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Web Date: June 9, 2014

Merck Will Acquire Biotech Firm Idenix

Pharmaceuticals: Deal for close to $4 billion brings key addition to its hepatitis C virus portfolio
Department: Business
Keywords: pharmaceuticals, biotech, M&A, HCV, hepatitis C

Hoping to steal a chunk of the hepatitis C virus drug market from Gilead Sciences, Merck & Co. is shelling out $3.85 billion for Idenix Pharmaceuticals, a Cambridge, Mass.-based biotech firm developing small-molecule HCV drugs. With the deal, Merck gains IDX21437, a nucleotide polymerase inhibitor now in Phase I/II trials that could become the cornerstone of a more convenient treatment for the virus.

Drugs to treat HCV, a serious liver infection that affects about 3.2 million Americans and 150 million people worldwide, are expected to bring in more than $20 billion in annual sales by 2018, according to the market research firm Evaluate Pharma. Much of the market’s recent growth has come from Gilead’s nucleotide polymerase inhibitor Sovaldi, a pill launched in December 2013, that is a major advance in treating HCV infection.

Previously, HCV patients faced a lengthy treatment regime that combined a protease inhibitor with ribavirin and the injected drug interferon. Sovaldi cut out the need for interferon and shortened the treatment time. Sales of Sovaldi are projected to reach $10 billion this year, which would make it the fastest new drug launch in history.

Now, Gilead is asking FDA to approve a fixed-dose combination of Sovaldi and the NS5A inhibitor ledipasvir that would eliminate the need for ribavirin. The pill would treat people with genotype 1 HCV, the most common strain of the virus in the U.S.

According to information sent to investors, Merck’s goal is to come up with a once-daily, fast-acting, ribavirin-free drug combo that can treat HCV patients regardless of genotype. But to make that happen, Merck needed a nucleotide polymerase inhibitor to pair with its NS5A inhibitor MK-8742 and its NS3/4A protease inhibitor MK-5172, both in development.

Although Merck believes IDX21437 is its solution, many have stumbled in the race to produce a safe and effective nucleotide polymerase inhibitor. INX-189, the centerpiece of Bristol-Myers Squibb’s 2012 acquisition of Inhibitex for $2.5 billion, was pulled from development after a patient died in a Phase II study. Pharmasset and Idenix also ended nucleotide programs due to safety concerns.

Given the scarcity of safe and potent nucleotide polymerase inhibitors, Achillion Pharmaceuticals, the last biotech with a fully owned molecule in that class could be next on big pharma’s shopping list, according to Howard Liang, a stock analyst with the investment firm Leerink Partners.

Chemical & Engineering News
ISSN 0009-2347
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