Merck's $3.8B deal for Idenix gets early HCV nucleotides, aims to fill data 'holes'
By Randy Osborne
Bolstering its hepatitis C virus (HCV) position as patent skirmishes continue in the space, Merck & Co. Inc. snatched up Idenix Pharmaceuticals Inc. for $24.50 in cash per share, or about $3.85 billion, in a 300 percent-plus premium deal approved by the boards of both companies and set to close during the third quarter of this year.
Idenix's stock (NASDAQ:IDIX) closed Monday at $23.79, up $16.56, or 229 percent.
For Merck, of Whitehouse Station, N.J., the agreement brings aboard Cambridge, Mass.-based Idenix's IDX21437, a uridine nucleotide (nuc) analog HCV NS5B polymerase inhibitor for which the firm recently reported data from a phase I/II trial. During the seven-day proof-of-concept part of the study, IDX21437 yielded mean maximum 4.2-4.3 log10 IU/mL reductions for patients infected with HCV genotype 1, 2 or 3 receiving 300 mg once daily.
The results match up nicely against Sovaldi (sofosbuvir), the nucleotide analog HCV NS5B polymerase inhibitor from Gilead Sciences Inc., of Foster City, Calif., which recently reported $2.3 billion in sales during its first quarter on the market. Sovaldi, approved late last year by the FDA, has established efficacy as part of an HCV regimen in patients with genotype 1, 2, 3 or 4 infection, including those with hepatocellular carcinoma who meet Milan criteria (i.e., awaiting liver transplantation) and those with HCV/HIV-1 co-infection. (See BioWorld Today, April 24, 2014.)
Gilead's shares (NASDAQ:GILD) ended Monday at $79, down $3.39.
Eliav Barr, vice president of infectious disease therapies at Merck, said the data from ION phase III studies done by Gilead with Sovaldi are "very nice, but there are holes." Sovaldi works less well in HCV patients with cirrhosis, for example, and results with genotype 3 patients leave "quite a bit of room to go, in terms of efficacy," he said.
About a month before Sovaldi's approval, Huddinge, Sweden-based Medivir AB earned a €10 million (then US$13.5 million) milestone from partner Johnson & Johnson, of New Brunswick, N.J., for the FDA approval of its HCV protease inhibitor simeprevir, marketed as Olysio for treatment-naive and treatment-experienced patients with HCV genotype, along with pegylated interferon-alpha plus ribavirin. But interferon-based regimens, with their onerous side effects, are going out of favor fast. (See BioWorld Today, Nov. 26, 2013.)
Barr said the simeprevir approval was somewhat anticlimactic because of the interferon element and because of "efficacy deficits" in genotype 1a patients, "which is a huge part of the U.S. [HCV] population."
Protease inhibitors still play an important role, though. Gilead has generated data, he said, that shows a nuc plus an NS5A inhibitor for short durations yields a sustained viral response (SVR) rate in the upper 60s. "When you add a protease inhibitor to that, the rate goes up to the mid-90s," Barr said. Merck has turned up data showing that a protease inhibitor plus an NS5A inhibitor gained an SVR at 12 weeks of 95 percent "in easy and harder-to-cure patients. The key is very high potency across the different categories of drug, and seeing how they work together to create a synergistic sort of situation."
Based on the promise thus far with IDX21437, Idenix has said it would launch a combination trial of IDX21437 and samatasvir, a pan-genotypic NS5A inhibitor, in the middle of this year, and selected a follow-on uridine-based nuc prodrug, IDX21459, from its ongoing discovery program and started enrollment for the healthy volunteer portion of a phase I trial with the candidate. Now, Merck will be integrating those compounds into its pipeline, though Barr said quiet-period rules restricted him from giving further details at this point.
Merck's lead HCV medicines in the works are the combo of MK-5172, an HCV NS3/4A protease inhibitor, and MK-8742, an HCV NS5A replication complex inhibitor. The doublet won breakthrough therapy designation from the FDA, and last month, Merck started phase III trials for MK-5172/MK-8742 with and without ribavirin in various genotypes and across a broad range of patient populations with chronic HCV.
