AbbVie’s (ABBV) hepatitis C virus (HCV) treatment, Viekira Pak, gained FDA approval for the treatment of patients with chronic HCV genotype 1 infection, including those with cirrhosis, a type of advanced liver disease. The treatment can be used with or without ribavirin but is not recommended for use in patients whose liver is unable to function properly (decompensated cirrhosis).
The all-oral, interferon-free treatment comprises three new drugs (ombitasvir, paritaprevir and dasabuvir) representing three distinct mechanisms of action (NS5A inhibitor, NS3/4A protease inhibitor and a non-nucleoside NS5B polymerase inhibitor) that work together to inhibit the growth of HCV. Ritonavir, a previously approved drug (trade name: Norvir), is used to increase blood levels of paritaprevir.
Viekira Pak’s approval is a major positive for AbbVie. AbbVie had said on its third quarter call that it expects to launch the product by year end and has the appropriate infrastructure in place to support the launch. Meanwhile, EU approval could come in the first quarter of 2015 – the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) had issued a positive opinion last month.
We expect investor focus to remain on AbbVie’s launch of Viekira Pak and its sales ramp up in the HCV market. The big question is whether Viekira Pak will be able to gain share in a market primarily dominated by Gilead (GILD), which has two HCV treatments – Sovaldi and Harvoni. Another player in the HCV market is Johnson & Johnson’s (JNJ) Olysio. While high rates of response and tolerability coupled with low discontinuation rates should help Viekira Pak gain share, pricing will play an equally important role considering the concerns regarding Gilead’s pricing of its HCV treatment.
AbbVie is a Zacks Rank #2 (Buy) stock. A better-ranked stock in the biotech sector is Amgen (AMGN), a Zacks Rank #1 (Strong Buy) company.
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