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entirely upend the above simplistic prediction of how competition in the HCV game will unfold if RG101 reaches the market in 2017 or 2018. Based on data Regulus released in October, approximately 40 percent of patients had undetectable levels of virus within 2 weeks of receiving a single injection of RG101, and they remained undetectable as of the date of the press release, in some cases months after the injection, suggesting these patients were cured.
The potential impact of Regulus’ agent on the HCV market has been downplayed. Some investors and physicians argue that there is no place for an injectable drug in what has become an all-oral playing field. In the past, patients with HCV objected to injections of another therapy called interferon because it made them feel terrible, causing flu-like symptoms, and had to be self-administered over 6 to 12 months. The interferon injections and RG101 are hardly comparable. Unlike interferon, RG101 so far appears to be safe and well tolerated, even after repeated injections at higher doses.
If more data support those already reported for RG101, then a simple and highly effective “sandwich” regimen becomes plausible—a single physician-administered injection of RG101, followed by a 4 to 6 week prescription of an oral regimen, possibly ending with another injection of Regulus’ drug. With RG101 alone knocking down the virus for a prolonged period of time, it may not matter which oral regimen is used in the sandwich. In other words, RG101 may prove a great equalizer; anyone’s drugs may prove “good enough” when sandwiched between two injections of RG101 for 4 to 6 weeks. By potentially enabling more players to become competitive, Regulus threatens the market share of both Gilead and AbbVie. In addition, if RG101 enables, for example, a 4-week sandwich regimen, the shortened dosing time (from 8 to 12 weeks, to 4) would cut Gilead’s revenues by 50 to 67 percent and AbbVie’s by 67 percent. This revenue reduction could be captured in Regulus’ pricing of RG101, keeping the cost per cure the same, but shortening the treatment regimen.
Regulus could also pursue a response-guided treatment paradigm that, if successful, would have far more impact on established HCV players. In that scenario, all patients would start with a shot of RG101. After 4 weeks, a patient would see their physician again to get a blood draw and a second shot of RG101. The blood draw would be analyzed, and, if the patient’s virus was undetectable (this is called an “RVR4” response), he or she would not need any other treatment. If the patient still had detectable virus, then the physician would prescribe a 4 to 6 week oral regimen, such as Harvoni or Viekira Pak, to ensure a cure.
This scenario is reminiscent of prior regimens in HCV, where patient response after 4 weeks of treatment (i.e., RVR4) with Vertex Pharmaceuticals’s (NASDAQ: VRTX) telaprevir (Incivek) or Merck’s boceprevir (Victrelis) determined whether patients received an extra 6 months of treatment. Such a response-guided regimen would be judged by the overall cure rate and not just by the cure rates seen with RG101 alone; as long as the cure rates were similar to the roughly 95 percent of other regimens, it would likely be approved and used. If 40 percent of patients had undetectable levels of virus after 4 weeks of treatment, as was the case in the phase 1 data released in October, then 40 percent of patients would be treated with just RG101 and 60 percent would get the add-on oral therapy for 4 to 6 weeks. That would result in an overall reduction in the number of oral doses of 75 percent for Gilead and 80 percent for AbbVie, with a similar drop in their revenues.
Those still doubting that there is room for an appropriately priced, injectable drug in future HCV regimens should also consider the incentives of physicians, who want to remain relevant to their patients and monitor their progress. By administering an RG101 injection, physicians would be more actively involved (and more relevant) in the care of their patients, and they would also be paid for their efforts. Under current reimbursement conventions, physicians would be compensated at 6 percent of RG101’s price, just as oncologists and rheumatologists are paid 6 percent of the costs of the injected and infused drugs they administer. Physicians are not compensated for prescribing oral medications. Whether such incentives should influence how a physician treats a patient is an entirely separate question, but these incentives do exist; thus, they have to be taken into account when anticipating RG101’s impact on the HCV market.
With only a modest amount of clinical data, Regulus is considered a long shot at the moment; therefore, Abbvie, Gilead, Bristol, Merck, Achillion, and any other HCV player should first optimize their all-oral regimen strategy. In other words, there is still strategic sense for AbbVie and Bristol to vie for Achillion to ensure their competitive positioning against Gilead and eventually Merck, and to keep Achillion out of another player’s hands.
Assuming that happens and only Gilead, AbbVie, Bristol, and Merck are left, these four players will all still need to worry about Regulus—and the company that wins Regulus could end up with the best regimen. For the ones that do not, even an all-oral, 12-week regimen will likely be considered “good enough” to compete if it is offered at a big enough discount. But competing on price has not been the traditional aspiration of pharmaceutical companies; therefore, those projected to bring up the rear need to up their game, while those currently leading in quality should be thinking about how to stay ahead.
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