Achillion Hep C Drug Update is Well Timed

Talk about uncanny timing, one day after Achillion Pharmaceuticals ( ACHN) rips higher on takeover speculation, the company announces the lifting of an FDA clinical hold on its lead hepatitis C drug candidate and the start of a new study with a second hepatitis C compound. 

What an amazing coincidence!

Achillion shares are moving 35% higher to $5.75 in Tuesday's premarket. The stock gained 48% to $4.25 on Monday on the back of Merck's ( MRK) $3.9 billion acquisition of Idenix Pharmaceuticals  ( IDIX) to bolster its hepatitis C drug pipeline. The market is betting one of Merck's hepatitis C competitors -- Johnson & Johnson ( JNJ), Abbvie ( ABBV), Bristol-Myers Squibb ( BMY) or Gilead Sciences ( GILD) -- will come knocking on Achillion's door. 

The FDA lifted a clinical hold on sovaprevir, Achillion's protease inhibitor, to allow higher dosing in hepatitis C patients. Achillion also announced the start of patient dosing in an early study of ACH-3422, a nucleotide polymerase inhibitor. The conventional thinking is that so-called "nucs" are the linchpin of hepatitis C combination therapy. Gilead' Sovaldi is a nuc and will likely generate $9-10 billion in sales this year. Idenix is developing a nuc, which is why Merck acquired the company.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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