Merck (MRK) recently announced that its hepatitis C virus (HCV) drug, Victrelis (boceprevir), gained approval in the EU.
The European Commission (EC) approved Victrelis for the treatment of chronic hepatitis C (CHC) genotype 1 infection, in combination with peginterferon alfa and ribavirin in treatment-naïve and treatment-failed adults with compensated liver disease.
Positive Recommendation from CHMP in May
EU approval was based on efficacy and safety data from two phase III studies – the HCV SPRINT-2 study and the HCV RESPOND-2 study. The EU approval of Victrelis was expected – in May 2011, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) had issued a positive recommendation for the candidate.
Meanwhile, 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 represents huge commercial potential. About 4 million people suffer from HCV infection in Europe.
Merck has partnered 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 Tough Competition in HCV Market
We expect competition in the HCV market to be strong with Vertex Pharmaceutical’s (VRTX) HCV drug Incivek (telaprevir) gaining FDA approval shortly after Victrelis. Incivek is currently under review in the EU, where approval could come by year end.
Neutral on Merck
We currently have a Neutral recommendation on Merck, which carries a Zacks #3 Rank (short-term “Hold” rating). Victrelis’ approval is a positive for Merck, which is facing patent expiration of key drugs.
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