Replies to post #81678 on Biotech Values

[DewDiligence]

From the ACHN PR you just posted:

We expect shortly to conclude our opt-in discussions with Gilead regarding our ability to advance ACH-1095 into the clinic on our own, and assuming the positive outcome of those discussions, we are actively preparing for a pre-IND consultation with the [FDA] regarding ACH-1095…

This language suggests that GILD may have the right to sub-license the program rather than simply returning the rights to ACHN. Have you investigated this point?

[mcbio]

ACHN - Notes on 2Q09 Conference Call

There were at least a few interesting notes from this call so I'll just try and note those here without rehashing things touched on previously:

1. The ongoing Phase 1 for the HCV PI ACH-1625 is going quite well executionally and the drug is behaving so far "quite consistent with its pre-clinical profile."

2. The multiple-ascending dose portion of this trial in healthy and HCV-infected patients will consist of 5 days of dosing. ACHN didn't specifically disclose this in the prior release disclosing that the trial had started.

3. The resistance profile for ACH-1625 was asked about during Q&A, in particular what differentiates ACH-1625 from telaprevir and other PIs under development. It was noted that telaprevir shows a mutation at amino acid 156 whereas ACH-1625 apparently shows a mutation at amino acid 168. Also, apparently ACH-1625 is the only open-chain PI whereas most of the others are macrocylic. So, there are structural differences that distinguish ACH-1625 from other PIs under development. Whether this leads to advantages or disadvantages of course needs to be played out in the clinic.

4. Regarding ACH-1095, the NS4A antagonist, ACHN finally disclosed that tox signals were seen in animal studies and this is presumably what led GILD to drop the compound. However, ACHN still intends to bring the compound into the clinic at doses below those that caused toxicity in animals. GILD and ACHN have apparently agreed in principle that ACHN will take the compound into the clinic to show PoC and GILD will have the right to join back in the development of the compound. ACHN expects to meet with the FDA in Sept. or Oct. to discuss the IND.

5. GILD and ACHN continue to work on additional NS4A antagonists beyond ACH-1095.

6. ACH-702 - Of the non-HCV assets, ACHN expects this to be the first partnered compound and also expects this compound to warrant the most lucrative deal among the non-HCV assets. They expect the initial target for this compound to be conjunctivitis.

[DewDiligence]

ACHN Reports 4Q09 Results

[The only new info here is the 12/31/09 cash balance of $9.7M. Since $22.9M net was raised in January/February (including the underwriter’s overallotment), cash on hand as of today is $32.6M less whatever has been burned during 2010 to date.]

http://finance.yahoo.com/news/Achillion-Reports-2009-Fourth-pz-2388919824.html?x=0&.v=1

›Friday March 12, 2010, 7:00 am EST

NEW HAVEN, Conn., March 12, 2010 (GLOBE NEWSWIRE) -- Achillion Pharmaceuticals, Inc. (Nasdaq:ACHN), a leader in the discovery and development of small molecule drugs to combat the most challenging infectious diseases, today reported financial results for the three and twelve months ended December 31, 2009.

For the three months ended December 31, 2009, the Company reported a net loss of $6.7 million, compared to a net loss of $8.7 million in the three months ended December 31, 2008. For the full year ended December 31, 2009, the Company's net loss was $25.9 million, compared to a net loss of $28.2 million for the year ended December 31, 2008. Cash and cash equivalents and marketable securities at December 31, 2009 were $9.7 million. The Company bolstered its cash position in January and February 2010 with $24.6 million in gross proceeds from an underwritten registered direct financing.

"Achillion made considerable progress this past year in advancing our pipeline of HCV assets, improving our strategic position in the HCV market," said Michael Kishbauch, President and CEO of Achillion. "We achieved clinical proof-of-concept with ACH-1625, demonstrating the compound's short-term safety, tolerability and an impressive viral load reduction which was sustained seven days after completion of dosing. Further, ACH-1095, a potential first-in-class NS4A antagonist, is now advancing toward an IND. Additionally, we nominated ACH-2684, a high-potency protease inhibitor from our third proprietary HCV program, as a clinical candidate. We believe Achillion is well positioned to participate in the large and important HCV market. We believe multiple compounds with distinct profiles provide Achillion with a significant advantage, as HCV is a disease in which combination therapies are anticipated to become the standard of care."

Fourth quarter results

The Company reported a net loss of $6.7 million for the three months ended December 31, 2009, compared to a net loss of $8.7 million for the three months ended December 31, 2008. Revenue for the three months ended December 31, 2009 totaled $61,000, as compared to negative revenue of $1.3 million in the three months ended December 31, 2008. In March 2009, the Company revised its estimate of the remaining performance obligations under its collaboration with Gilead Sciences to develop compounds for use in treating hepatitis C. Accordingly, Achillion adjusted its revenue to reflect the Company's revised estimate of its proportionate performance through December 31, 2008, resulting in negative revenue in the fourth quarter of 2008 and reflecting a non-cash reduction in amounts previously recognized as revenue under the collaboration.

Research and development expenses were $4.9 million in the fourth quarter of 2009, compared to $5.6 million for the same period of 2008. Research and development expenses were primarily related to costs incurred from late stage preclinical assessment and early clinical trials of the Company's HCV compounds.

For the three months ended December 31, 2009, general and administrative expenses totaled $1.9 million, compared to $1.6 million in the same period in 2008, primarily due to the addition of business development personnel.

Full-year results

For the year ended December 31, 2009, the Company reported a net loss of $25.9 million, compared to a net loss of $28.2 million in 2008. Total revenues were negative $294,000 for the year ended December 31, 2009, compared to negative $234,000 for the year ended December 31, 2008. Revenues were negative due to a change in estimate of the Company's remaining performance obligations under its collaboration agreement with Gilead Sciences.

For the year ended December 31, 2009, research and development expenses totaled $18.4 million, compared to $21.0 million in 2008. The decrease in research and development expense was primarily a result of substantial completion of clinical trials in the Company's HIV development program, offset by increased research and clinical development costs in the Company's HCV programs.

General and administrative expenses were $6.6 million for the year ended December 31, 2009, substantially unchanged from the year ended December 31, 2008.

2010 Financial Guidance

The Company expects that net cash used in operating activities in 2010 will be between $23 and $25 million based on current operating plans, anticipated timelines and the estimated cost of clinical trials and product development programs. The net loss per share is anticipated to range from $0.65 to $0.70 per share.

About Achillion

Achillion is an innovative pharmaceutical company dedicated to bringing important new treatments to patients with infectious disease. The company's proven discovery and development teams have advanced multiple product candidates with novel mechanisms of action. Achillion is focused on solutions for the most challenging problems in infectious disease -- hepatitis C, resistant bacterial infections and HIV.‹