AbbVie Inc. (ABBV) has filed a new drug application with the Japanese Ministry of Health, Labour and Welfare for its experimental hepatitis C virus (HCV) treatment. AbbVie’s all-oral, ribavirin and interferon free, 12-week, two direct-acting antiviral treatment comprises a fixed-dose of paritaprevir/ritonavir (150/100 mg) in combination with ombitasvir (25 mg), dosed once daily. The company is looking to get the combination approved for the treatment of patients with genotype 1 (GT1) chronic HCV infection.
The NDA submission comes close on the heels of AbbVie’s three-drug HCV regimen, Viekira Pak and Viekirax + Exviera, gaining approval both in the U.S. (Dec 2014) and EU (Jan 2015).
We believe that AbbVie’s two-drug direct-acting HCV regimen has a good chance of gaining approval based on high rates of response and low discontinuation rates.
While Viekira recorded sales of $48 million in the fourth quarter of 2014, AbbVie estimates Viekira to achieve global annualized sales of more than $3 billion by the end of 2015.
We remind investors that pharmacy benefit manager (PBM), Express Scripts (ESRX), has added Viekira to its formulary and offered it as an exclusive option for GT 1 HCV patients, starting Jan 1, 2015. Express Scripts’ decision to choose lower-priced Viekira over other expensive HCV drugs like Gilead’s (GILD) Sovaldi and Harvoni has triggered intense pricing competition in the HCV market with both AbbVie and Gilead striking deals with PBMs.
Meanwhile, the race to bring shorter duration HCV drugs is heating up with Achillion Pharmaceuticals (ACHN) announcing positive interim data on its experimental HCV treatment, ACH-3102, being evaluated in combination with Gilead’s Sovaldi. Results showed that all patients including those with a high baseline viral load in the six-week treatment duration arm achieved 100% sustained viral response at 12 weeks.
We expect the HCV market and pricing competition to remain in focus in 2015.
AbbVie currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Achillion carrying a Zacks #2 (Buy).
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