continued speculation that it could be the next target of a buyout for companies seeking a Hepatitis C treatment, caused Achillion's shares to surge over 80 percent on the day.
The FDA’s hold on New Haven, CT-based drug maker Achillion’s research on its hepatitis C drug, sovaprevir, dates back to June of 2013. That’s when test results showed elevated liver enzymes after multiple patients took the drug. The company submitted more data demonstrating the drug’s safety, but the FDA opted to maintain the hold and officially halted Achillion's research on September 27, 2013. The decision left the fate uncertain for Achillion's most promising drug in the hepatitis C treatment market.
The price surge is also being driven by Merck & Co.'s (MRK) announcement to buy Idenix Pharmaceuticals Inc. (IDIX) on June 9. Similar to Achillion, Idenix is also working towards producing hepatitis C drugs. Indenix's lead drug, IDX-21437, is designed to work by stopping the hepatitis C virus from replicating in the body. Merck & Co. agreed to pay $3.85 billion for Idenix, which sets a new record highest premium for any health-care acquisition.
The buyout agreement between Merck’s and Idenix Pharmaceuticals lead to speculation that Achillion may be the next takeover target, prompting a 47.57 percent jump in Achillion’s stock on June 9, bringing the two-day gains to over 170 percent.
Achillion will pick up the study of sovaprevir that left last year on the second of three stages of testing required before approval. So far, the FDA only lifted the hold on the 200mg dose, but still maintains a trial hold on multiple-dose studies. According to the FDA, the drug requires “prior review and approval of the protocol.” Achillion also announced on Tuesday that it would initiate trials of another hepatitis C drug, ACH-3422, which, like IDX-21437, is a nucleotide inhibitor.
"With the start of patient dosing with ACH-3422, our phase one uridine-analog nucleotide, we remain on track to report proof-of-concept results in the fall, and plan on initiating all oral combination studies with ACH-3422 by the end of 2014," Achillion’s Chief Medical Officer David Apelian said.
The market for Hepatitis C treatments is an attractive one, estimated at $20 billion a year to provide care for over 170 million people worldwide. The hepatitis C virus attacks the liver and may potentially cause cancer, organ failure, and eventually the need for organ transplant. In such a demanding and highly profitable market, the competition between drug makers is intense.
For example, Gilead Sciences Inc. (GILD) and Merck plan to create drug combinations in the next few years that could help shorten the course of treatment. Currently, Gilead’s lead drug is Sovaldi, which is similar to Idenix’s IDX-21437 and Achillion’s ACH-3422, the first of these treatments to receive FDA approval and begin marketing to the public.
Other competing drug makers working towards developing or acquiring potential hepatitis C treatments, including Abbvie Inc. (ABBV) and Johnson & Johnson (JNJ) , have also seen a steady growth in their market prices over the past two years. Compared to Achillion’s speed bump last September, these two seem to be progressing well through their research.
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