Why Achillion Pharmaceuticals Shares Soared in October

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Why Achillion Pharmaceuticals Shares Soared in October

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What: Achillion Pharmaceuticals is a clinical stage biotech researching hepatitis C treatment. Odalasvir (ACH-3102) is an NS5A inhibitor. ACH-3422 is a nucleotide NS5B inhibitor. Sovaprevir is a protease inhibitor. Shares jumped 13.2% in October. Co-developer Johnson & Johnson outlines plans for mid stage studies that include Achillion’s lead candidate. .

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Achillion Pharmaceuticals

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So What: Hepatitis C is a major market indication affecting millions of people globally. ~3 million people in the United States. ~9 million people in Europe. ~1.5 million people in Japan. Up to 170 million people worldwide.

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So What:

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So What: Johnson & Johnson is positioning its HCV therapy as a short duration, best-in-class solution. Mid stage study to begin soon. Evaluates J&J’s Olysio and AL-335, plus Achillion’s ACH-3102. Studying safety and efficacy over four-, six-, and eight-week treatment durations.

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Now what: Hepatitis C treatment is a multi-billion dollar market. Top therapies annual sales run rate of >$22 billion exiting Q3.

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Now what continued: Increasingly competitive marketplace. Merck FDA decision date for its HCV therapy on January 28. Gilead Sciences application of its next-generation pan-genotype HCV therapy submitted in October 2015. AbbVie FDA application for once-daily dosing of Viekira Pak submitted in October 2015.

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Now what continued: Future battle for market share to focus on short duration therapies with 95% plus cure rates. No guarantee that J&J’s trials will succeed. Data from phase 2 expected in 2016. If successful and approved, Achillion will receive milestones and royalties. Development, sales, and regulatory milestones of $1.1 billion. Tiered royalties from mid-teens to low 20% range.

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Now what continued: Achillion Pharmaceuticals is a high-risk company without any products on the market. Big potential market. Potentially shortest duration HCV therapy if approved. Significant trial and commercialization experience via J&J. Suitable for risk-tolerant investors able to withstand a clinical trial failure.

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This iSecret stock could make Achillion’s pop look tiny.