Investors thinking the battle between hepatitis C drugmakers would calm following the FDA's approval of Gilead's (GILD +1.18%) Sovaldi and Johnson & Johnson's (JNJ +1.09%) Olysio are mistaken. Positive data for Gilead's single-tablet combination of its Sovaldi and ledipasvir reignites the race with AbbVie (ABBV +0.16%) and Bristol-Myers (BMY +0.82%) for a ribavirin and interferon free cure.
Moving in the right direction
Patients and doctors were likely applauding when the FDA approved Gilead's Sovaldi and J&J's Olysio in late 2013. The two treatments are ushering in a new generation of shorter, more effective treatments that rely less and less on side-affect laden drugs interferon and ribavirin.
However, both drugs still require dosing alongside those troublesome prior generation treatments -- at least for now. Sovaldi is approved for use with ribavirin, but without interferfon, in less-common genotype 2 and 3 patients. Sovaldi will need to be matched up with interferon in far more common genotype 1 cases, though. Meanwhile, Olysio will still be dosed with both those drugs for all patients.
That means that the hunt is still on to bring the first oral interferon-and-ribavirin-free treatment to market.
Quickly moving toward approval
Gilead took heat for shuttering a promising trial using Sovaldi alongside Bristol's daclatisvir in early 2013. In phase 2 trials, that combination produced a nearly 100% cure rate among patients who previously failed to respond to treatment by Vertex and J&J's Incivek or Merck's Victrelis.
Gilead's strategic decision to focus on its own in-house combination is still putting up impressive results, however, including a 96% cure rate. That success has Gilead forecasting that it may file the ribavirin- and interferon-free tablet for approval as early as the first quarter of 2014.
That puts it slightly ahead of AbbVie's three-drug interferon-free oral cocktail. AbbVie's combination therapy, which still relies on ribavirin, offered a similar 96% cure rate in phase 3 trials. The company will need to quicken the pace of its mid-year timeline if it hopes to beat Gilead in the race to file with the FDA, however.
This also gives Gilead a more attractive position to battle Bristol in overseas markets, especially if the combination proves more effective in genotype 1b, which is more common in countries like Japan. Bristol applied for approval of its daclatisvir interferon- and ribavirin-free combination in Japan during November.
Fool-worthy final thoughts
During phase 3 trials, Gilead's Sovaldi and ledipasvir combination not only cleared more cases of hepatitis C than the Sovaldi, ledipasvir, and ribavirin arm of the treatment, but did so with fewer side effects including nausea and insomnia. That positions it to win a big piece of the $20 billion market for hepatitis C treatments if it can win FDA approval.
More data from Gilead's trials will be released in the first quarter, including information tied to the 24-week treatment course which could move the needle. Investors will also likely hear from Japan on Bristol's daclatisvir, and given Gilead's results it wouldn't be shocking to see AbbVie try to accelerate its filing as well. This suggests that investors should stay tuned because it's likely we haven't heard the last from any of these companies in their race to a more effective cure.
