nature biotechnology volume 27 number 4 april 2009 305

Competition intensifies around hepatitis C

Competition for a slice of the hepatitis C mar-ket continues to heat up, with positive news on the clinical front for a second-generation interferon (IFN)-α and a spate of lucrative deals for antivirals with novel mechanisms of action. In January, Bristol-Myers Squibb (BMS) struck a megadeal with ZymoGenetics to provide the biotech firm with $1.1 billion to develop the latter’s polyethylene glycol (PEG)-modified IFN-λ currently in phase 1 trials. In March, Vertex Pharmaceuticals of Cambridge, Massachusetts, consolidated its existing hep-atitis C pipeline, buying two small-molecule drugs from Laval, Canada–based ViroChem Pharma for $375 million. The same month, Rockville, Maryland–headquartered Human Genome Sciences announced positive phase 3 data for Albuferon—a fusion protein of IFN-α2b and albumin. Overall, competition in the field remains fierce, as whoever manages to offer patients a treatment more efficacious than standard therapies could potentially achieve blockbuster sales. Improved IFN prod-ucts are likely to arrive first, but in the long term, market watchers are touting cocktail treatments as the most promising.

The generous terms of the deal between BMS and ZymoGenetics, located in Seattle, Washington, indicate just how much hepa-titis C virus (HCV) treatments with novel mechanisms could be worth. New York–based BMS will pay $85 million in up-front cash and $20 million in license fees to develop ZymoGenetics’ PEG-IFN-λ, a type III IFN otherwise known as interleukin (IL)-29. The Seattle-based biotech also stands to gain another $1 billion in milestone payments if all goes according to plan. “The deal illustrates the ambition of BMS to be a player in the hepatitis C arena,” says Holger Rovini, lead analyst at Datamonitor. “With only three small-molecule antivirals in early-stage development, BMS has not been active so far [in this area], and this will bolster its position.”

Of the drugs currently in clinical practice, the market leader is Pegasys, a recombinant PEG-IFN-α2a commercialized by Roche of Basel, Switzerland that earns well over $1 billion a year in worldwide sales. Close behind Pegasys is Peg-Intron, a recombinant PEG-IFN-α2b developed by Kenilworth, New Jersey–based Schering Plough, which announced last month that it was merging with Merck of Whitehouse Station, New Jersey (and which is also cur-rently testing a macrocyclic small-molecule inhibitor of HCV nonstructural protein 3/4a (NS3/4a) in phase 2). Both PEGylated type I IFNs have longer serum half-lives than their unmodified predecessor molecules.

Chronic hepatitis C is the most common blood-borne infection in the US and is four times more common than HIV. HCV is trans-mitted via blood and body fluids and attacks the liver; genotype 1 of the virus accounts for the majority (70–75%) of infections. An esti-mated 170 million people worldwide—3% of the global population—are infected, and up to 4 million acquire the infection each year. The hepatitis C market was worth $2.3 billion in 2007 and is expected to grow to $4.5 billion by 2017, according to Datamonitor’s projections.

To eliminate detectable virus from the blood, current standard of care for hepatitis C patients is a combination of PEG-IFN-α and ribavirin, a nucleoside analog with anti-viral activity. IFN-α is secreted naturally by cells in response to viral double-stranded RNA and helps boost the host’s immune response. Ribavirin used alone has no effect on HCV, but it synergizes the immune-boosting effects of PEGylated IFN, though the mechanism is not fully understood.

These combination treatments are protracted, however, and typically involve 48

Hepatitis C virus infections are likely to be treated with cocktails of improved interferon products and novel small-molecule antivirals.

