West Coast Editor
About two months after disclosing positive interim Phase IIb results with telbivudine, its drug for chronic hepatitis B, Idenix Pharmaceuticals Inc. unveiled top-line data from the ongoing Phase III trial that show the compound reached its one-year primary efficacy endpoint of therapeutic response.
Wall Street proved lukewarm, with Idenix's stock (NASDAQ:IDIX) closing Friday at $25.46, down 54 cents.
"Investors expected the non-inferiority," which the study results show, said analyst Andrew McDonald with San Francisco-based ThinkEquity Partners. "They're looking for superiority." Idenix plans to disclose full one-year data at the November meeting of the American Association for the Study of Liver Diseases.
Partner Novartis Pharma AG, a unit of Basel, Switzerland-based Novartis AG, and Idenix designed the 1,350-patient Phase III trial to determine whether telbivudine was at least as effective as lamivudine, sold as Combivir by London-based GlaxoSmithKline plc, and Idenix plans to file for approval based on the one-year data, though the trial will last for two years.
Results were determined by evaluating the combination of viral suppression (serum HBV DNA suppression below 100,000 copies/mL) coupled with either improved liver function (normalization of the enzyme alanine aminotransferase, known as ALT) or loss of detectable hepatitis B e-antigen.
Investigators are comparing the safety and efficacy of telbivudine to lamivudine in patients with HBeAg-positive and HBeAg-negative compensated chronic hepatitis B for two years of treatment in two daily treatment regimens: telbivudine 600 mg or lamivudine 100 mg.
Telbivudine is a specific and selective, oral, once-daily nucleoside, unique in its preferential inhibition of second-strand HBV DNA synthesis. Still unanswered, noted McDonald, is the question of whether telbivudine statistically beat lamivudine.
Liver histology readings are not complete, although more about those are expected at the AASLD meeting. Based on the Phase II data, McDonald said, he expects telbivudine to be statistically superior to lamivudine in terms of viral suppression, ALT normalization and seroconversion.
"If the Phase III data look like the Phase II data, I think Idenix has a shot at being a front-line therapy, but they may face significant market risk, in that you already have patients well controlled on adefovir [Hepsera, from Gilead Sciences Inc., of Foster City, Calif.] and Viread [tenofovir disoproxil fumarate, also from Gilead, approved for HIV]," which is used off label for HBV.
"Can they induce well-controlled patients to switch? That's the big question, and I have some reservations," McDonald said.
Idenix watchers also will be comparing telbivudine's results to New York-based Bristol-Myers Squibb Co.'s Baraclude (entecavir), approved in March, and McDonald expects telbivudine to be "far superior" to that drug. (See BioWorld Today, March 31, 2005.)
"The only other HBV drug that's been compared head to head with lamivudine was entecavir," McDonald said, which allowed the latter to become the standard of care.
"Gilead has been working extremely hard at capturing as much market share as they can," he added. Hepsera sold $45.8 million in the second quarter and $42.7 million in the first.
"They're slated to sell about $180 million worth of Hepsera in 2005, vs. $112 million in 2004," McDonald said. "I don't think they're going to lose a whole lot of that market share."
Other questions to be answered about Idenix's drug involve lamivudine-refractory patients and resistance rates, he pointed out. Still, telbivudine's new drug application filing is expected by year-end with market launch in 2006.
Jean-Pierre Sommadossi, chairman and CEO of Idenix, said the company is building a broad profile of telbivudine with a series of trials.
One is a switching study, in which patients who have been on lamivudine for six months to 12 months are randomized to either continue or switch to telbivudine. Another is a head-to-head trial against Hepsera. Yet another is testing telbivudine in patients with decompensated liver disease.
"We will have a wealth of data before we launch the drug," he told BioWorld Today, predicting all data will be in hand "by the third or fourth quarter of 2006." He credited the Novartis partnership for the comprehensive trials.
"At least for biotech, it's pretty unusual to be able to do so many Phase III studies," he noted.
By coincidence, Idenix's apparently positive news about one-year telbivudine data comes about one year after the Cambridge, Mass.-based firm went public and raised funds through a placement with telbivudine partner Novartis AG. Idenix's initial public offering raised $64.4 million and Novartis, which owned 57 percent of Idenix pre-IPO, bought another 5.4 million shares for an additional $75.6 million. (See BioWorld Today, July 23, 2004.)
Also late Thursday, Idenix reported a dip in second-quarter earnings. The firm pulled in total revenues of $16.1 million, compared with total revenues of $42.8 million in the second quarter of 2004. For the six months ended June 30, Idenix's revenues of $31 million, compared with total revenues of $59.5 million for the previous year's six-month period, and the net loss added up to $22.7 million, or a loss of 47 cents per diluted share for the more recent period, compared with net income of $15.1 million, or 39 cents per diluted share for the 2004 period.
The profitability in the 2004 period was due to a $25 million milestone payment from Novartis in the second quarter. Idenix has $129.1 million in cash, cash equivalents and marketable securities.