Thanks to the emergence of paradigm-shifting all-oral antiviral regimens, the hepatitis C virus (HCV) space has surged to become one of the sector's most lucrative markets. But as sales figures flatten – due to both fewer new patient starts and pricing pushback – analysts are looking at what could be the next big antiviral drug market: hepatitis B virus (HBV).

A seminar featuring key opinion leaders (KOLs) during the American Association for the Study of Liver Diseases (AASLD) meeting in Boston highlighted some of the newest approaches advancing in development, as well as thoughts on regulatory pathway at the FDA. RBC Capital Markets analyst Michael Yee came away from that seminar cautiously encouraged.

Based on comments from experts and big pharma, "we think hep B is still early – but a key space to watch over the next one to two years as new data [are] finally starting to come out," he wrote in a research note, adding that to date, the Street has "basically paid no attention to this area of investing because of a lack of much data in 2016."

But with the likes of Arrowhead Pharmaceuticals Inc., Alnylam Pharmaceuticals Inc., Arbutus Biopharma Corp., Assembly Biosciences Inc. and Spring Bank Pharmaceuticals Inc. all now in phase I/II trials, with data expected next year, "we believe there is attractive opportunity over the next few years as data start coming out," Yee added.

With estimates from the Hepatitis B Foundation of roughly 240 million patients with chronic HBV worldwide – the highest prevalence is sub-Saharan Africa and East Asia – it's a space in dire need of new treatments. Current therapies consist of side effect-plagued interferon-based therapy and a handful of nucleoside analogue-based antivirals such as Baraclude (entecavir, Bristol-Myers Squibb Co.) along with Gilead Sciences Inc.'s Viread (tenofovir disoproxil fumarate) and Viread successor Vemlidy (tenofovir alafenamide), which gained approval last week for treating adults with chronic HBV infection with compensated liver disease. (See BioWorld Today, Nov. 11, 2016.)

But the available oral antivirals don't work in all patients – the Hepatitis B Foundation cites about half the infected population – and patients on antiviral drugs typically end up taking them for life. The goal is to find a therapy – or more likely a combination of therapies – that can reliably provide patients with a functional cure, the way drugs such as Sovaldi sofosbuvir, Gilead Sciences Inc.), Viekira Pak (ombitasvir, paritaprevir and ritonavir, Abbvie Inc.) and Zepatier (elbasvir and grazoprevir, Merck & Co. Inc.) have done for HCV.

Compared to HCV, however, HBV is considered much more difficult to treat because, unlike HCV, it is a DNA virus, meaning it is capable of penetrating the nucleus of liver cells, thereby existing as a covalently closed circular DNA, or cccDNA, also known as a "minichromosome." HBV also produces a multitude of antigens, particularly the surface antigen, which keep the immune system suppressed.


A number of companies are working on getting to HBV where it lives by targeting the HBV genome via RNAi approaches such as Arrowhead's ARC-520.

Designed to intervene upstream of the reverse transcription process where nucleoside/nucleotide analogues act, ARC-520 aims to silence the production of all HBV gene products via siRNA that engage the body's normal cellular RNAi machinery and direct specific cleavage of HBV RNA transcripts. That reduces the levels of HBV proteins and the RNA template used to produce viral DNA.

Pasadena, Calif.-based Arrowhead had advanced ARC-520 into phase II testing, though the FDA recently placed the Heparc-2004 phase II trial on clinical hold following deaths in a nonhuman primate study when the drug, formulated with the ARC-EX1 delivery technology, when administered at the highest dose. Analysts are unclear when that hold might be lifted, though Piper Jaffray's Edward Tenthoff noted that overseas studies of ARC-520 are ongoing. (See BioWorld Today, Nov. 10, 2016.)

Prior to the hold, Arrowhead had wowed with early data. Top-line results from a phase IIa reported last year showed that ARC-520 significantly reduced HBV surface antigen (HBV) surface antigen, in particular with patients who tested positive for the HBV e-antigen (HbeAg-positive) associated with active viral disease. (See BioWorld Today, Sept. 25, 2015.)

Earlier in development, Arrowhead has ARC-521, another RNAi candidate, which is designed to target HBV gene products from both HBV cccDNA and integrated HBV DNA. The idea, as Arrowhead has explained, is that ARC-520 could be used to treat patients with higher cccDNA, while ARC-521 might be optimal for those with lower cccDNA. ARC-521 is in a phase I/II trial.

