Roche will help promote Merck’s newly approved hepatitis C drug Victrelis (boceprevir) under a strategic partnership that may help bolster the firms’ chances in an upcoming market share battle.
The agreement stunned Wall Street, since Merck and Roche already sell rival versions of a standard hepatitis C treatment. At the same time, the deal makes sense because those rival therapies, known as pegylated interferons, will form the foundation of new hepatitis C treatment regimens where Victrelis and Vertex/Johnson & Johnson’s Incivek (telaprevir), whose PDUFA date is May 23rd, are entering the market.
Victrelis’ approval last Friday set up what is widely predicted to be a fierce battle for market share with Incivek. With the two protease inhibitors coming down the home stretch of phase III trials, data had narrowed differences between the two, but most analysts still have been giving the edge to Incivek. Merck crossed the finish line first, securing an on-time approval and fairly broad label that implies the drug works with its own pegylated interferon, PegIntron, or with Roche’s, Pegasys.
Merck spokeswoman Pam Eisele told MM&M that reps will begin detailing efforts this week and that the firm hopes to leverage its pre-existing position in the hepatitis C space. “We know this market well and have established relationships with customers as well as deep scientific and commercial knowledge and a complete franchise offering,” Eisele said by e-mail.
The agreement covers the US market and may be extended to other countries, the companies said. Victrelis just received a recommendation from the CHMP for EU approval, as well, in combination with current standard therapy.
Victrelis is approved for use in combination with a pegylated interferon and ribavirin, which Merck also sells under the brand name Rebetol (Roche’s version is called Copegus). It marks the first in a new class of medicines to come to market in a decade for treating hepatitis C and can significantly increase a patient’s chance of clearing the virus from the body, as well as allow for a shorter duration of treatment in many patients. Side effects include anemia.
Since the approval, Merck has taken steps to build on its hep C legacy, setting the Victrelis price competitively at $1,100/week wholesale, arguably less than it could have charged for a novel medication. That alone could boost uptake, wrote Credit Suisse analyst Catherine Arnold, telling investors, “We expect MRK to use pricing and other tactics to help boost market share given the presence they already have in the hepatitis C market with PegIntron and Rebetol to battle against Incivek, which is generally regarded as the more potent drug of the two.”
As for Merck’s deal with Roche, Sanford Bernstein analyst Tim Anderson pointed out that Victrelis was studied mostly in combination with PegIntron, which has lower market share than Roche’s Pegasys, something that could have capped Victrelis’ uptake. “Now, with Roche on board, this potential shortcoming gets more than removed, in our opinion,” noted Anderson.
Vertex is unlikely to strike a similar deal with Roche, since doing so would require Roche to co-promote a competing protease inhibitor. “In essence, the Merck/Roche agreement effectively tries to shut telaprevir out of the market to some degree,” Anderson observed. “Clearly, physicians will still use telaprevir regardless of the Merck/Roche agreement because of its better efficacy (offset by its unique skin rash), but Victrelis’ competitive position is undoubtedly strengthened by the new collaboration.”