Too Little, Too Late for Achillion?

Achillion Pharmaceuticals (Nasdaq: ACHN  ) presented great data for its hepatitis C protease inhibitor drug ACH-2684 -- and was well rewarded with an 11% jump in its stock price yesterday -- but one has to wonder if it's too little, too late.

This was just phase 1b data, after all.

In a short trial designed to check the activity of ACH-2684, three days of daily dosing produced a 3.73 log10 reduction in virus levels. The placebo barely moved the log scale with a 0.68 log10 decline. A twice-daily dose produced a larger decline in virus levels, but probably not enough to justify using it in later clinical trials given that once-daily treatment is more convenient.

The first drugs to improve hepatitis C treatment beyond the old standby of ribavirin and peginterferon were both protease inhibitors: Merck's (NYSE: MRK  ) Victrelis and Vertex Pharmaceuticals' (Nasdaq: VRTX  ) Incivek. ACH-2684 is a second-generation protease inhibitor, hoping to improve on the first-generation inhibitors through tighter binding.

There's more than one way to kill a virus, though. Since Victrelis and Incivek were approved last year, protease inhibitors have fallen out of favor, with Gilead Sciences' (Nasdaq: GILD  ) nucleotide inhibitor GS-7977 and Bristol-Myers Squibb's (NYSE: BMY  ) NS5A inhibitor daclatasvir demonstrating great results without the need for a protease inhibitor (nor ribavirin and peginterferon).

If ACH-2684 were further along, perhaps Gilead or Bristol might be willing to test it in combination with their drugs, but both are close to entering phase 3 and have other molecules they can combine together if they want to go it alone. They're certainly not going to wait around for a drug still working out its proper dosing.

I'm not suggesting that Achillion should just shelve ACH-2684, though. Achillion has other hepatitis C drugs in its pipeline, so a partner isn't necessary to push its protease inhibitor along. And the higher potency could make it effective against viruses that have developed mutations that make them resistant to other drugs. Coming up from behind, ACH-2684 might end up doing mop-up duty for patients that fail other treatments. There wouldn't be as many potential patients, but perhaps the drug could be priced at a premium to make up for it.

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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Gilead Sciences and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.

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Read/Post Comments (2) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 22, 2012, at 5:07 PM, illseeyou wrote:

    I would say that your way off on your commentary, ACHN has fast track approval from the FDA, they can have a drug on the market in late 2013, price will be a factor in treating the millions of Hep-C infected patients and if they are cheaper and or better with their drug it’s a 5 billion dollar a year drug market which values ACHN with a modest 10 to 1 P/E of around 10 billion dollars + putting their share price around 250.00 after the dilutions.

    VRUS got bought for 10 billion dollars just for their drug and it’s still in trials.

  • Report this Comment On May 25, 2012, at 5:18 PM, hainhan wrote:

    It is neither late nor small :

    REMEMBER Abbott" Humara was behind three other good drugs for treating R.A. ,but now is number one blockbuster !

    Right NOW, there are not enough G.I. practicing specialists to treat HCV patients . HCV disease is a silent disease.It tends to not result in emergencies and patients usually have to wait one month for appointment. Furthermore, when, patients decide to begin treament , many follow-ups in one year are needed .

    G .I physicians in the US are overwhelmed by Gastroentero scopes for people over 50 Many do 3 to 5 scopes daily, epecially for baby boomers who need scopes every 5 years . they do not have time to have many new patients. To treat 3 millions HCV patients in the US. one guesses this is 20 times the G.I. Association can provide !

    This why VERTEX P. does not have enough specialists to provide treatment the speciaiists have to wait for the last fo follow-up; before to begin a new patient. this can take at least 6 months To remedy this problems ., internists should take responsability to treat H.CV patients/

    Also,do not discard Interferon from some of the treament regiments .While revieving all lthe trials performed by PHARMASSET. one can see more than 80% of trials Pharmasset performed include Interferon .

    For chronic HCV patients.especially bay boomers .many have CIRRHOSIS .A succesful treatment does not mean you are safe ..

    IF A PATIENT GETS CIRRHOSIS,CANCER CAN STILL BE IDENTIFIED YEARS LATER..

    Interferon can treat many kind of cancer It is a human product ,it is not chemical., like Organic product for Organic Food.

    A Head to Head trial may be necessary between All Orals versus Oral plus Interferon to see which one can lower the incidence of liver cancer .Thi study may surprise many analysts one day.

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