AbbVie's Pain is Gilead's Gain After FDA Slaps Warning on AbbVie’s Hepatitis Drugs

Published: Oct 26, 2015

AbbVie's Pain is Gilead's Gain After FDA Slaps Warning on AbbVie’s Hepatitis Drugs
October 23, 2015
By Mark Terry, Breaking News Staff

The U.S. Food and Drug Administration (FDA) warned today that Chicago-based AbbVie ’s Viekira Pak and Technivie, for hepatitis C (HCV), can cause serious liver injury in patients that have underlying advanced liver disease. The agency will require AbbVie to add additional safety labeling.

AbbVie announced, as a result, that the labeling has been changed from “not recommended in Child Pugh B patients” to a label that indicates the drugs are contraindicated in patients with Child-Pugh B cirrhosis. Patients with Child-Pugh C have always been contraindicated for the drugs.

The FDA warning came after seven patients on the drugs died from liver failure.

“Most patients with these severe outcomes had evidence of advanced cirrhosis prior to initiating therapy,” said AbbVie spokeswoman Jackie Finley in an email to BloombergBusiness. “Estimates of frequency cannot be made and a causal relationship between treatment and these events has not been established.”

In its alert, the FDA noted that although the direct connection was difficult to determine, some of patients’ symptoms stopped when they ceased taking the drugs. The labels on Viekira Pak, which was approved by the FDA in 2014, already indicated the drug wasn’t recommended for patients with serious liver disease.

The hepatitis C treatment market has been a hot one the last year or so, as AbbVie went head-to-head in a price war with Gilead Sciences, Inc. and its Sovaldi and Harvoni, which currently lead the market. Johnson & Johnson plans to start a Phase II trial that will combine its HCV drug Olysio with two other HCV drugs, AL-335 and ACH-3012 that J&J acquired through the acquisition of Alios BioPharma and through a collaboration deal with Achillion Pharmaceuticals, Inc. .

Harvoni, Sovaldi, Viekira Pak, and Olysio are very effective HCV drugs, although Harvoni and Sovaldi, generally speaking, are probably a little bit better, and dominate the market. Viekira Pak appears to be having some side effects issues in comparison, although is still a very effective drug.

J&J hopes its new cocktail of drugs will cut the treatment time in half, from about 12 weeks to six. Because all of these drugs are very expensive, but largely effective, the ability to cut the treatment in time would be very appealing to patients and insurance companies. A 12-week course of Sovaldi runs about $84,000, and Harvoni costs about $94,500. Viekira Pak is priced at about $83,320 for a 12-week regimen. Olysio runs about $66,360 for a 12-week course of treatment.

Express Scripts Holding Co., inked an exclusive distribution deal with AbbVie, part of a pricing negotiation to receive a discount on Viekira Pak. In light of the new safety warnings, Express Scripts Inc. spokesman Brian Henry told Bloomberg that it will evaluate the FDA warning “to determine if any additional action is required.”

Asthika Goonewardene, an analyst with Bloomberg Intelligence, indicated that Gilead’s drugs and AbbVie’s have different mechanisms of treatment, and hasn’t seen any indication in the data that Harvoni or Sovaldi might have this same problem. Goonewardene did say, however, that this warning would mean that Gilead “doesn’t have to offer as aggressive a rebate for its drugs anymore.”

AbbVie took the news hard. Shares traded for $56.53 on Oct. 16 and are currently trading for $48.26. The company’s stock trend has been largely downward since July 28 when shares traded for $71.23.

Gilead Sciences , however, jumped at the news. Shares traded for $101.73 on Oct. 21 and are currently trading for $107.60. For the last year, the company’s stock has been fairly volatile, trading at a low of $89.45 on Dec. 23, 2014 and a high of $122.21 on June 23, 2015.

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