Source: Gilead Sciences.
Developing drugs that help established blockbusters work better is a major trend in biotechnology. It's a lower-stakes game because drug developers only need to show that their products can improve upon existing therapies, rather than outperform them.
Achillion Pharmaceuticals (ACHN +0.00%) is one of the companies working on adjunctive therapy, and if its ACH-3102 improves outcomes for patients taking Gilead Sciences' (GILD +0.03%) Sovaldi, the company might hitch a ride to blockbuster status on Gilead's coattails.
Improving outcomes
The ability to provide a functional cure for the 150 million people globally with hepatitis C has catapulted Gilead Sciences' sales higher this year. Thanks to cure rates in the mid-90% range, Sovaldi, which won FDA approval last December, racked up more than $8 billion in sales during its first nine months on the market.
That eye-popping success makes Sovaldi one of the world's best-selling drugs this year, but Gilead's revenue could head even higher now that regulators have given the go-ahead to Harvoni, the company's next-generation hepatitis C drug.
Harvoni, which combines Sovaldi with ledipasvir, clears hepatitis C in as many as 99% of patients. Importantly, the drug achieves that impressive cure rate without the help of peg interferon or ribavirin -- two prior-generation drugs that come with a host of side effects.
But Harvoni's advantage isn't just its better cure rate. The drug also shortens the treatment time for many patients. While the majority of Harvoni patients will take the drug for 12 weeks, roughly 40% of hepatitis C patients might qualify for an eight-week regimen. That's a big step forward from 2012, when Vertex Pharmaceuticals' Incivek, the best-selling hepatitis C drug that year, required a 24-week treatment regimen.
Battling over time
Eight weeks is a great start, but there's still plenty of opportunity for competing drug developers to win away hepatitis C market share. All they have to do is develop a cure that works as well as Harvoni over a shorter period of time. However, that might be easier said than done.
Merck (MRK +2.56%) just reported that its attempt to lower the treatment period to four weeks by combining two of its drugs with Sovaldi was a bust. Fewer than 40% of patients treated with the three-drug mash-up over a four-week period achieved a functional cure.
Source: Achillion.
That's disappointing for Merck, but it also suggests Achillion's ACH-3102 might be even more special than previously thought.
During a small phase 2 clinical trial, 100% of patients who received both ACH-3102 and Sovaldi over eight weeks achieved a functional cure. That success prompted Achillion to kick off a six-week trial of the two-drug combination in August. The company is expected to announce results from a small pilot study of this shorter treatment period before year's end.
Fool-worthy thoughts
Like Gilead's ledipasvir, Achillion's ACH-3102 is a NS5A inhibitor. Achillion hopes to prove its product is as good as (or better than) ledipasvir as an adjunct to Sovaldi. If it can do that, Achillion could provide insurers with an alternative therapy to Harvoni. Such an alternative would be especially attractive if Achillion can deliver Harvoni-like cure rates with fewer weeks of treatment.
However, Achillion is far from alone in the race to a shorter cure. Despite its recent stumble, Merck plans to study its own six-week regimen that is focused solely on the company's in-house drugs, including compounds it acquired via the $3.8 billion acquisition of Idenix this past summer.
Regardless, Achillion has the edge -- at least for now -- and that suggests the company's investors could be right to believe that a suitor will eventually come knocking. Who that suitor might prove be is pure speculation, but with numbers that good it wouldn't be surprising if Achillion's phone starts ringing a bit more over the next couple months.
