October 27, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Executives at biopharma behemoth Merck & Co., Inc. seem to be downplaying the possible success of their experimental drug planned to compete with Gilead Sciences, Inc. ’s runaway blockbuster hepatitis C drug Harvoni, an analyst said Monday.
Geoffrey Porges, a biotech analyst at Sanford Bernstein, wrote in a note to investors that this morning’s 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 eigh 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.”
