FDA lifts clinical hold on Achillion's HCV drug sovaprevir, shares jump

Achillion Pharmaceuticals' shares surged as much as 62 percent Tuesday after announcing that the FDA removed a clinical hold on its NS3/4A protease inhibitor sovaprevir and that it can resume testing the experimental drug as a potential treatment for hepatitis C viral (HCV) infection. Chief medical officer David Apelian remarked that the drugmaker is "very pleased that the effort by the Achillion team, working in collaboration with the FDA, has resulted in this response for the sovaprevir programme."

The agency had imposed the hold last July after elevations in liver enzymes were observed in healthy volunteers participating in a Phase I study of the drug's interaction with Bristol-Myers Squibb's Reyataz (atazanavir) that was boosted with AbbVie's Norvir (ritonavir), requesting additional study data and a safety analysis of all ongoing trials of sovaprevir. In September, Achillion said the FDA maintained the hold even though the company's submission had "addressed all issues" raised at the time it was placed.

Achillion noted that although the agency has now lifted the hold on trials testing a maximum once-daily dose of sovaprevir of 200 mg in patients with HCV and in single-dose trials in healthy volunteers, a partial clinical hold was maintained for multiple-dose studies in healthy participants, and that these would require prior FDA review and protocol approval. The drugmaker also indicated that it will "continue to work collaboratively with the FDA on the continued clinical development of sovaprevir." Achillion noted that so far sovaprevir was tested in about 550 subjects, with clinical activity reported in two Phase II 12-week treatment duration studies.

The company also said Tuesday that it started dosing in a Phase I trial of the uridine-analogue nucleotide polymerase inhibitor ACH-3422 for use in patients with genotype 1 chronic HCV, and that results are expected to be reported this fall. Wells Fargo analyst Brian Abrahams suggested Achillion could become a takeover target, pointing to Merck & Co.'s agreement earlier this week to purchase Idenix Pharmaceuticals for approximately $3.9 billion, which he said "illustrates the appetite for, and scarcity value of, early-stage [nucleotide polymerase inhibitors], and that a strategic premium is willing to be paid for them."

Meanwhile, JMP Securities noted that Merck's planned acquisition of Idenix leaves Achillion as the only unencumbered, clinical-stage HCV nucleotide-analogue company. "With several potential acquirers in the wings, including Bristol-Myers Squibb, AbbVie and Johnson & Johnson, we foresee forthcoming data as a potential catalyst for a transaction," the analysts said, adding that Achillion could attract a bid of $13 per share, or approximately $1.26 billion. However, Bloomberg Industries analyst Asthika Goonewardene cautioned "the risk is definitely to consider," given that "[nucleotide polymerase inhibitors] have a history of bad safety."

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