Merck & Co. to Stop Selling Once-Hot Hep C Drug Victrelis

January 21, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Biopharma behemoth Merck & Co. will discontinue selling its hepatitis C treatment Victrelis, the company told the U.S. Food and Drug administration this week, as a wave of new drugs that are essentially cures for the disease have overwhelmed the market—and their competitors.

The news comes on the heels of a notification that Vertex Pharmaceuticals will discontinue its own Incivek drug for hepatitis C, a sign that the formerly hot protease inhibitors are now essentially dead in the water.

The two did add some value to their parents companies’ pipelines, however short-lived-- Victrelis sales peaked at about made around $502 million in 2012 alone, while Incivek raked in $1.2 billion during the same period.

But their ultimately slower progression rates and inability to compete with “miracle” drugs being pushed out by more focused competitors like Gilead Sciences, Inc. and AbbVie appear to have sounded the death knell for the class.

Gilead will likely see a continued strong launch of once-a-day hepatitis C pill Harvoni and will be helped by pent up demand despite its high price tag, predicted Yaron Werber, head of the biotech analysis team and Citigroup in New York, two months ago.

The U.S. Food and Drug administration approved Harvoni on Oct. 10. The pill, which is a cocktail of ledipasvir and sofosbuvir (known under the brand name Sovaldi), has been cleared for use in the main subtype of hepatitis, called genotype 1, which accounts for more than two-thirds of the nation’s cases.

Gilead has had high hopes for Harvoni, after clinical trials found that over 90 percent of the patients treated with the drug had no detectable virus in their blood three months after treatment was ended. In medical parlance, that is effectively a cure.

During the second week of launch Harvoni posted had 1,097 new prescriptions, up 147 percent of its first week on the market.

“This is much higher than any other hepatitis C drug launch,” said Werber, who said a corresponding downtick in Sovaldi is being compensated for by Harvoni. “We believe that Harvoni’s launch will be helped by patients’ pent up demand, shorter duration of therapy, growing adoption by a wider physician prescriber base, and less monitoring. Hence volume should expand considerably.”

Harvoni combines the NS5A inhibitor ledipasvir with the nucleotide analog polymerase inhibitor sofosbuvir. Harvoni’s efficacy has been established in patients with chronic hepatitis C virus (HCV) genotype 1 infection, with a treatment duration of eight, 12 or 24 weeks depending on prior treatment history, cirrhosis status and baseline viral load.

Eight weeks of treatment with Harvoni can be considered for treatment-naïve patients without cirrhosis who have baseline HCV viral load below 6 million IU/mL.

The interest in Harvoni may be pushing down the more expensive Sovaldi, however. During the week of Oct. 24, Sovaldi weekly total prescriptions and new prescriptions decreased 12.6 percent and 25.5 percent respectively, said Werber.

The high costs of both drugs remain controversial, however. A 12-week course of Harvoni costs around $94,500, while a similar course of Sovaldi will run as much s $84,000. Those price tags have had insurers and public health plans like Medicaid balking at backing the treatment or offering reimbursement. But the drug will still beat most analyst projections for sales.

“If Sovaldi scrips continue at the same level as the recent weeks without any growth, U.S. sales for 2014 would be around $8.8 billion,” he wrote in a note to investors. “When factoring in ex-US sales, this should lead to much higher sales worldwide compared to Citi $12.5 billion and consensus $11 billion.”

Still, the market may not be dead. In October, several analysts said that executives at Merck & Co., Inc. (MRK) seem to be downplaying the possible success of their experimental drug planned to compete with Harvoni,.

Geoffrey Porges, a biotech analyst at Sanford Bernstein, wrote in a note to investors that a call with Merck management did little dissuade Wall Street that it has similarly high-powered drugs in its pipeline to compete with Harvoni.

“Indeed, it is beginning to sound as though the usual Achilles' heel of short nuke-based regimens, which is relapse, sometimes late, is playing out with the C-SWIFT trial,” said Porges. “Based on Merck's commentary, we are increasingly confident that the downside threat to Gilead from strong data in the four week arm of C-SWIFT is unlikely to play out.”

Porges said that the “remarkable” 60 percent raise in Gilead's stock over the past year has been primarily driven by the company's market-leading hepatitis C franchise. He said the two near-term risks for Gilead's HCV franchise is the read-out of Merck's C-SWIFT study at the upcoming AASLD meeting on Monday Nov. 10.

That study tests Merck’s experimental drug MK-5172/MK-8742 doublet in combination with Gilead's Sovaldi (sofosbuvir, or SOF) for as little as four weeks in Genotype 1 & 2 patients, and for eight weeks in the harder-to-treat Genotype 3 patients.

“Should this triple combination deliver SVR rates above 90 percent, it could become a significant competitive and financial risk to Gilead's Harvoni and other oral regimens starting in 2016," he said.

"We and most investors expect Harvoni to be used for 8-12 weeks in most HCV patients for at least several years; beyond 2017 when three drug combinations reach the market duration seems likely to shorten to 8 weeks or less for many patients but any shortening in advance of 2017 would be a disappointment,” wrote Porges.

“We believe that the bar is now very high and requires the MK/MK/SOF triple to deliver a sustained SVR above 90% for the four weeks regimen to be viable,” he continued.

He added that during Merck’s third quarter earnings call today, analysts “listened carefully” to management's commentary about the C-SWIFT study, and “it seems that Merck are now downplaying expectations for the result at AASLD, suggesting that such shortening may only be viable for specific or unique patient subsets.”

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