Partner Up or Get Passed Up


I can only imagine the conversation:

Bristol-Myers Squibb (NYS: BMY) : "Hey partner, we've got a new hepatitis C drug candidate from our acquisition of Inhibitex. Want to combine it with your drug?"

Johnson & Johnson (NYS: JNJ) : "Sure, why not? Maybe it'll give us an edge against Gilead Sciences (NAS: GILD) , the front-runner in the quest for an all-oral hepatitis C treatment. But make sure you give it a really complicated name; INX-189 was too easy."

BMS: "Already done."

The duo expanded their partnership beyond combining BMS' daclatasvir with J&J's TMC435 to include a combination of TMC435 with BMS-986094, the compound formally known as INX-189. The companies also agreed that if daclatasvir and TMC435 work well in a phase 2 trial, they'll move it into a phase 3 trial.

The quest for an all-oral hepatitis C treatment to replace Merck's (NYS: MRK) PegIntron and Roche's Pegasys, which have to be injected, will likely require multiple drugs from different drugmakers. Hepatitis C drugs come in different classes that disrupt the virus in different ways. A few companies -- Gilead and Roche, for instance -- seem to have a drug in enough categories to develop a cocktail on their own, but that assumes they have the best (or at least good enough) drugs to get a decent cure rate. The current standard of care that combines an injectable drug with Vertex Pharmaceuticals' (NAS: VRTX) Incivek cures around 70% of patients, so any all-oral treatment would have to meet or exceed that.

Flying solo also poses a problem for timing. Gilead, for instance, is reportedly considering going it alone even though its GS-7977 works really well with Bristol's daclatasvir, as it has a drug of its own in the same class as daclatasvir. That choice will likely result in getting to the market slower.

Sure, combining drugs means sharing profits, but I think that's a good trade-off for the potential to be best in class and not let any other combination products pass you up.

Now if we can just get easy-to-remember trade names for all these drugs.

At the time thisarticle was published Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson, Vertex Pharmaceuticals, and Gilead Sciences, as well as creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.
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