-Patient in hepatitis C drug study had heart failure
-Bristol-Myers says cause and relation to drug being studied
aren't known
-Drug was focus of Bristol's $2.5 billion Inhibitex
acquisition
(Adds comments from Gilead beginning in 17th paragraph and
updates stock prices.)
By Peter Loftus and Saabira Chaudhuri
Bristol-Myers Squibb Co. (BMY) has suspended its study of a drug
intended to treat the liver disease hepatitis C after a patient
suffered heart failure, which the company called a "serious safety
issue."
The move raises questions about the experimental drug's
potential and the $2.5 billion price tag Bristol paid earlier this
year to buy the company that developed it. The suspension is
considered a significant setback for the drug-maker-already
grappling with weak sales of its Plavix anti-clotting drug that
lost patent protection in May-in the race to develop new hepatitis
C treatments.
Bristol-Myers shares tumbled 8.1% to $32.70 in recent trading
Thursday. ISI Group analyst Mark Schoenebaum said investors should
assume that the drug "is dead," while Bernstein analyst Tim
Anderson reduced his forecast for Bristol-Myers' 2016 per-share
earnings by nearly 10%.
The setback doesn't leave Bristol-Myers empty-handed in
hepatitis C drug research because it is developing other hepatitis
C drugs. But those other drugs might not be enough to comprise a
safe and effective all-oral regimen, which could force Bristol to
try to partner with another company developing hepatitis C
drugs.
Late Wednesday, Bristol-Myers said it voluntarily suspended an
ongoing Phase 2 study of BMS-986094, which was formerly known as
INX-189, a nucleotide polymerase inhibitor, or "nuke." In a
statement, the company said "the cause of the safety issue and any
potential relationship to study drug are unknown at this time."
A patient who had received a 200-milligram dose of the Bristol
drug experienced heart failure, said Bristol-Myers spokeswoman
Sonia Choi. The company can't rule out the possibility of safety
issues with patients who received other doses of the drug.
The drug company is currently assessing all patients in the
study and following an evaluation of the patient data, will decide
what to do. Assessments will include full physical exams and
imaging tests to measure heart health, Ms. Choi said. Any
clinically significant abnormalities detected will be reviewed by a
consulting cardiologist as soon as possible.
The safety issue could hurt Bristol-Myers in its race with
Gilead Sciences Inc. (GILD), Abbott Laboratories (ABT) and others
to bring the first all-oral hepatitis C regimen to market, hoping
to tap what is expected to be a multibillion-dollar market for such
a therapy.
An all-oral regimen for hepatitis C would eliminate an
injectable drug used in the current standard treatment, interferon,
which can be difficult for patients to tolerate.
Gilead shares surged 8.5% to $58.16 in recent trade on Bristol's
setback.
To strengthen its hepatitis C position, Bristol-Myers in
February shelled out $2.5 billion to buy Inhibitex Inc. at a
whopping 163% premium. Bristol was lured primarily by Inhibitex's
nuke for hepatitis C, though it did acquire other potential
treatments for infectious disease in the deal.
Treatments for hepatitis C are considered lucrative because the
disease is prevalent in large sections of the global population.
The virus, which can be transmitted sexually or through use of
shared needles and at tattoo parlors, affects some 170 million
people world-wide.
The "nuke" class of drugs is seen as a cornerstone of potential
all-oral regimens for hepatitis C. Gilead paid $11.1 billion to
acquire Pharmasset earlier this year to get its hands on
Pharmasset's nuke, now known as GS-7977. Gilead has begun Phase 3,
or late-stage, clinical trials of GS-7977 and hopes to submit it
for regulatory approval by mid-2013.
Some analysts believe Gilead has the lead in the race for the
all-oral regimen, which is likely to be bolstered by Bristol-Myers'
setback.
Another Bristol candidate for hepatitis C is daclatasvir, which
belongs to a class of drugs known as NS5A replication complex
inhibitors.
Earlier this year, Bristol and Gilead said a regimen that
included GS-7977 and daclatasvir had positive results in mid-stage
testing. However, Gilead has its own NS5A in development, GS-5885,
and the company doesn't appear to be interested in partnering with
Bristol to bring a combination to market.
Gilead spokeswoman Cara Miller said data from clinical studies
of GS-7977 thus far show the drug is "well tolerated and has
exhibited a favorable safety profile."
Gilead hopes to begin a late-stage clinical trial later this
year combining GS-7977 and GS-5885 in a single pill, pending
results of an earlier-stage study of the combination.
Abbott Labs is taking a different approach, developing a
potential all-oral regimen without a nuke. Abbott has said it could
bring an all-oral regimen to market in 2015. Other companies
developing new hepatitis C drugs include Vertex Pharmaceuticals
Inc. (VRTX) and Idenix Pharmaceuticals Inc. (IDIX).
Vertex shares rose 1.9% to $50.11 in afternoon trade, while
Idenix was unchanged at $8.32 on more than seven times its recent
daily volume.
Last week, Bristol-Myers reported a 28% profit decline on a
double-digit drop in sales as Plavix's second-quarter sales tumbled
60% from a year earlier. Sales also were pressured by the March
patent expiration for blood-pressure drugs Avapro and Avalide.
While Bristol-Myers has had a run of R&D victories in recent
years, it has been hit by some setbacks lately. The Food and Drug
Administration earlier this year rejected a proposed diabetes drug
and recently declined to approve a proposed anti-clotting drug,
asking for more information.
Write to Peter Loftus at peter.loftus@dowjones.com
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