Hep C story makes Gilead impervious to bad news

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Gilead Sciences is the company that cannot be stopped. The bad news on Monday that the FDA had rejected Stribild components elvitegravir and cobicistat in HIV barely nicked its share price; now the emerging phase II data for its hepatitis C combination of sofosbuvir and lepidasvir, suggesting that it might achieve high cure rates as an interferon and ribavirin-free regimen in as little as eight weeks, has sent the stock skyward by 4%.

By the end of 2013 the sector should have the final word on how Gilead’s pill will stack up to AbbVie’s four-pill combination, the only treatment that is as far advanced. The shortening timeframe for a viral cure makes the Gilead pairing look increasingly unassailable and could push launch forecasts even higher, though it ought to have many reviewing their assumptions about commercial durability.

Living in interesting times

The California group announced interim data from the Lonestar trial, a phase II study of the fixed-dose combination of the NS5B polymerase inhibitor sofosbuvir (GS-7977) and NS5A inhbibitor lepidasvir (GS-5885). Eight weeks of treatment in genotype 1 patients who had never taken a hep C drug before yielded a 95% viral suppression rate eight weeks after the end of the regimen (19 of 20 patients), and combined with ribavirin it cured all 21 patients in that wing of the trial.

The two drug combination taken for 12 weeks resulted in a 100% cure rate in 19 treatment-naive patients four weeks after concluding the regimen, and in those who had been treated before the cure rate was 95% with or without ribavirin.

Based on the results, Gilead has added a third component to its Ion phase III programme, an eight-week test of the fixed-dose combination with or without ribavirin and 12 weeks without ribavirin in the treatment-naive population. The group also amended the Ion-2 trial in treatment-naive patients to shorten one arm of the fixed-dose combination to eight weeks.

Excitement over progress on hep C completely overshadowed Gilead's first-quarter results, which missed analysts' profit estimates. For a normal company this might lead to a share price decline, but this is the stock market darling Gilead, and hep C is all investors are worried about right now.

Competitive picture

The results mean there is the potential for phase III data on Gilead’s interferon and ribavirin-free combination to be out by the end of 2013 or early 2014, or on about the same schedule as AbbVie with its combination that includes a protease inhibitor and ritonavir (EASL 2013 – In the shadow of Gilead, hep C progress continues, April 24, 2013).

A chief aim of hep C researchers has been to eliminate interferon, as this has influenza-like side effects that can be a barrier to treatment. However, ribavirin carries with it risk of birth defects and haemolytic anaemia, and thus reducing these safety issues too would be considered a further step forward.

The first generation of direct-acting antivirals, Vertex Pharmaceuticals’ Incivek and Merck & Co’s Victrelis, still require an interferon/ribavirin backbone. Gilead and AbbVie are both closing in on data that could support eliminating the mainstay treaments; sofosbuvir has already been submitted to the FDA as a combination treatment with ribavirin in genotypes 2 and 3, and with interferon and ribavirin in genotypes 1, 4, 5 and 6.

An eight-week, single-pill combination would be a formidable competitor, as AbbVie is no doubt keenly aware – not to mention players like Bristol-Myers Squibb, Vertex Pharmaceuticals, Merck & Co, Johnson & Johnson and Boehringer Ingelheim (Presidio underpins Boehringer’s hep C strategy, April 29, 2013). However, a shortened regimen also raises the potential for an even steeper launch trajectory that hits a plateau, or even decline, sooner than now is commonly thought.

Analysts from the ISI Group said an eight-week cure raised the possibility that six full cycles of patients could achieve viral suppression in the first year, rather than four under a 12-week treatment regimen. This has the potential to compress more of the sales into that first year – EvaluatePharma’s consensus forecasts sofosbuvir sales of $2.9bn in 2015, and for the fixed-dose combination the number is $635m.

Historically, sales of hep C products have been concentrated in the first year – such as the interferons Rebetron, Pegintron and Pegasys. Ask Vertex: Incivek once had a 2013 forecast as high as $2.5bn, but instead probably peaked last year at $1.2bn in its first full year on the market, although that falloff has been amplified by progress of sofosbuvir and assumptions that patients are being “warehoused” until they can get an interferon-free regimen.

While there are plenty of reasons to believe that sofosbuvir and the single-pill combination will be runaway hits, it would be a good time to assess expectations. Hep C is not like HIV, where a patient can expect to take a drug for long periods of time.

A shorter treatment regimen might mean a greater sales spike on introduction, but it raises the possibility that those warehoused patients, if they exist, are exhausted more quickly. Pricing will be crucial to maximise revenue. Get it wrong, and Gilead faces disappointment in subsequent years.

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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