Boehringer hep C venture a mild balm for Presidio investors

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Presidio Pharmaceuticals’ attempts to swing for the fences have so far only produced foul balls. An attempt to merge with BioCryst Pharmaceuticals ended without an exit for its venture capital and private equity backers, and now partnership talks seem to have resulted in a non-exclusive hepatitis C collaboration with Boehringer Ingelheim.

With the magnitude of the hep C opportunity still unclear as Gilead Sciences’ superstar sofosbuvir speeds through late-stage trials, it must be encouraging to the San Francisco group that big pharma is interested in PPI-668 – it does fill a hole in the private German group’s pipeline. However, with the $11bn Gilead pill having passed a phase III programme with ribavirin in multiple hep C strains, even the pan-genotypic promise of the Presidio compound must be a diminishing draw.

Combinations

On the face of it, the partnership is sensible and certainly not unprecedented in the world of hep C development. Gilead and rival Bristol-Myers Squibb teamed up non-exclusively to test sofosbuvir and daclatasvir together, a venture that helped advance both through a mid-stage study, although Gilead’s compound has been the greater beneficiary (EASL - Gilead-BMS score all-oral hep C win but will pairing last?, April 19, 2012).

More recently, Idenix did something similar with Johnson & Johnson in combining IDX719 with simprevir and TMC647055. And Gilead, despite the falling out with Bristol-Myers, remains in the non-exclusive collaboration game, as it recently published results of a phase II trial with the J&J/Medivir agent, simeprevir.

The trouble for Presidio is that its investors were incredibly close to an exit, or at least realisation of some value, with the BioCryst merger. That transaction fell apart as the share value of the publicly traded partner plummeted after withdrawing lead hep C candidate BCX5191 and the phase III failure of flu antiviral peramivir (BioCryst investors breathe sigh of relief, but what’s next?, December 3, 2012).

There is no doubt that it is nice to get nibbles from potential partners, or indeed, acquirers. Upfront payments and contractual obligations would be nicer, however. And Boehringer, with its two candidates, will have useful data on how its protease inhibitor faldaprevir and non-nucleoside NS5B polymerase inhibitor work with a NS5A inhibitor – leaving only one drug to acquire should it not be able to reach attractive terms with Presidio.

In other words, Boehringer could be negotiating from an even stronger position than is usual in the partnership dance should it retain an interest in '668. Given that the German company is already in phase III with those compounds in both monotherapy and as a combination, it does not really need Presidio – which likely goes a long way toward explaining why the private California group will be in charge of running the trials, and why an option deal at a minimum was not struck.

Full value

Presidio executives would no doubt point to the fact that it has retained the full value of its research, and that is very much true, even if time is growing short. The group has little to lose with its arrangement with Boehringer – it advances a drug into phase II and it will get valuable information on how well ‘668 might work with its own NS5B inhibitor, PPI-383, enhancing the value of its intellectual property.

But it remains that sofosbuvir will likely launch next year as a combination therapy with interferon and ribavirin, with the hope that 2015 will see a launch of an all-oral, interferon- and ribavirin-free combination with ledipasvir. Presidio’s candidates remain far back in the pack.

HIV has proven that there is room for several antiviral combinations based on improved efficacy and side-effect profile; but unlike HIV, hep C can be cured, giving an incredible advantage to first movers. Presidio needs to advance quickly.

To contact the writer of this story email Jonathan Gardner in London at JonathanG@EPVantage.com or follow @JonEPVantage on Twitter

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