Hepatitis C Drugmakers Hook Up to Develop Cocktail

Merck (NYSE: MRK  ) may be late to the party, but at least it's found someone to go home with.

Hepatitis C drugmakers have been hooking up left and right in the hopes of developing an all-oral cocktail to treat the viral infection. Merck joins their ranks on Monday, announcing an agreement with Bristol-Myers Squibb (NYSE: BMY  ) to test its protease inhibitor MK-5172 with Bristol's NS5A inhibitor daclatasvir.

While this is the first hookup for Merck that I know of, Bristol has partnered out daclatasvir with anyone that would buy it a drink. There was a partnership with Phamasset, but Gilead Sciences (NASDAQ: GILD  ) dumped Bristol after buying Pharmasset. Bristol still has a partnership testing daclatasvir with Johnson & Johnson's (NYSE: JNJ  ) simeprevir and recently signed up Vertex Pharmaceuticals (NASDAQ: VRTX  ) as a partner to test daclatasvir with the biotech's hepatitis C drug, VX-135.

These really are hookups and not long-term marriages -- no polygamy here. There isn't any real commitment beyond initial trials to see if the drugs work well together. The partnership between Merck and Bristol covers a phase 2 trial that Merck will conduct. Vertex is running two phase 2 trials as part of its deal with Bristol. Neither press release mentioned who was paying for the trials.

If the drugs do work together, there's always an option of extending the partnership into phase 3 trials. Gilead didn't want to work with Bristol, but the driving force for the breakup had to do with the biotech having an NS5A inhibitor of its own. Most of the other hepatitis C drugmakers don't have that option. To create an effective cocktail,they'll need some help.

Bristol isn't the only one putting itself out there. Johnson & Johnson and Vertex both have other partnerships to test their compounds with other drugs, including with each other.

That's going to create some interesting dynamics down the line if a drug works with more than one partner. There could be a bidding war to get exclusivity or companies might choose to make their compounds available for use in multiple cocktails, which could be lucrative, but will also open up some conflicts of interest.

Interestingly, Merck has a NS5A inhibitor of its own called MK-8742. It isn't clear to me whether the partnership with Bristol is a backup plan or if the development of MK-8742 is dead. ClinicalTrials.gov lists a trial testing MK8742 with MK-5172 and ribavirin as still recruiting.

Being late to the party developing an all-oral cocktail, it's understandable that Merck might want to keep all of its options open.

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