(By Mani) Bristol-Myers Squibb Co.'s
) suspension of hepatitis C virus (HCV) study is positive for Gilead Sciences, Inc.
) and Vertex Pharmaceuticals, Inc.
). The situation even opens up a takeover scenario, with Idenix Pharmaceuticals Inc. (NASDAQ:IDIX) being rumored as the potential target.
The study of BMS-986094, a nucleotide polymerase inhibitor obtained through the company's $2.5 billion acquisition of Inhibitex, was suspended over the emergence of a "serious safety issue."
"Although BMY can develop all-oral regimens with other in-house DAAs and with collaborators such as JNJ, we view the suspension of BMS-986094 as a meaningful setback, given the scarcity and unique characteristics (pan-genotypic activity/high barrier to resistance) of nucs," Oppenheimer analyst David Ferreiro said in a client note.
As Bristol-Myers is a major competitor in the HCV space, the suspension is positive for Gilead Sciences and Vertex Pharma, which are each developing all-oral regimens containing nucs.
Gilead's competitive lead in developing all-oral regimens continues to lengthen. Recently, Vertex announced a more cautious slower HCV strategy and opted to evaluate several all-oral regimens in phase II prior to phaseIII testing, giving Gilead Sciences a potential 12 month lead in G1.
"We expect BMS-986094 suspension and likely revaluation of what all-oral regimen to move to ph.III will also slow development for BMY. Additionally, BMS-986094+daclatasvir could have been a formidable competitor to GILD's own nuc+NS5a combo, GS-7977+GS-5885," Ferreiro noted.
Meanwhile, Bristol-Myers' setback is a potential catalyst for an Idenix deal. If BMS-986094 is discontinued, the company may again seek a nuc such as Idenix's IDX-184, which has produced decent phase II results. Idenix Pharma has the only partner-able nuc, IDX-184, in midstage development.
"We expect IDIX to potentially rally as BMY may now be perceived as a more likely suitor for IDIX," the analyst added.
However, given the limited details around the suspension, it is too early to infer if the likelihood of an IDX-184 partnership is higher or even a deal, but this scenario cannot be ruled out.
Moreover, Bristol-Myers is currently shifting its virology R&D/marketing expertise to HCV from the HIV franchise, which faces patent headwinds.
Cambridge, Massachusetts-based Idenix's current focus is on the treatment of hepatitis C virus (HCV) infections due to the global unmet medical need for this viral disease. It is estimated that more than 170 million people worldwide are chronically infected with HCV, which affects people's liver when they are contacted with contaminated blood that carries the virus.
HCV companies have started to take priority among the biotech investors portfolio due to their potential market and issues with the current treatments. If any company develops a treatment that kills the virus, or even keep it from developing further, would be a big thing and would fetch enormous profits for the company as well as its investors.