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Stellar hepatitis C data puts Gilead farther ahead of pack

By Ransdell Pierson and Bill Berkrot

(Reuters) - Gilead Sciences Inc released impressive late-stage data Wednesday for its once-daily combination pill to treat hepatitis C, advancing its lead in the race to develop new, all-oral treatments for the liver disease, and pushed up its timeline for seeking U.S. approval.

Gilead unveiled initial results from three Phase III studies that demonstrated cure rates well in excess of 90 percent with as little as 8 weeks of treatment for some patients, and its share price rose 5 percent.

The findings were achieved without the use of either injectable interferon, which causes miserable flu-like symptoms, or ribavirin, an antiviral pill that carries its own troublesome side effects.

The tough-to-tolerate older drugs have led thousands of patients to delay treatment for the potentially fatal disease and await new options.

"The results certainly raise the bar and dim the outlook for competitors such as AbbVie, Bristol-Myers and Boehringer Ingelheim," Sanford Bernstein analyst Geoffrey Porges said of rival all-oral programs in development that require more drugs and more pills than Gilead's to achieve similarly high cure rates.

Porges, saying the new data could spell the end of ribavirin use and greatly expand the number of people seeking treatment, raised his peak sales forecast for Gilead's combination to an eye-popping $16 billion in 2016, declining to $6.8 billion by 2020 as the backlog of patients awaiting treatment declines.

Stifel analyst Joel Sendek forecast 2015 sales of $5.1 billion for the Gilead pill and said AbbVie would likely have offer its hepatitis treatment at a discount to compete.

Gilead said it would file in the first quarter of 2014 for U.S. approval of the combination treatment that pairs its just-approved Sovaldi (sofosbuvir) and its experimental ledipasvir. The company previously said it would seek marketing approval in the first half of next year.

Gilead shares closed up $3.51, or 5 percent, at $73.59 on Nasdaq.

The Phase III trials tested the combination pill in subjects with the most common, but hardest to treat, genotype 1 strain of the liver virus in both previously untreated patients and those who had failed to be helped by prior treatment. They also included patients with cirrhosis, who tend to be farther along in the liver-destroying disease.

ERADICATION ON THE HORIZON?

Sovaldi, which costs about $84,000 for a course of treatment, belongs to a class of drugs known as nucleotide analog polymerase inhibitors, or "nukes," designed to block an enzyme the hepatitis C virus needs to copy itself. Ledipasvir belongs to a promising new class of drugs that work by blocking the NS5A protein, which the virus also needs to replicate.

Current standard regimens include both interferon and ribavirin and must be taken for 24 to 48 weeks, curing about 75 percent of patients.

Gilead tested its combo pill at a variety of treatment durations both with and without ribavirin. But the high cure rates without ribavirin, which can cause rash, anemia and other side effects, are likely to grab most of the attention of physicians and investors.

In a study of 647 previously untreated patients without cirrhosis called ION-3, 94 percent achieved sustained virologic response (SVR), which is considered cured, after just 8 weeks of treatment, rising to 95.4 percent with a 12-week regimen.

In ION 2 - a trial of 440 more difficult to treat patients who were not cured by prior treatment, including 88 cirrhotics - 93.6 percent were cured by the once daily pill after 12 weeks, while the cure rate rose to 99.1 percent with 24 weeks of treatment.

In ION-1, which looked at 865 previously untreated patients, including 136 with cirrhosis, the Gilead pill cured 97.7 percent with 12 weeks of therapy.

"In general, the data position Gilead to dominate the genotype 1 landscape," ISI Group analyst Mark Schoenebaum said in a research note. He noted that Gilead's ribavirin-free regimen involved one pill once a day, while AbbVie's is six pills a day with ribavirin and four pills without, and includes a medicine that may interact with other drugs.

Genotype 1 accounts for about 70 percent of U.S. infections. Hepatitis C affects an estimated 170 million people worldwide, and if left untreated can lead to cirrhosis, liver cancer, or the need for a new liver.

Bernstein's Porges said given the convenience and cure rates of the new drugs, the hepatitis C conversation is likely to change from disease management to eradication.

"This is going to be very tempting for people to say, 'We can lick this'," Porges said. But he noted that demand for the drug will eventually decline as patients are cured.

"The long-term economics of curing patients is not good for the drug industry, but it's totally great for society."

(Additional reporting by Caroline Humer; Editing by Gerald E. McCormick, Theodore d'Afflisio and Cynthia Osterman)

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