Merck’s Idenix Purchase a Bid to Dethrone Hep C King Gilead

Jun 13, 2014

GlobalData Analyst

Merck’s recent agreement to acquire Idenix Pharmaceuticals for $3.8 billion, reveals a firm commitment to compete with the likes of Gilead, AbbVie and Bristol-Myers Squibb, as well as strengthen its recently reinvigorated hepatitis C virus (HCV) pipeline, say GlobalData analysts. The two firms expect to complete the transaction by late 2014, just as Gilead and AbbVie roll out the first interferon-free regimens for HCV genotype 1 patients.

According to infectious disease analyst Christopher J. Pace, “Merck is clearly expecting to bolster its robust HCV pipeline with Idenix’s Phase I and II nucleotide analogues.” This, Pace says, will enable the company to potentially claim a larger stake in a growing market, which GlobalData projects to surpass $14.5 billion in sales by 2016 across the seven major markets (the US, France, Germany, Italy, Spain, the UK and Japan).

“Even prior to pursuing Idenix, Merck possessed a strong HCV pipeline, highlighted by MK-5172, which is an investigational NS3/4A protease inhibitor, and MK-8742, an investigational NS5A inhibitor,” explains Pace. The acquisition now adds two NS5B nucleotide polymerase inhibitors, IDX21437 and IDX21459, to Merck’s arsenal, further enhancing the company’s already potent pipeline in an increasingly competitive market landscape.”

The latter two agents possess the same mechanism of action as Gilead’s blockbuster drug, Sovaldi (sofosbuvir). GlobalData anticipates that Merck will seek to combine MK-5172 and/or MK-8742 with one of its newly procured pipeline assets to formulate a fixed-dose combination therapy that can compete directly with Sovaldi/ledipasvir for market share. “Overall, despite increased competition from Merck and other firms, GlobalData expects Gilead to remain a key player in the future HCV treatment algorithm. Other participants will need to act quickly and smartly if they wish to oust the current undisputed HCV market leader,” concludes Pace.

Pace also believes that this acquisition could encourage other Big Pharma HCV players to aggressively explore partnerships with smaller companies, such as Achillion Pharmaceuticals (ACH-3422) and Presidio Pharmaceuticals (PPI-383), which are developing NS5B nucleotide polymerase inhibitors. However, he adds that these firms will need to move fast, as Gilead’s Phase II HCV pipeline already features a pan-genotypic NS5A inhibitor co-formulated with Sovaldi (Sovaldi/GS-5816).