West Coast Editor
Idenix Pharmaceuticals Inc.'s layoff of about one-third of its work force could knock down the firm's burn rate by as much as half, as it retools the deal with Novartis AG for the approved hepatitis B drug Tyzeka and turns efforts toward early stage compounds for hepatitis C virus and HIV.
Shares of Idenix (NASDAQ:IDIX) closed at $2.89, down 14 cents, on word of the restructuring, which sends about 100 employees out the door, reducing expenses between 40 percent and 50 percent.
Under the new terms of Idenix's deal with Basel, Switzerland-based Novartis, the overseas pharma giant takes over all responsibility for Tyzeka (telbivudine) and pays Idenix royalties. The FDA cleared Tyzeka about a year ago, and the drug is branded Sebivo outside the U.S.
"There are Phase IV trials ongoing, and it's still gaining approval in places worldwide," said Teri Dahlman, senior manager of corporate communications for Cambridge, Mass.-based Idenix, which will incur between $5 million and $10 million in charges as a result of the restructuring, mainly in severance benefits and asset write-offs.
Idenix still expects to end the year with cash, cash equivalents and marketable securities totaling between $100 million and $110 million. The new plan will save $40 million to $45 million yearly, and officials said the firm is positioned to fund its HCV and HIV work through 2009.
Idenix has a non-nucleoside reverse transcriptase inhibitor, IDX899, for HIV in Phase I/II trials. The next-generation nucleoside polymerase inhibitor program for HCV includes preclinical IDX102 and IDX184, as well as efforts for HCV with a non-nucleoside polymerase inhibitor and protease inhibitor.
In July, the FDA quashed the company's nucleoside inhibitor valopicitabine for HCV because of gastrointestinal side effects, though Phase II data seemed encouraging otherwise. Idenix's stock fell 38 percent on the news. The firm had reduced dosing in a spring 2006 Phase IIb trial, hoping to avoid the GI trouble, and Wall Street trimmed the stock that day by 28 percent.
Novartis, which owns 56 percent of Idenix and holds the right of first refusal on Idenix's pipeline, exercised its option to license valopicitabine anyway. (See BioWorld Today, March 30, 2006, and July 16, 2007.)
Clinical trouble put the skids, at least temporarily, on another drug candidate in August: Exton, Pa.-based ViroPharma Inc.'s orally dosed non-nucleoside polymerase inhibitor HCV-796, used in combination with standard therapy. Elevated liver enzymes caused ViroPharma to suspend dosing in a Phase II trial with the drug, partnered with Wyeth Pharmaceuticals. (See BioWorld Today, Aug. 13, 2007.)
HCV-796 still could pan out. While sifting through the safety data, ViroPharma and Wyeth said they would continue the study through 48 weeks, giving all patients only interferon and ribavirin, to determine whether a short-term treatment with HCV-796 has a long-term effect on viral load reduction.
"It's a tough space," Dahlman noted, pointing also to news this month that Basel, Switzerland-based F. Hoffmann-La Roche Ltd. placed a hold on the development program for MAXY-alpha, a PEGylated interferon-alpha licensed from Maxygen Inc., of Redwood City, Calif., that was in early human studies for treating HCV and HBV. A preliminary analysis of Phase Ia study data showed there were lower drug levels in serum than expected. (See BioWorld Today, Sept. 24, 2007.)
The FDA has been mulling tighter scrutiny of would-be HCV compounds, and convened a meeting of the Antiviral Drugs Advisory Committee late last year to examine the issue. Research into HCV, where pegylated interferon and ribavirin have long been standard of care, represents "new territory," Dahlman said. "There are some learning curves." (See BioWorld Today, Nov. 1, 2006.)
More players are coming into HCV because of the market opportunity, and all face similar preclinical hurdles. "It's difficult to replicate the virus [for testing], and animal models are hard to find," she said.