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in briefIndian biotechs partner with governmentThe Indian government has selected the first batch of biotech companies to join a cost-and-risk sharing scheme. The government-backed Biotechnology Industry Partnership Programme (BIPP), conceived to promote innovation and support “high risk, cutting edge” research within the biotech industry, will provide as much as half the cost of approved projects. Nine biotech firms are in line to receive the first $20 million out of a total $72 million earmarked for the program by the government’s Department of Biotechnology (DBT). “BIPP is the biggest public-private partnership program in the country for discovery research,” says Maharaj Kishan Bhan, secretary for DBT. “It will push company [people] to forge collaborations with public sector institutions and also expand their own in-house R&D work force.” The first awards have been allocated to projects on vaccines, biopharmaceuticals and in the areas of agriculture, bio-energy and clinical trials. The projects were selected from 92 proposals that DBT received from 65 companies in response to its call in December 2008. The next call will go out by May 2009. V.N. Balaji, a director of Bangalore-based Jubilant Biosys, is upbeat about the public-private initiative. “If properly implemented, it should give a boost to industry,” he says. DBT will spend one-third of its annual budgets on the partnership program. Industry is being squeezed right now and “it is our duty to go and fund their R&D,” says Bhan. K S Jayaraman

Malaysia seeks biotech partnersThe Malaysian biotech sector is set to benefit from RM13.7 ($3) billion government funding into healthcare, and a recently announced stimulus package worth RM60 ($16) billion, which also includes biotech. This cash injection will help Malaysia strengthen biotech links with India, in particular, and China, countries which the government views as a strategic platform to Western markets. “We need to go regional before going global and get good companies coming in,” says Selvam Ramaraj, vice president of healthcare, BiotechCorp, the federal agency charged with developing biotech through policy and funding. In 2005, the Malaysian government identified biotech as a key driver for growth and has made it a priority since then. Foreign or local companies with strong R&D proposals can acquire so-called BioNexus status, which grants ten tax-free years from the first year of generating a profit. So far, there are 97 BioNexus companies, mostly startups, including 38 healthcare, 33 agricultural and 23 industrial biotechs as well as three bioinformatics companies. Aurigene, a Bangalore, India–based small-molecule and peptide drug discovery [service] company; Olipro Biotechnology, Kuala Lumpur, a microarray diagnostics firm; and the regenerative medicine company Stempeutics, Bangalore, are among them. “Although biotech is a young industry here, we are expecting positive growth,” says Ramaraj. Susan Aldridge

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306 volume 27 number 4 april 2009 nature biotechnology

biotech ViroChem. The company recently bought three clinical-stage non-nucleoside inhibitors of HCV nonstructural protein 5B (NS5B)—VCH-759 and VCH-916 , in phase 2a trials, and VCH-222 in phase 1—despite having its own closely watched HCV NS3 pro-tease inhibitor, telaprevir. Vertex’s telaprevir, co-developed with Tibotec Pharmaceuticals of Cork, Ireland, is currently working towards an FDA filing.

Close behind telaprevir is Schering-Plough’s (now Merck’s) boceprevir, also an HCV-NS3 protease inhibitor. These two oral protease inhibitors remain in phase 3 clinical trials. So far they have shown superior efficacy when used in combination with PEGylated IFN-α and ribavirin. “Both drugs look efficacious in genotype 1 patients—the biggest market and the biggest unmet need,” says Rovini. Phase 3 results for both drugs are expected in 2010. Fierce competition is expected between the two candidates, but analysts from Datamonitor and Oppenheimer Equity Research opine that the prospects for Vertex’s telaprevir look brighter: its commercial advantages include shorter therapy duration, data in null respond-ers and fewer associations with severe anemia than boceprevir.

Eventually, cocktails of protease inhibi-tors and polymerase inhibitors may do away with the need to dose IFN-α altogether, says Rovini. But at least to start with, both strategies will be used in conjunction. Until then, anything—whether small molecule or novel IFN—that boosts efficacy over current treatments will prove a winner. BMS’s Mauer explains that the company entered the col-laboration with ZymoGenetics to develop PEG-IFN-λ to complement its internal hepa-titis C antiviral development program—BMS has its own small-molecule NS5A inhibitor (BMS790052) in phase 2 trials (see Table 1). “Both small-molecule antivirals and differ-entiated IFNs have the potential to provide alternatives to patients with hepatitis C,” she points out.

emma dorey Brighton, UK

the biological activity of type I IFNs, while the albumin improves the drug’s pharmacokinetic profile. In March, results from a second phase 3 trial confirmed that this agent, in combina-tion with ribavirin, is as effective as Pegasys in treating people with genotype 1 chronic hepatitis patients, though toxicity issues have caused some concern.