Already the Merck duo has garnered more than 90 percent cure rates after 12 weeks in genotype 1 patients, and results with genotypes 2 and 3 will be disclosed. If Idenix's nuc therapies keep advancing, Merck likely would seek to add them onto its combo for even better potency and duration of effect, thus making a better potential competitor for Sovaldi – another once-per-day pill, possibly, to treat all genotypes of HCV.
Failures among nucs include Idenix's IDX184, Princeton, N.J.-based Pharmasset Inc.'s PSI-938, and BMS-986094, the compound from Inhibitex Inc., of Alpharetta, Ga., which New York-based Bristol-Myers Squibb Co. (BMS) quashed at the phase II stage because of what turned out to be unacceptable toxicity. BMS bought Inhibitex for $2.5 billion in 2012. (See BioWorld Today, Jan. 10, 2012, Aug. 17, 2012, and Aug. 26, 2012.)
All the fizzles were guanine-based rather than uridine-based, as with IDX21437 and its follow-on compound, Barr noted. Researchers have done "an extensive amount of preclinical work to ensure that the kinds of toxicities that have been observed with the other, flamed-out nucs are not present here," Barr said. "If you look at Sovaldi's advisory committee meeting materials, they presented information about how their drug was different from the Inhibitex compound, and they showed a couple of assays that differentiated the two," he told BioWorld Today. "These kinds of assays as well as a whole host of other work [were] done with IDX21437, and the results came out quite benign. When we look at all of those data, and the potency of the drug, and information that we've already learned about what makes for a bad nuc, we think the characteristics of IDX21437 are really quite favorable."
Phase II and phase III trials will tell the final tale, Barr said, but "each of those other drugs has data in the public domain that allow us to gain information [and determine], looking back, what were the safety signals that were observed. The most valuable and instructive example is with the Inhibitex compound. From what's been presented publicly, in preclinical models there was a lot of toxicity in the heart and skeletal muscle," which panned out later in humans. "The drugs that had trouble in the clinic also had trouble in preclinical models, whereas IDX21437 [so far] and Sovaldi both have a pristine safety profile," he said.
Wells Fargo analyst Brian Abrahams wrote in a research report on Gilead that Merck's move "could also be seen as an admission by Merck that it was not poised to compete with its existing phase III regimen," since sustained viral responses were high but so were breakthroughs. "Furthermore, given the that such early stage HCV assets will take some time to pan out, we see this as endorsing the idea that the HCV market will be robust and sustainable long-term, which has been a concern regarding Gilead," in Abrahams' view.
Idenix has filed patent lawsuits against Gilead related to Sovaldi. "The premium paid suggests [that] Merck believes Idenix's nuc intellectual property case against Gilead has sufficient merit such that even if the nucs fail, there could be some residual value from potentially prevailing in the ongoing patent litigation or settling," Abrahams wrote. Such is "not necessarily positive for Gilead, [but] we have always viewed a potential settlement (e.g. for royalties on Sovaldi) as being more potentially materially positive for Idenix than meaningfully negative for Gilead." Barr declined to comment on the patent matter.
"What [existing HCV] regimens miss is the universality factor," Barr said, adding that Merck intends to develop a "one-size-fits-all, short, quick, highly effective, well tolerated, convenient, in-and-out" type of therapy.
In the dash by big pharma for non-interferon strategies against HCV, another winner could be New Haven, Conn.-based Achillion Pharmaceuticals Inc., which in late April began dosing study participants with ACH-3422, its uridine-analog nucleotide inhibitor, in a phase I trial, and started a phase II pilot study testing ACH-3102, a second-generation NS5A inhibitor, in combination with sofosbuvir for eight weeks and potentially six weeks of treatment for patients with chronic genotype 1 treatment-naïve HCV. Achillion's stock took a 25 percent hit almost a year ago when the FDA placed the HCV candidate sovaprevir on clinical hold because of elevated liver enzymes.
Its shares (NASDAQ:ACHN) ended Monday at $4.25, up $1.37, or 47.6 percent. (See BioWorld Today, July 3, 2013.)
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