Last week, Merck & Co., Inc. (NYSE:MRK), a large cap pharma (market value at $163.48 billion, with cash flows of $7.32 billion in 2014), reported data from several studies of investigational hepatitis C virus (HCV) once-daily regimens of direct-acting antivirals ((DAAs)) grazoprevir (GZR, a NS3/4A protease inhibitor) and elbasvir (EBR, a NS5A replication complex inhibitor). Merck is trying to gain a foothold into the HCV market which Gilead Sciences, Inc. (NASDAQ:GILD) dominates with Sovaldi ($10.3 billion in 2014; $1.73 billion in Q4 2014) and Harvoni (launched in Q4 with $2.11 billion in worldwide sales, mostly U.S.). In U.S. practice, Gilead's agents are among the treatments of choice for every HCV genotype (GT, see Appendix), though officially Sovaldi is approved for patients with GT1-4, while Harvoni is only for patients with GT1. The trials covered HCV GT1, 3, 4 or 6, representing more than 80% of HCV patients (see Table 1). These data were presented at The International Liver Congress 2015 - the 50th annual congress of the European Association for the Study of the Liver, which ended on Sunday. Some of the results are promising enough for Merck to advance and ultimately compete with Gilead's products.

Table 1. Hepatitis C Virus Prevalence in the United States

The HCV market is extremely competitive (see Table 2). Abbvie (NYSE:ABBV), Enanta Pharmaceuticals (NASDAQ:ENTA) and Bristol-Myers Squibb (NYSE:BMY) also have commercially available products. Achillion Pharmaceuticals (NASDAQ:ACHN) and Bristol-Myers Squibb are also working on shorter-duration treatments. Shorter treatments mean the trials will only take a few months, not years. The high prevalence of HCV also makes for rapid enrollment completion. Thus, companies like Merck can quickly submit potential better treatments before regulators.

Table 2. HCV Combinations (Marketed Products Are in BOLD).

The first available data was from C-SURFER, a Phase 2/3 parallel-group, randomized, placebo-controlled trial (RCT) of 12 weeks of treatment with GZR/EBR in 122 GT1-infected patients with chronic kidney disease (CKD) stages 4 or 5, regardless of prior treatment experience or cirrhosis. GZR/EBR was effective based on a sustained virologic response 12 weeks after the completion of treatment (SVR12) in 99.1% (115/116) of evaluable patients. Six patients had missing data because of death or early discontinuation for reasons unrelated to the study drugs; if they are counted as failures, SVR12 is 94.3%. More deaths (3 vs. 1) and discontinuations of treatment due to adverse events (AEs, 4 vs. 0) occurred with the placebo group. GZR/EBR has a great chance of approval here, as C-SURFER is the first RCT with an all-oral ribavirin (RBV)-free treatment regimen in CKD patients. One of the two Breakthrough Therapy designations GZR/EBR has received from the U.S. Food and Drug Administration (FDA) is for the treatment of GT1 infection in patients with end stage renal disease (ESRD) on hemodialysis (CKD Stage 5), which may expedite the review of the combo for this indication.

The next body of evidence was courtesy of Merck's ongoing C-EDGE pivotal Phase 3 program evaluating GZR/EBR in patients with or without cirrhosis who are infected with GT1, 4 or 6. Data was available from 3 of the 5 C-EDGE trials, and overall SVR12 rates were in the 90s (see Table 3). However, that number is skewed by the preponderance of the most common and most easily-treated GT1, as well as non-cirrhotic patients.

C-EDGE TN was a blinded RCT in which 22% of the treatment-naïve patients had liver cirrhosis. C-EDGE TE was an RCT in patients with prior null response, partial response or relapse with pegylated interferon (NYSE:PEG)/RBV. Of the 209 patients randomized to the 12 weeks treatment, 35% of patients in the GZR/EBR only arm had cirrhosis, while 34% had cirrhosis among the patients receiving GZR/EBR plus RBV. Of the 211 patients in the 16 week arms, the GZR/EBR only arm had 36% with cirrhosis, while the GZR/EBR plus RBV arm had 35% cirrhotic patients. C-EDGE CO-INFXN was an open label, single-arm study in which 16% of HIV/HCV co-infected, treatment-naïve patients had cirrhosis.

Relapse rates and AEs become more important in the large Phase 3 trials. In C-EDGE TN, virologic failure occurred in 4.1% of treated patients (13/316), while serious AEs occurred in 3% of patients in both treatment and placebo arms; none were considered drug-related. In C-EDGE CO-INFXN, virologic failure occurred in seven patients 3.2% (7/218), but there were no reported drug-related serious AEs. In the C-EDGE TE 12 week groups, 6% in each had virologic relapse, and more serious AEs were reported in the GZR/EBR only arm than in the RBV-containing arm (4% vs. 3%). In the 16 week arms, virologic failures were only recorded among the patients receiving GZR/EBR only (7% vs. 0), although there were also fewer incidences of serious AEs (4% vs. 3%).

Table 3. Rates of Sustained Virologic Response 12 Weeks after Treatment (SVR12) in C-EDGE Pivotal Trials.

In C-EDGE TN and TE, SVR12 for GZR/EBR alone was comparable with Harvoni for GT1 patients (see Table 4); GZR/EBR also has the slight edge in relapse rate. However, with the trend of research going towards shorter-duration regimens, it's probably not worth it for Merck to pursue approval in this indication directly. The better goals for GZR/EBR even with RBV are GT4 and 6, where Harvoni is still used in but not approved for. The race is on for GT4, as Gilead also scored good results for Harvoni from a French trial (see Table 5). Merck remains on track to submit a New Drug Application (NDA) with the FDA in the first half of 2015, and the second of GZR/EBR's two Breakthrough Therapy designations is in HCV GT4. However, Gilead only needs a supplemental NDA to make Harvoni official for GT4. C-EDGE CO-INFXN suggests that GZR/EBR will perform better than Sovaldi plus RBV (see Table 6) in GT1 patients.