“Since there is little advantage reported so far in efficacy, a key factor here is improved convenience, with an injection every two

weeks,” says Nezam Afdhal, chief of hepa-tology at Beth Israel Hospital in Boston and associate professor at Harvard School of Medicine. Another second-generation IFN-α2b, Locteron (a controlled-release form of the cytokine), under development by Biolex Therapeutics of Pittsboro, North Carolina, is in phase 2 trials and also requires less frequent dosing and has fewer side effects than standard treatments.

But many clinicians are underwhelmed by Albuferon, Locteron and other improved versions of IFN with different serum half-lives. As Mansi Shah of Datamonitor points out for Albuferon, the treatment is unlikely to shake up the market because it does not offer improved efficacy in genotype 1 patients beyond that offered by Pegasys. Vito Racanelli of the University of Bari Medical School in Italy, whose research focus is HCV, concurs: “We must trust in HCV life cycle inhibitors.”

Many believe small-molecule therapies for hepatitis C will work best as combinations—much like HIV cocktails. This may have inspired Vertex’s latest deal with Canadian

weekly injections. Many patients suffer adverse effects, such as anemia, depression and flu-like symptoms, resulting in compliance difficulties. What’s more, treatment is successful in only 40–50% of people with genotype 1. This leaves a large portion of the patient population with no effective treatment.

Although testing HCV drugs involves a lengthy commitment—48 weeks of treat-ment with a subsequent 24 weeks of follow up —the large patient population and significant unmet need continue to attract substantial interest from companies. At least 23 product candidates are currently in phase 2 or 3 clini-cal trials, including novel IFN products and small-molecule inhibitors of the nonstructural protein 3 (NS3) protease, one of which is a lead candidate for Vertex (see Table 1). Several early programs targeting NS5B, the HCV RNA polymerase, failed in early clinical studies, but Gilead Sciences, of Foster City, California, is still pursuing a small-molecule inhibitor of this enzyme.

It is hoped that novel IFN products will have improved pharmacokinetics and reduced side effects compared with type I IFNs currently in clinical practice. ZymoGenetics’ PEG-IFN-λ mediates antiviral activity through IL-28Ra, a different receptor from that used by IFN-α, explains Jennifer Fron Mauer, a spokesper-son for BMS. The latter type I IFN mediates its action through IFNAR1 and IFNAR2c—receptor subunits that are expressed ubiqui-tously throughout the body. In contrast, recent work suggests that the IL-28Ra receptors for IFN-λ are expressed only on keratinocytes, colon cells and other epithelial cells (PLoS Pathogen 14, e1000017, 2008). Because IL-28Ra is present on fewer cell types in the body than type I IFN receptors, PEG-IFN-λ may mediate more targeted therapy with fewer side effects than current treatments using IFN-α.

The IFN currently most advanced in clini-cal development is Albuferon, developed by Human Genome Sciences of Rockville, Maryland, and Novartis of Basel, Switzerland. This IFN-α–albumin fusion protein retains

Table 1 Selected HCV candidates with novel mechanisms of action under development at biotech companiesMolecule Company Target/mechanism Clinical stage

Albuferon Human Genome Sciences IFN-α2b–albumin fusion Phase 3

Telaprevir Vertex Pharmaceuticals Small-molecule NS3 protease inhibitor Phase 3

GS9190

GS9450

Gilead Sciences Non-nucleoside NS5B polymerase inhibitor

Small-molecule pan-caspase inhibitor

Phase 2b

Phase 2a

Viramidine Valeant Pharmaceuticals Nucleoside (guanosine) analog prodrug of ribavirin Phase 2b

IPH1101 Innate Pharma Bromohydrin pyrophosphate, a structural analog of bacterial phosphoantigens that agonize Tγ9δ2 lymphocytes

Phase 2

Locteron Biolex Therapeutics Controlled release form of IFN-α2b in a biodegradable hydrogel of hydroxymethyl methacrylate–derivatized dextran

Phase 2

Source: Iddb.com; Sagient Research.

“Eventually cocktails of protease inhibitors and polymerase inhibitors may do away with the need to dose IFN-α altogether,” says Rovini.

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