Replies to post #110608 on Biotech Values

[mcbio]

The outlook for Danoprevir may have dimmed especially given Roche's cuts a little while back but please keep in mind what the title of the event was "Late-stage pipeline event"

Yes, but RG7128 is listed and RG7128 and Danoprevir are/were at fairly similar stages of development. Plus, Roche includes reference to several of their other drug candidates in Phase 2 trials.

also there are several studies active so I wouldn't go all out betting Roche partners for another PI with one of your HCV holdings just yet.

My only skin in the HCV game now is ACHN given that I sold my IDIX holdings. I'm certainly not going all out betting that Roche partners with ACHN for ACH-1625. At an absolute minimum, ACHN is going to have to show positive results in the Phase 2 28-day data due for 1625 in 1Q11. I also now think it's likely they'll have to show positive results for the 12-week data for 1625 due by end of 2H11 in order to land a deal for 1625. But, if 1625 clears those two hurdles, I think Roche could very well be interested in the drug assuming they have an interest in licensing another PI, especially one that has shown QD potential. (They could choose to go the nuke-nuke route and, if so, my bet is on them doing a deal with VRUS. Roche could also go the NS5A route, but given how much earlier stage those drugs are, I imagine Roche may want to do a deal for a PI or nuke in Phase 2.) If Roche wants a QD HCV PI, then 1625 may make sense since TMC435 is already locked up by JNJ and Roche might prefer to do a deal with a tiny company like ACHN where they would retain much greater economics in the drug as opposed to trying to partner with JNJ where the economics would be less attractive for Roche. The main advantage in the latter deal is of course that TMC435 is more advanced than 1625 and has looked pretty good to date.

If Roche continues with these studies I think the data produced and perhaps more so the competitive HCV landscape at the time will determine the future of the molecule.

I think that's the big question. Will they continue with the studies? Given the cutbacks and what we may infer from the lack of reference to Danoprevir in their guidance, I think the answer could very well be "no."

[DewDiligence]

Of the three Danoprevir trials you cited, only one (http://clinicaltrials.gov/ct2/show/NCT01220947 ) supports your contention that the drug might not be dead. One of the other two trials started in mid 2009 (and is costing Roche essentially nothing to continue) and the other trial has not actually started. Regards, Dew