Table 4. Rates of SVR12 in Harvoni's Pivotal Trials.

Table 5. Rates of SVR12 in Harvoni Phase 2 Trial (Study 1119).

Table 6. Rates of SVR12 in Sovaldi's Pivotal Trials.

There was also good news for patients with GT1 infection who have previously failed treatment with PEG and RBV combined with a DAA (Merck's Victrelis, Janssen's Olysio or Vertex's discontinued Incivek). GZR/EBR plus RBV showed high rates of SVR12 in C-SALVAGE, a Phase 2 open label trial (see Table 7). Virologic failure was reported for 3.8% (3/79) of patients in the trial, which was better than the 6.5% relapse rate of Harvoni in ION-2. If GZR/EBR is approved, it could come down to a preference of 12 weeks of taking RBV or 24 weeks of Harvoni, which would likely favor Merck.

Table 7. Rates of SVR12 in C-SALVAGE Phase 2 Trial.

The last batch of results came from the C-SWIFT, a proof-of-concept Phase 2 open label trial n treatment-naïve patients with GT1 or GT3 for potentially shortening HCV treatment durations below 12 weeks. The final C-SWIFT data indicates that GZR/EBR in combination with Sovaldi is worse than Gilead's triple DAA (see Table 8) in GT1 patients.

Table 8. Rates of SVR12 in C-SWIFT Phase 2 Trial.

Table 8. Results of Sovaldi + GS-5816 + GS-9857 Phase 2 Trial.

In short, Merck has many shots on goal with HCV. Specifically, Merck's best bet is the 10% of U.S. dialysis patients who get infected with HCV. The latest available incidence of ESRD in the U.S. was 112,775 in 2012, which could almost make GZR/EBR a blockbuster just in this indication. Being able to compete on some level in GT1 and 3 would bring many millions due to the sheer size of the HCV market. The important thing is to get FDA approval, which, given the new available data, should be likely sometime in early 2016.

Appendix

Summary of Recommendations for Patients Who are Initiating Therapy for HCV Infection or Who Experienced Relapse after Prior PEG/RBV Therapy, by HCV Genotype

HCV Genotype 1a: Three options with similar efficacy in general are recommended.

1. Harvoni for 12 weeks*.
2. Viekira Pak plus twice-daily dosed dasabuvir (250 mg) and weight-based RBV for 12 weeks (no cirrhosis) or 24 weeks (cirrhosis).
3. Sovaldi (400 mg) plus Olysio (150 mg) daily with or without weight-based RBV for 12 weeks (no cirrhosis) or 24 weeks (cirrhosis).

HCV Genotype 1b: Three options with similar efficacy in general are recommended.

1. Harvoni for 12 weeks*.
2. Viekira Pak plus twice-daily dosed dasabuvir (250 mg) for 12 weeks. The addition of weight-based RBV is recommended in patients with cirrhosis.
3. Sovaldi (400 mg) plus Olysio (150 mg) daily for 12 weeks (no cirrhosis) or 24 weeks (cirrhosis).

HCV Genotype 2: Recommended regimen.

1. Sovaldi (400 mg) daily and weight-based RBV for 12 weeks. Extending treatment to 16 weeks is recommended in patients with cirrhosis.

Alternative regimens.

None.

HCV Genotype 3: Recommended regimen.

1. Sovaldi (400 mg) daily and weight-based RBV for 24 weeks.

Alternative regimens.

1. Sovaldi (400 mg) daily and weight-based RBV plus weekly PEG-IFN for 12 weeks for IFN-eligible, treatment-naive patients with HCV Genotype 3 infection.

HCV Genotype 4: Three options with similar efficacy in general are recommended.

1. Viekira Pak and weight-based RBV for 12 weeks.
2. Sovaldi (400 mg) daily and weight-based RBV for 24 weeks.
3. Harvoni for 12 weeks.

Alternative regimens.

1. Sovaldi (400 mg) daily and weight-based RBV plus weekly PEG-IFN for 12 weeks.
2. Sovaldi (400 mg) plus Olysio (150 mg) daily with or without weight-based RBV for 12 weeks.

HCV Genotype 5: Recommended regimen.

1. Sovaldi (400 mg) daily and weight-based RBV plus weekly PEG-IFN for 12 weeks.

Alternative regimen.

1. Weekly PEG-IFN plus weight-based RBV for 48 weeks for IFN-eligible, treatment-naive patients with HCV Genotype 5 infection.

HCV Genotype 6: Recommended regimen.

1. Harvoni for 12 weeks.

Alternative regimen.

1. Sovaldi (400 mg) daily and weight-based RBV plus weekly PEG-IFN for 12 weeks for IFN-eligible, treatment-naive patients with HCV Genotype 6 infection.

* Relapse rates were higher (4.6%, 20/431) in the 8-week arms compared with 12-week arm (1.4%, 3/216). Post hoc analyses identified lower relapse rates in patients receiving 8 weeks of Harvoni who had baseline HCV RNA levels below 6 million IU/mL (1.6%; 2/123), and was the same for patients with similar baseline HCV RNA levels who received 12 weeks (1.5%; 2/131). This analysis was not controlled and thus substantially limits the generalizability of this approach to clinical practice. Shortening treatment to less than 12 weeks should be done with caution and performed at the discretion of the practitioner.

Disclosure:The author is long GILD, ENTA. (More...)The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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