Gilead's refusal to collaborate raises an important observation. Consider this: Bristol-Myers hasn't made public much data about BMS-986094 since closing the Inhibitex acquisition and non-specific toxicity rumors dogged the drug at EASL. Does this explain why Bristol-Myers is trying to pressure Gilead into moving the daclatasvir-GS-7977 regimen into phase III trials? Put another way, if Bristol-Myers was confident that BMS-986094 (INX-189) could easily replace GS-7977 in a combination regimen with daclatasvir, why not play the same ruthless, "winner take all" game as Gilead?
If I was a Bristol-Myers bull, I would be worrying about the future of BMS-986094 (INX-189.)
Management better hope it can either woo or shame Gilead into collaboration (unlikely, unless something goes wrong with GS-5885) or that the Inhibitex drug plays nice with daclatasvir and the toxicity rumors are false. Otherwise, Bristol-Myers will have to open up the M&A wallet again to remain relevant in the race for next-generation hepatitis C therapies.
Abbott (ABT):Grade: B Despite Wall Street skepticism, I think Abbott remains firmly in the hepatitis C game. The company presented data from two major studies, PILOT and CO-PILOT, in late-breaker sessions on Saturday afternoon. PILOT enrolled treatment-naive patients to receive 12 weeks of ABT-450 -- a protease inhibitor that requires blood-level "boosting" with ritonavir -- in combination with the non-nucleoside NS5B polymerase inhibitor ABT-072 and ribavirin. It must be noted that all patients had favorable "C/C" genetics, making it an easy group to treat. Nonetheless, Abbott reported an impressive 91% SVR24. One patient in PILOT suffered a late relapse after 36 weeks of follow up which dropped the SVR36 "cure" rate to 82%. These are some of the longest follow-up results yet with next-generation, all-oral regimens so the relapse was noteworthy. I'm not sure if the relapse is an isolated event, and no one I spoke with had a definitive answer. Keep the question of whether interferon-free regimens might leave patients more susceptible to late relapse in mind -- it needs to be watched closely going forward. In Abbott's second CO-PILOT study, patients received 12 weeks of ritonavir-boosted ABT-450 and the "non-nuc" ABT-333. Patients in the two treatment-naive arms achieved SVR12 rates of 93% and 95% (These patients were a mix of easy- and hard-to-treat patients more comparable to competitors' studies). I was impressed with these data, as were most physicians at EASL. A third arm in the CO-PILOT study enrolled "non-responders" but generated only a 47% SVR12; these patients need a more robust regimen. The downside to the CO-PILOT regimen is complexity: ABT-450 is administered once daily, as is ribavirin and ritonavir, whereas ABT-333 is dosed twice daily. Further, ritonavir has numerous drug-drug interactions. Physicians I spoke with at EASL were mixed about whether or not patients could be sufficiently compliant in the real-world setting. I doubt it. Abbott plans to co-formulate future combinations, which will include other drugs (the company also has a NS5A inhibitor.) I plan on taking a closer look at Abbott in a future column. The company is highly dependent on sales of the rheumatoid arthritis drug Humira, which I don't like, but investors aren't assigning much value to its hepatitis C assets. Based on what I saw at EASL, that could be a mistake. Idenix Pharmaceuticals (IDIX): Grade: B- Despite having no data at EASL this year, Idenix will likely benefit from the rising tide created by Gilead and Bristol-Myers. After successfully negotiating side effect questions and a partial clinical hold, Idenix has emerged as the only smallish biotech company with both a "nuc" (IDX-184) and an NS5A inhibitor (IDX-719.) By year-end, we will see SVR4 data for IDX-184 combined with interferon and ribavirin; and early data on IDX-719. If these results look promising, Idenix is going to be hugely attractive to large pharma companies with lackluster hepatitis C programs and an urge to catch up. Novartis (NVS) already has a first right to license IDX-719 by year-end, but other companies might be interested regardless of the Swiss pharma giant's decision. I would be a buyer of Idenix, but keep any position on the small side. Achillion Pharmaceuticals (ACHN): Grade: C- Meh. Achillion has two NS5A inhibitors, ACH-3102 and ACH-2928, which look okay in early studies, but I'm not sure what makes these drug candidates stand out. I feel similarly unexcited about ACH-1625, a protease inhibitor, which looked decent in a confusing study that combined it with interferon and ribavirin. I'm just not convinced these are valuable assets, so I'm going to wait on the sidelines. Vertex Pharmaceuticals (VRTX): Grade: D- Out of sight, out of mind. The big loser of the EASL conference was Vertex Pharmaceuticals. The company's first-in-class protease inhibitor Incivek pioneered treatment with direct-acting antivirals in hepatitis C, but the drug now feels woefully outdated less than one year after approval. The problem is that Incivek therapy still requires patients to receive weekly injections of interferon. Remember what I noted at the top of this column -- interferon is dead -- so any drug attached to interferon is at risk of the same fate.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV