Achillion Receives $15M from J&J for HCV Study Enrolment

Achillion Pharmaceuticals, Inc. ACHN announced that it has received a milestone payment of $15 million from Johnson & Johnson’s JNJ pharma wing, Janssen for the initiation of patient enrollment in the OMEGA-1 phase IIb global study of JNJ-4178.

Achillion’s share price has fallen 1.7% in the past one month, underperforming the Zacks classified Medical-Biomedical and Genetics industry which has witnessed a fall of 0.7% in the same time period.

 

The candidate, JNJ-4178, is a triple combination of AL-335, odalasvir (also known as ACH-3102) and J&J’s Olysio (simeprevir).

The phase IIb, open-label, multi-center OMEGA-1 study is expected to enroll approximately 300 treatment-naive and treatment-experienced patients with chronic hepatitis C virus infection (HCV) without cirrhosis. Patients in the study will receive the triple combination once daily for either 6 or 8 weeks. The primary efficacy endpoint is the percentage of patients with a sustained virological response 12 weeks after the end of treatment (SVR12).

Presently, JNJ-4178 is also being evaluated in a phase IIa study in HCV patients with or without compensated cirrhosis. Interim results from the phase IIa study, presented in Sep 2016, displayed that all the patients in cohort 1 remained HCV RNA-undetectable at 24 weeks after the therapy completion. Further, the phase IIa study confirmed the required dose for each component as well as the treatment duration.

Per the company, more than 150 million people are infected with HCV worldwide including approximately 3 million people in the U.S. Therefore, successful development of the combination drug will allow the company to tap into a huge unmet potential in the U.S.

In Jun 2015, Achillion out-licensed its HCV portfolio to J&J. The agreement gives J&J global rights to develop and commercialize one or more of Achillion's lead HCV assets including ACH-3102, ACH-3422 and sovaprevir.

The deal is a logical one for Achillion, given J&J’s expertise in HCV development and commercialization capabilities and also brings in funds for the company. The deal could see Achillion receiving up to $1.1 billion in the form of development, regulatory and sales milestone payments and a separate equity investment. Moreover, it is entitled to receive tiered royalties between mid-teens and low-twenties on future global sales. Further, all development and commercialization costs will be borne by J&J.

Zacks Rank & Other Key Picks

Achillion currently carries a Zacks Rank #2 (Buy). Some similarly-ranked stocks in the health care sector include Cambrex Corporation CBM and Heska Corporation HSKA. Both Cambrex and Heska sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings estimates improved 19.5% for 2016 and 10.9% for 2017 in the last 60 days. The company posted a positive earnings surprise in each of the four trailing quarters, with an average beat of 301.64%. Its share price has increased 87.6% year to date.

Cambrex’s earnings estimates increased 3.7% for 2016 and 5.2% for 2017 in the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 19.78%. Its share price is up 13.9% year to date.

ACHILLION PHARM Price

 

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