the market remains firmly intact, given its likely head-start over competitors, particularly Merck whose drug will reach the market in late 2015 at the earliest.

Given the way that Sovaldi revenues have developed since December, debate around diagnosis rates and whether payers will stratify the hepatitis C population to better manage costs, accurately predicting the size of the market towards the end of the decade – let alone market share at a product level – remains challenging. The key takeaway from EASL is that the race for market share has become more competitive, a trend that will be watched with interest by payers.

Related @ HCV New Drugs
(Sovaldi, formerly GS-7977) and NS5A inhibitor ledipasvir (formerly GS-5885) based combinations, including: Sovaldi and GS-5816 alone without ribavirin
Sofosbuvir/Ledipasvir
Sofosbuvir/Ledipasvir and GS-9669
Sofosbuvir/Ledipasvir and GS-9451
Sovaldi and GS-5816 alone without ribavirin

Related @ FirstWord Pharma
ViewPoints: Pharmacy benefit managers threaten to run with Congress' baton on Sovaldi pricing – Is Gilead Sciences a victim of its own success?

Spotlight On: The Sovaldi pricing debate – 5 key questions