On Monday, the pharmaceutical giant Roche announced its acquisition of Anadys Pharmaceuticals (NASDAQ: ANDS) for $3.70 per share, a 256% premium over the closing price Friday of $1.04 per share. Anadys is a small company focusing on novel therapeutics for patients with hepatitis C virus (HCV), a disease space continuing to gain attention as drug candidates from a variety of companies advance through clinical trials and begin to secure FDA approval. Anadys’ program in HCV includes a non-nucleoside viral polymerase inhibitor called Setrobuvir and an oral molecule that induces natural interferons, ANA773. The company recently announced favorable interim data from its Phase 2b trial of Setrobuvir in combination with the standard of care, and ANA773 is expected to report data later this quarter concerning a small 28-day trial in combination with ribavirin.
The current standard of care for HCV is injected pegylated interferon and the oral nucleoside analog ribavirin; Roche currently sells interferon as Pegasus and has sold ribavirin in the past as Copegus. Recent press has focused on sales of Vertex’s Incivek and Merck’s Boceprevir, the only two FDA-approved protease inhibitors for genotype 1 HCV. Pharmasset is another company working in the HCV space with nucleotide analog polymerase inhibitors displaying promising results in clinical trials, resulting in an incredibly impressive run-up in share price over the past year. Anadys is yet another company hoping to gain prescriptions in the large HCV therapeutic space. It should be noted that Vertex and Merck both produced novel proteases that are used in combination with the standard of care, but Anadys and Pharmasset are hoping to actually remove interferon from the typical HCV regimen. Vertex’s attempts in this arena have been unsuccessful so far. Pharmasset’s efforts towards an all-oral HCV treatment regimen have been covered in detail. Anadys’ orally administered ANA773 could stimulate interferon production without injected drug, which would be another way of moving to an all-oral regimen without eliminating interferon therapy altogether.
The data from clinical trials has been promising so far, which should go without saying considering Roche was willing to pay such a large premium for the company. Interim data from the ongoing Phase 2b study of Setrobuvir in treatment naïve patients, partial responders to previous treatment, relapsers, and null responders has demonstrated favorable 12 week efficacy data and 19 week safety data. Patients in this study are being given interferon and ribavirin and randomized to either Setrobuvir or placebo. Adverse events have occurred at a rate expected for patients on HCV therapy with a higher incidence of rash in the treatment arm (39%) than in the placebo arm (22%). Management maintains that this is an abnormally low rash rate for standard of care, and most rashes were low grade events in the treatment arm. In the treatment-naïve group, 78% of patients had achieved undetectable HCV by week 12 vs. 56% in the control arm. The 12 week response rates for the partial responder/relapsed group was 76% vs. 44%, and 29% of previous null responders had undetectable HCV by week 12. The primary endpoint of the study is sustained viral response at 24 weeks (SVR24), and full results will be announced in the coming months as the study is not yet complete. ANA773 is in the middle of Phase 2a study as an activator of innate immunity. In August of 2009, favorable results from Phase 1 study were announced, demonstrating that ANA773 does stimulate the immune system and causes a decline in HCV. Development of ANA773 was put on hold to advance Setrobuvir, but Anadys decided in 2010 to resume development of the drug.
With favorable preliminary data in hand, Roche can utilize its big company muscle to advance these two candidates through the clinic towards patients who desperately need better treatment options. As more drugs reach the marketplace and step into the ring with ribavirin, interferon, and the protease inhibitors, it will be interesting to see what cocktail becomes the new standard of care. Will an interferon-free or all-oral regimen ever be realized? Which drugs will be first line treatment for a newly diagnosed patient? Which therapies will be employed for partial and null responders? These are all interesting questions which will impact returns on companies in the HCV space for years to come, and it will probably be a long and volatile journey to the end.
Disclosure: No position.
