Inhibitex soars on interferon-free hopes


In normal circumstances phase I data would need to be pretty spectacular to add $350m to a company’s market value but, in hepatitis C at the moment, even some very early successes are being richly rewarded. This was seen with Inhibitex on Friday, which doubled in value on the back of encouraging yet very early-stage data on INX-189, raising hope that the nucleotide polymerase inhibitor could become part of an interferon-free treatment regimen.

With much data emerging at the moment from The Liver Meeting (AASLD) in San Fransisco on other drugs showing similar potential, the hurdles for the hep C pipeline are moving ever higher. Doctors are reportedly already “warehousing” patients in anticipation of being able to combine potent direct-acting anti-virals and eliminate tough-to-tolerate interferons – a remarkable occurrence considering only one all-oral combination is in phase III, and that study only started this month. Inhibitex management reckon they will be one of the first to meet this pent up demand – a bullish prediction that piles on the pressure to deliver.

Small cohort

Although INX-189 is in a larger phase II study, in combination with interferon and ribavarin, results from the first cohort tested in a phase Ib all-oral trial set the stock alight Friday. An arm – of only ten patients – given a high 200mg dose of the drug alone registered a big drop in viral load over seven days, with no adverse events reported.

The company is also testing other cohorts of 100mg doses with and without ribavirin, to test the agent’s potency without interferon. The results of the monotherapy arm suggest big potential.

Analysts at UBS reckon these results mean the drug looks similar to Pharmasset’s PSI-938, another nucleotide polymerase inhibitor which is being trialled in a combination all-oral phase IIb trial. Hopes for this agent, and Pharmasset’s lead compound PSI-7977, also a nucleotide analogue, have helped drive the New Jersey company’s market value to more than $5bn.

Earlier this month Pharmasset started the first all oral phase III study with PSI-7977, plus ribavirin; the company hopes to file for approval in the second half of 2013.

Meanwhile data released at The Liver Meeting over the weekend from the phase IIb Electron study, showing that an arm testing PSI-7977 plus ribavirin produced a 100% cure rate in patients with genotypes 2 and 3 of the hep C virus – admittedly a relatively easier to treat cohort than genotype 1 – confirmed sky high hopes for the drug. Pharmasset shares were up 4% to $71.82 in early trade today.

Suitable combination

On a conference call Inhibitex executives said pre-clinical studies are underway with INX-189 to investigate suitable combinations with other direct acting antivirals, as well talks with potential partners. Meanwhile the feasibility of testing INX-189 at higher doses and expanding the ongoing phase II study to include all-oral arms is also being considered.

No potential partner or agent were named but hopes for a collaboration with a bigger player will have helped boost the shares last week – Inhibitex stock was up another 13% in early trade today, at $9.68, a six-year high valuing the company at $753m.

With Pharmasset and Bristol-Myers Squibb just announcing the expansion of their combination study of PSI-7977 with daclatasvir, an NS5A inhibitor, there is strong appetite from players in this field to test combinations of these experimental oral drugs in an attempt to reach the market first with an interferon free regimen. Inhibitex’s data should help attract partners or indeed takeover interest - Roche's recent purchase of another early stage hep C player in Anadys confirms big pharma's commitment to the sector (Roche making up for lost time with Anadys purchase, October 17, 2011).

Tough race

Following a $50m equity financing in April the company has sufficient funds to push on alone for now, but a validating deal would certainly help support the company’s new lofty valuation. As will further strong data – news from other cohorts of the phase Ib study should emerge in the coming months, and strong potency and clean safety profile is needed.

INX-189 is still a very early stage drug. Progress is hep C is happening at a remarkable rate, but not all will cross the finishing line in a race that will become increasingly hard fought.

“We believe the interferon free era will come late 2015 and early 2016 and we would anticipate, from a time perspective, being competitive with that," Inhibitex's chief executive Russell Plumb told analysts on the conference call.

That implies a speedy and hitch-free development pathway - quite a claim for an asset that has yet to enter all-oral phase II trials. Inhibitex's share price implies some are willing to go along with Mr Plumb's predictions - a show of faith that hepatitis C is inspiring in investors right now but that is unlikely to be universally rewarded.

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