AbbVie Headed to FDA, Clash With Gilead Set

AbbVie (NYSE: ABBV  ) has finished up its phase 3 clinical-trial program for its all-oral hepatitis C drug cocktail. There were six clinical trials in total, testing the drugs in different patient populations in many cases with and without generic ribavirin.

All the treatment regimens produced sustained virologic responses -- essentially a cure -- in the 90 percents, sans one treatment arm where all 91 patients were cured.

Three years ago, the best a patient infected with genotype 1 hepatitis C could hope for was a 50% chance of clearing the virus. Approval of Vertex Pharmaceuticals'  Incivek and Merck's Victrelis in 2011 raised the cure rate near 80%, but patients still have to take peginterferon, an injected drug that causes flu-like symptoms, for 24-48 weeks.

AbbVie's drugs only have to be taken for 12 weeks in most cases and don't require peginterferon. The data is good news for Enanta Pharmaceuticals (NASDAQ: ENTA  ) , which helped develop ABT-450, one of the components of the cocktail. Enanta is due double-digit royalties on sales of the drug.

Not the only player in town
Abbvie said it's shooting for submitting its marketing application for the cocktail early in the second quarter, but it won't be the first all-oral cocktail if Gilead Sciences (NASDAQ: GILD  ) sticks to its guidance of submitting to the FDA in the first quarter.

We could make comparisons between trials run by the two companies on patients with the same genotypes to see which has higher cure rates, but with most above 95%, the difference isn't likely to be statistically meaningful. Most doctors won't choose between AbbVie's or Gilead's regimen based on a percentage point or two difference in the clinical trial efficacy results.

The earlier filing could give Gilead Sciences a bit of a head start, although it may not have much of one. There's only one day between the end of the first quarter and the start of the second quarter after all. But Gilead already has an indirect head start. One of the components of Gilead's cocktail, Sovaldi, was recently approved for use in combination with peginterferon in genotype 1 patients. Doctors' familiarity with Sovaldi and Gilead's sales reps could give the biotech a leg up.

The choice between the two cocktails could come down to convenience. Gilead's cocktail requires fewer pills, which on the surface doesn't seem like much. As long as patients are taking their medications on the correct schedule it doesn't really matter, but doctors may feel that fewer pills will result in better compliance, which is a really big deal for antiviral medications. If patients don't take all their medication and the virus is knocked down but not out, it can give the virus time to mutate in a way that makes it resistant to the medications.

The deciding factor may come down to price, especially as insurers get involved. If one of the companies is willing to substantially undercut the other, insurers may require that cocktail be used first. Given the high cure rates, that wouldn't leave many scraps for the other company.

If it comes down to price, launching second could give AbbVie a huge advantage.

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