Please ensure Javascript is enabled for purposes of website accessibility

Johnson & Johnson Wins Hep C Battle, but War Doesn't Look Good

By Brian Orelli, PhD - Nov 25, 2013 at 1:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Johnson & Johnson beats Gilead Sciences to deliver the first next-generation hepatitis C drug approved in the U.S., but a battle with Vertex Pharmaceuticals' and Merck's first-generation drugs will be short lived with Gilead and AbbVie developing all-oral cocktails.

Johnson & Johnson (JNJ 0.21%) has won the race to bring the first next-generation hepatitis C drug to the U.S. market. The Food and Drug Administration approved Olysio, formally known as simeprevir, on Friday evening, while Gilead Sciences' (GILD 0.07%) sofosubivir is still pending with the federal agency.

Unfortunately, the lead -- however long it might be -- isn't worth all that much.

Olysio is a protease inhibitor like Vertex Pharmaceuticals' (VRTX -1.44%) Incivek and Merck's (MRK 1.46%) Victrelis, but it appears to be more efficient at clearing the hepatitis C virus quickly.

Olysio and Incivek are taken with pegylated interferon and ribavirin for 12 weeks; if the patient is then virus-free, the pegylated interferon and ribavirin only have to be taken for 12 additional weeks. If the virus isn't cleared quickly, the patient has to take the pegylated interferon and ribavirin for 38 more weeks. Considering pegylated interferon causes flu-like symptoms when taken, it's a big deal to cut in half the time patients have to take the drug.

When the data from the phase 3 trials in treatment-naïve patients were combined, Olysio allowed 88% of patients to take the shorter treatment. Only 58% of patients in the pivotal trial of treatment-naïve patients taking Vertex's Incivek were eligible for the shorter treatment. Merck's shortened treatment for Victrelis requires the drug be taken with pegylated interferon and ribavirin for 28 weeks, which is one of the reasons Incivek has sold so much better than Victrelis.

... But not best
While Olysio appears to be more effective, patients still have to inject themselves with pegylated interferon and deal with the side effects. Olysio won't be used as a treatment in combination with pegylated interferon for all that long because new all-oral combinations are coming.

Gilead and AbbVie (ABBV 1.33%) are both developing all-oral combinations that not only don't require pegylated interferon, but also appear to have better cure rates. AbbVie's combination, for instance, just posted a 95% cure rate in patients infected with genotype 1a hepatitis C. Olysio only cured 75% of patients with that type of infection.

Olysio isn't part of Gilead's or AbbVie's combinations, but Johnson & Johnson has partnered with other drugmakers -- namely Idenix Pharmaceuticals  and Bristol-Myers Squibb -- to test all-oral combinations. Those treatments are considerably behind Gilead and AbbVie.

Ironically, Johnson & Johnson could be the first to market for the next-generation hepatitis C drugs, but end up trailing in the end.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
$182.67 (0.21%) $0.38
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
$63.12 (0.07%) $0.04
Merck & Co., Inc. Stock Quote
Merck & Co., Inc.
$94.49 (1.46%) $1.36
Vertex Pharmaceuticals Incorporated Stock Quote
Vertex Pharmaceuticals Incorporated
$288.32 (-1.44%) $-4.22
Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
$80.14 (1.49%) $1.18
AbbVie Inc. Stock Quote
AbbVie Inc.
$154.36 (1.33%) $2.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.