Roche's All-Oral Hep C Therapy Could Be First, Not Best, to Reach Market
BOSTON (TheStreet) -- Roche's (RHHBY) purchase of Anadys (ANDS) likely provides the third drug in what might be the first (but not necessarily best) all-oral, interferon-free therapy for hepatitis C to begin phase III studies.
Being first to market with an all-oral Hep C therapy is important to Roche because the company has a lot to lose by lagging behind. Roche sells Pegasys, the leading interferon used to treat hepatitis C today, with sales of 1.1 billion Swiss francs through the first nine months of the year. Roche executives aren't stupid; they look ahead a few years and see Pegasys sales going away, similar to the patent cliffs hitting other Big Pharma drug blockbusters.
If Roche wants to maintain or grow its Hep C franchise, it has to figure out a way to develop an all-oral (interferon-free) therapy -- and fast.
One way of doing this is by acquiring or partnering Hep C drugs others consider to be weak or non-competitive on their own. That description fits Anadys' lead drug setrobuvir, which for $230 million, Roche is acquiring at a relatively low price.InterMune's (ITMN) danoprevir, which Roche acquired last year, is also seen as a weak Hep C drug. Roche could start relatively quickly a phase III study against Hep C that combines three oral drugs -- setrobuvir (from Anadys), RG7128 (partnered with Pharmasset) and Merck's (MRK) currently approved Hep C drug Victrelis, predicts Brian Skorney, biotech analyst at Brean Murray, Carret & Co. [Roche and Merck have already announced plans to collaborate on Hep C.] Another potential Roche all-oral regimen could include setrobuvir, RG7128 and danoprevir (acquired from InterMune). These Roche triple combinations may require longer 24-week dosing (instead of faster 8 or 12 week dosing) and may not be as potent or effective as all-oral regimens being developed by Pharmasset and others, but Roche may figure that being first is more important than being best, adds Skorney. In the interest of fairness, it's worth noting that Skorney had been bearish on Anadys going into today's Roche deal. He says he didn't think Roche would buy Anadys because he under-estimated the company's desire to move quickly to develop an all-oral Hep C therapy.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV