Biotech Values

[oc631]

Notwithstanding the strong early data, I think it's still too early to say that the two VRUS nukes alone will be sufficient to eliminate interferon from the equation.

There still is plenty of risk and this is very early data. The speed at which this two drug combination knocks down the virus to near undetectable levels could mark the end of interferon. The virus doesn't have the time to build resistance or mutate.

It's presumably much less likely that the two can remove ribavirin from the equation as well.

I'm more comfortable saying Riba is done with, considering it's just a weak nucleoside which works very well with interferon, and the testing we are currently seeing in combo with Riba is just a slow shedding of SOC.

Regarding your prediction of future three drug combos just being used for nulls in a second line setting, if such a narrowed opportunity comes to pass for a 2nd gen PI such as ACHN's ACH-1625, what do you make of the valuation of ACHN at ~$400M market cap in light of such a reduced market opportunity?

I don't follow ACHN as closely as I once did. You brought to my attention ACHN-1625 is a pan-genotypic drug with QD dosing which are very desirable characteristics in a safe drug. Just as in HIV therapy there will always be a future need for new classes of drugs to remain ahead of the virus. Regardless the revelation that nucleotides work so well together, without SOC, isn't a positive development for ACHN and considering the weaker resistance profile of the PI class my guess is ACHN-1625 will only play a supporting future role on top of the dual nuke backbone. The safety, tolerability, and required dosage of interferon lambda could determine the prospects of ACHN-1625 in the second line setting.

I totally agree with you on VRUS' position in the marketplace. The one big concern I have is that things seem to be priced for perfection so what if there is an unforeseen event such as a safety issue that crops up when the two nukes are tested together in longer-duration Phase 3 studies?

The stock drops, I lose money, and all bets are off.