Data on some of the next-generation hepatitis C drugs will be presented at the end of this week, when the annual meeting of the American Association for the Study of Liver Diseases kicks off. Add in top-line data that's been released recently and expected results in the next few months, and the hepatitis C space is looks like it'll get really crowded, really quickly.
The biotech front-runner
No shortage of pharma competition
Unfortunately for the smaller biotechs, Big Brother is interested in the space as well.
Earlier this month, Abbott Labs
The upside to pharma's interest
Fortunately for biotechs, combination treatments are likely to be key to ridding patients of the virus. Resistance issues are common, but they can be avoided by combining medications that attack the virus in different ways.
No doubt Roche's acquisition of Anadys earlier this month was driven by its desire to get a hold of Anadys' hepatitis C treatment, setrobuvir. While we might see more acquisitions in the works, partnerships -- especially non-exclusive ones -- could be the best solution for both sides. Pharmasset has used the double-dipping strategy making pacts with both Johnson & Johnson
The problem with non-exclusive pacts is that they may not provide biotechs with much cash to fund their own development. On the other hand, if a biotech doesn't make too many of them, it could lead to a takeout offer.
Which combo is the combo?
It's hard to know which combination will eventually win out. When you start adding multiple drugs to each other, there's bound to be side-effect issues that aren't a problem when they're used individually. Hepatitis C is a little less life-threatening than HIV, so the FDA will demand a cleaner side-effect profile than they have for cocktails that treat HIV.
And while finding the most potent combination is important, it's useful only if they complement each other's resistance issues; knocking the virus down to undetectable levels in 100% of the patients isn't particularly useful if the virus just rebounds once it mutates in a way to avoid the drugs' inhibitory properties.
Rather than trying to guess which company will eventually profit, buying a basket of hepatitis C drugmakers might be the best move. If a combo treatment is going to eventually work, why not a combination of investments?
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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson and Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson, Vertex Pharmaceuticals, and Abbott Laboratories and creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.