Replies to post #72837 on Biotech Values

[rkrw]

I guess the deal is ok given it's still pretty early. Look for idix to do a fund raise in the next few months. imo.

[quantumdot]

IDIX - it is really only $17MM upfront cash with the rest just an equity raise. I would have thought you would be disappointed given your earlier stated expectation of $25MM as a lower bound to the upfront in the partnership announcement.

[DewDiligence]

The New Battle Lines in HIV (GILD JNJ IDIX/GSK RDEA)

GILD’s Truvada franchise is so firmly established as the backbone of therapy in the early lines of treatment that there is little to no chance of anything replacing it in the near future (#msg-26915314, #msg-35137606). Moreover, Truvada and BMY’s Sustiva have been combined into a single pill—Atripla—that is taken once daily and sets a standard for convenience (and hence compliance) that a twice-daily regimen cannot hope to match. Thus, from a business standpoint, the interesting question is which once-daily drugs, if any, will be able to supersede Sustiva as the favored “third” drugs in Truvada-based regimens.

Inasmuch as Truvada consists of two nucleoside reverse-transcriptase inhibitors—Viread and Emtriva—the third drug in a Truvada-based cocktail will clearly come from a different class. The main options are non-nucleoside reverse-transcriptase inhibitors (NNRTI’s), protease inhibitors (PI’s) and integrase inhibitors (II’s).

However, the market has been moving away from the use of PI’s in early lines of therapy because they have a relatively poor resistance profile and mediocre tolerability. Reyataz from BMY and Kaletra from ABT, the two biggest-selling PI’s, have been steadily losing share (e.g. #msg-35109525).

Thus, NNRTI’s and II’s that can be dosed qD are where the action will be. The leading candidates to gain traction (IMHO) are as follows.

1. Elvitegravir/Quadro from GILD. Elvitegravir is an II similar to MRK’s Isentress, which is already on the market and doing about $500M in annualized sales; however, Elvitegravir has the crucial advantage of being dosed qD with help from a PK-boosting agent.* Quadro is the name for the 4-drug combo that includes Elvitegravir, Truvada, and GILD’s proprietary PK-booster called GS9350. Elvitegravir is in phase-3 (#msg-30900183) and Quadro is about to enter phase-2 (#msg-35131829). As the owner of Truvada, GILD enjoys the advantage of not needing cooperation from any other company in order to formulate Quadro into a single pill.

2. TMC278 from JNJ, a qD NNRTI in phase-3 (#msg-31354706, #msg-30789106). TMC278 is similar to Intelence (a.k.a. TMC125), JNJ’s marketed NNRTI that has the drawback of being dosed BID.

3. IDX899 from GSK/IDIX, a qD NNRTI about to start phase-2 (#msg-31925486). IDX899 has antiviral efficacy even at extremely low doses (#msg-31944395), which fosters its ability to be combined with other HIV drugs in a single pill with a small form factor. Moreover, IDX899 has a stronger barrier to resistance than Sustiva (#msg-35431633) and it lacks cross-resistance to Sustiva, which preserves the option for patients to use Sustiva in a subsequent line of therapy. I thought the economic terms of the IDIX-GSK partnership announced last week were impressive for a drug that has not yet started phase-2 (#msg-26884307).

4. RDEA806 from RDEA, a qD NNRTI in phase-2b (#msg-33138650, #msg-31315602). Although RDEA806 is further advanced than IDX899, it is not yet partnered despite RDEA’s stated intention to partner it. This the reason I have ranked RDEA806 one notch below IDX899.

*MRK recently started a phase-3 Isentress trial with qD dosing and could submit an sNDA in 2011; however, I consider this trial a long shot.

[DewDiligence]

IDIX – This article has the only discussion of the IDX899 deal I’ve seen
that asks (but does not answer) the question I asked in the prologue of
#msg-35391933: How will GSK integrate IDX899 into a marketing
strategy for the HIV market? GSK’s two HIV combo pills—Epzicom
and Combivir—are essentially obsolete products. Co-formulating IDX899
with Epzicom or Combivir won’t make either or them capable of competing
with Atripla. Comments appreciated.

http://www.pipelinereview.com/content/view/25201/309/

›GSK Renews HIV Pipeline

15-Feb-2009

GlaxoSmithKline and Idenix are to co-develop IDX899 for the treatment of HIV infection. Despite having eight marketed HIV products, GSK lost its position as market leader to Gilead in 2007. The new collaboration with Idenix will, however, help the company to maintain its share in the fiercely competitive HIV market.

Idenix Pharmaceuticals, Inc and GlaxoSmithKline (GSK) have entered into a license agreement, granting GSK exclusive worldwide rights to IDX899. Under the terms of the agreement, GSK will assume all development responsibility and associated costs for IDX899, while Idenix will receive an upfront payment of $34 million and will be eligible to receive up to $416 million in development, regulatory and sales milestones. Furthermore, if IDX899 is successfully developed and commercialized, Idenix will receive double-digit, tiered worldwide royalties.

IDX899 is a novel non-nucleoside reverse transcriptase inhibitor (NNRTI) in Phase II trials for the treatment of HIV/AIDS. While NNRTIs are a popular choice for first line therapies, they are prone to resistance and Sustiva, the class leader, is associated with central nervous system-related side effects. Studies to date have shown that IDX899 has high potency with low milligram doses, activity against NNRTI resistant strains and once-daily administration. The possibility of once-daily dosing with IDX899 offers the opportunity for co-formulation with GSK's nucleoside reverse transcriptase inhibitors (NRTIs).

Currently, GSK is marketing its leading [???] NRTI fixed dose combination of abacavir and lamivudine under the brand name Epzicom. Adding IDX899 as a third component would provide the company with a triple combination similar to Gilead's and Bristol Myers Squibb's Atripla. However, GSK is currently facing setbacks with Epzicom: the drug is already associated with a hypersensitivity reaction, and data from the ACTG 5202 study have shown higher rates of biologic failure in Epzicom patients with high viral loads. Additional data from the Data Collection on Adverse Events of Anti-HIV Drugs (DAD) cohort and the SMART study suggest an increased risk of myocardial infarction associated with use of abacavir. This decreases the attractiveness of a triple combination including IDX899 and Epzicom [no kidding!]

Gilead replaced GSK as market leader in the HIV segment in 2007. GSK has eight marketed products, but many of its brands are relatively old and face patent expiration. In addition, several late-stage R&D setbacks over the past two years have left the company bereft of any HIV compounds in active clinical development. Consequently, the in-licensing of IDX899 provides a much-needed pipeline boost. While the collaboration with Idenix may not be sufficient to restore the company's leading position, Datamonitor believes that it could help GSK to maintain its share in a market which is becoming fiercely competitive.‹