Merck (MRK) recently received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for its hepatitis C virus (HCV) candidate, Victrelis (boceprevir). The CHMP recommended the approval of Victrelis for use in combination with peginterferon alfa and ribavirin for both treatment-naïve and treatment-failed adults who still have some liver function.
The positive opinion by the CHMP will be reviewed by the European Commission, which should issue a final decision in 2-3 months. The CHMP’s positive opinion was based on efficacy and safety data from two phase III studies – the HCV SPRINT-2 study and the HCV RESPOND-2 study.
The CHMP’s opinion comes on the heels of US approval of Victrelis. Victrelis, which belongs to a new class of medicines called protease inhibitors, gained approval from the US Food and Drug Administration (FDA) on May 13, 2011.
Huge Potential in HCV Market…
The HCV market could represent huge commercial potential. According to the World Health Organization (WHO), HCV infection is responsible for more than 50% of all liver cancer cases and two-thirds of all liver transplants in the developed world. The WHO estimates that about 170 million people are chronically infected with HCV worldwide and that an additional 3 million to 4 million people are infected each year.
Last week, Merck tied up with Roche Holdings Ltd. (RHHBY) to bring about an improvement in the treatment, diagnosis and awareness of chronic hepatitis C virus infection in developed and emerging markets. Under the agreement, Roche will promote Victrelis in the US as part of a triple combination therapy regimen. The companies plan to extend the agreement to other developed and emerging markets.
…But Competition not far Behind
We expect competition in the HCV market to heat up shortly with the potential FDA approval of Vertex Pharmaceutical’s (VRTX) HCV candidate Incivek (telaprevir). Incivek, which received a positive recommendation from an advisory panel of the FDA in April, is likely to gain US approval on May 23, 2011.
Neutral on Merck
We currently have a Neutral recommendation on Merck, which carries a Zacks #3 Rank (short-term “Hold” rating). Victrelis’ approval in the US is a positive for Merck, which is facing patent expiration of key drugs.
MERCK & CO INC (MRK): Free Stock Analysis Report
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