Also working on an RNAi approach is Vancouver, British Columbia-based Arbutus. It is in phase II testing with ARB-1467, which comprises three RNAi triggers and targets all four HBV transcripts. In preclinical studies, it was shown to reduce all viral antigen levels as well as cccDNA and HBV DNA, and interim data reported in September from the multidose phase II study showed ARB-1467, as a single dose, significantly reduced serum hepatitis B surface antigen (HbsAg).

A next-generation candidate, ARB-1740, is coming up behind, with an IND filing expected shortly.

RNA stalwart Alnylam is also in the game. It is conducting a phase I/II trial of ALN-HBV, which targets transcripts in both cccDNA and integrated DNA. The Cambridge, Mass.-based company launched the study earlier this year. It is testing safety and tolerability as the primary endpoint, with secondary endpoints including a change in HbsAg levels from baseline, according to Cortellis Clinical Trials Intelligence.

Definition of 'Cure'

To adequately tackle HBV, KOLs continue to expect that a regimen would need to comprise at least one direct-acting antiviral (DAA) in combination with an immune stimulator, wrote Jefferies analyst Eun K. Yang in a research note. The DAAs could include any of the approved nucleoside/nucleotide analogues or the RNAi candidates in development. Another possibility could be Assembly's small-molecule modulator of the HBV core protein. Its CpAMs, or core protein allosteric modifiers, have demonstrated potential for eliminating HBV by modulating the core protein at multiple points in the viral life cycle. Its first-generation compound is in phase I development.

Carmel, Ind.-based Assembly presented data at the AASLD meeting from a preclinical study that compared its CpAM series to entecavir in the ability to suppress both HBV replication and establishment of cccDNA. While both exhibited viral load reduction in HepAD38 cells and in hepatoma cells transiently transfected with Gt-A-D-expressing vectors, entecavir, which functions as a chain terminator during reverse transcription, reduced intracellular HBV DNA by about 90 percent; CpAMs, on the other hand, which block pregenomic RNA encapsidation, were able to suppress HBV DNA replication closer to 99 percent.

Another capsid-based approach is in the works. Advanced by Novira Therapeutics Inc., NVR 3-778 is designed to disrupt the HBV life cycle by inducing the assembly of defective capsids and inhibit HBV replication. Novira was ready for phase II of the candidate when the firm was snagged by Johnson & Johnson last year.

J&J reps were among the speakers at the AASLD HBV seminar and "made a number of interesting comments," according to RBC's Yee, who added that "we think [the big pharma] could acquire more companies in time," with an eye on combination approaches and adding immune therapies to the mix.

Other big pharmas could start making M&A moves as the HBV space advances. With oral DAAs already on the market, Bristol-Myers Squibb and Gilead Sciences seem the most obvious candidates, the latter, in particular, facing pressure to get going on the dealmaking front. (See BioWorld Today, Nov. 3, 2016.)

Likely firms will wait and see when phase II data start reading out, as well as results from combination trials already in the works such as Arrowhead's recent deal with Spring Bank, of Hopkinton, Mass., to conduct studies testing ARC-520 plus Spring Bank's SB 9200, a small-molecule, orally available selective immunomodulator compound. The companies plan to study the agents together first in preclinical models before adding a cohort to Arrowhead's ongoing MONARCH phase IIb trial, in which patients will receive a dosing regimen that includes ARC-520, SB 9200 and an oral DAA.

The primary endpoint will be the percentage of patients achieving a 1-log reduction in HBsAg vs. baseline.

For now, the HbsAg endpoint seems to be the best outcome measurement, as per current consensus, though the FDA has not ruled out requiring liver biopsy data, as were required during trials for the earlier-approved DAAs. During the AASLD/EASL HBV Treatment Endpoints Workshop in September, experts "suggested two definitions of a cure," wrote Jefferies' Yang. One was defined as functional cure based on HBsAG loss/seroconversion or undetectable HBV DNA, while the second was complete cure, defined as loss of cccDNA, HBV DNA and HBsAg.

Feedback from those experts "suggested it's not exactly clear what [the] FDA will want ultimately for approval," said Yee, also referencing the September meeting, "but they are working with experts and sponsors just like in hep C and NASH recently to get agreement and catch up with the new science."