Replies to post #112791 on Biotech Values

[oc631]

What do you make of the BMY deal with VRUS regarding PSI-7977?

After the viral breakthrough experienced when partnering their NS5A inhibitor with a PI what other option did they have? VRUS has the upper hand and it's an extremely positive development because the majors will now bid up VRUS' IP.

Do you think there are provisions in the arrangement that lock Roche out of becoming a potential partner on the drug?

No, I think VRUS has enough leverage to deal with all interested parties separately. The terms of the collaboration agreement isn't public record so I could be wrong.

Is Roche effectively down to PSI-938 if they want a leading 2nd gen HCV nuke?

No but 938 wouldn't be a bad choice.

[oc631]

Yes, you may be right, although giving up on INFORM doesn't necessarily signal that RG7128 is at fault (I certainly think Danoprevir would be the culprit). But, there still could of course be a negative reaction towards VRUS I suppose, as unfair as I think that would be.

If Roche drops INFORM because of Danoprevir the fate of RG7128 is thrown into question. Does Roche push on into phase 3 with RG7128 plus SOC? Or partner RG7128 with another DAA? Both programs would be very expensive and, as you pointed out, unable to compete with PSI-7977 on any metric.

VRUS potentially could receive an additional 100M in milestone payments plus royalties from Roche under the terms of the agreement RG7128 falls under. The loss of this future revenue could cause the stock to drop and present a buying opportunity. (Selling this news IMO would be misguided but I'm only speculating that it could happen.) Until we see Roche initiate INFORM-SVR and/or the phase 2 GT2/3 study I'm back in Dew's camp thinking this program is dead.

The most likely scenario is Roche will play "Weekend at Bernies" with this program until they make their move on another nuke. Perhaps they may drag it on even longer. Roche is required to return all IP to Pharmasset for PSI-6130 and it's pro-drugs (PSI-7128) if they halt development. I expect Roche to follow through with SVR data in the Fall yet I'll wait for a new trial to begin to confirm proof of life with this program.