Deals, Drug Development

J&J scraps a multibillion-dollar hepatitis C program after rivals divvy up the market

After committing billions of dollars to a new hepatitis C cocktail that had the potential to compete with the already deeply entrenched rivals on the market, J&J is calling it quits.

Drawn to hepatitis C at a time when the field was undergoing a dramatic shift in coming up with a painless resolution of the disease, that work is now done. Gilead led the way in curing hep C, followed by a slew of competitors who have been whittling down the cost as they scrambled to find new and better ways to do the job ever quicker.

J&J had been a leading figure in that better/faster/cheaper field, but is now bowing out after reporting stellar Phase IIa data a year ago. Once the mid-stage program is done, says J&J {JNJ}, they’ll suspend their work in hep C.

Milind Deshpande

That’s a disaster for Achillion $ACHN, which partnered its NS5A drug odalasvir (ACH-3102) with the pharma giant in a $1.1 billion pact. The pharma giant also bought out Alios for $1.75 billion, gaining the nucleotide NS5B inhibitor AL-335, which was added to a portfolio that also included the NS3/4A protease inhibitor Olysio, an approved therapy in-licensed from Medivir.

Medivir noted that the crash of J&J’s cocktail program does not change the terms of its licensing pact with J&J, but it certainly will have an impact on its potential in this crowded market.

Medivir’s shares dropped about 8% on the news {STO: MVIR-B} while Achillion stock dropped 6%.

Achillion found out about the decision on Saturday, giving it some time to pull together its own response to the abrupt termination of the cocktail effort in an effort to calm investors. Said Achillion CEO Milind Deshpande:

While we believe that patients worldwide would benefit from convenient, short-duration therapies like JNJ-4178, we remain fully focused on advancing our factor D portfolio of complement alternative pathway inhibitors in areas where patient needs are greatest, and using our strong balance sheet of almost $370 million in cash and cash equivalents at June 30, 2017 to do so.”

J&J execs say they’ll now shift all their focus to a functional cure for hepatitis B.

“Going forward, our hepatitis R&D efforts will focus on chronic hepatitis B, where a high unmet medical need still exists. Our scientists are energized by this challenge and our research ambition is to achieve a functional cure of hepatitis B which affects over a quarter of a billion people globally,” said Lawrence Blatt, the head of infectious disease at Janssen. “At Janssen, we focus our research and development on areas of greatest unmet medical need where we can combine our excellent internal science with the best available external innovation to bring optimized solutions and maximum benefit to patients.”


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