Hepatitis Treatment

The Hepatitis Market Outlook to
2016
Competitive landscape, market size, pipeline analysis
and growth opportunities
Reference Code: BI00042-020

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Publication Date: September 2011
About the author
Tapan Bankar is an analyst within Scrip Business Insight’s pharmaceuticals team. Prior to joining Scrip
Business Insights he worked for more than two years as a Brand Manager with Emcure Pharmaceuticals, a
leading developer of recombinant human biogenerics, APIs and finished formulations with exposure in
strategic planning, product management, competitor and market analysis, marketing plan execution among
others. Tapan holds an MBA in Biotechnology Management with specialization in Marketing and International
Business, from MITCON, Pune and a Bachelors degree in Biotechnology from SMCBR, Nagpur University.
Disclaimer
Copyright © 2011 Business Insights Ltd
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Table of Contents
About the author 2

Disclaimer 2
Executive summary 13
Overview and epidemiology of hepatitis 13
Global market analysis 14
Pipeline analysis 14
Competitive landscape 15
Chapter 1 Overview and epidemiology of hepatitis 17

Summary 17
Introduction 18
Hepatitis A 18
Overview 18
Diagnosis and treatment 19
Epidemiology 20
Epidemiology of hepatitis A by country 20
Hepatitis B 23
Overview 23
Epidemiology 25
Forecast epidemiology 29
Hepatitis C 30
Overview 30
Epidemiology 32
Forecast epidemiology 35
Hepatitis D 36
3
Overview 36
Hepatitis E 36
Overview 36
Chapter 2 Global market analysis 38

Summary 38
Introduction 39
Market analysis by country 40
Market analysis by drug class 41
Leading brand dynamics 42
Pegasys (peginterferon alfa-2a) – Roche 42
Hepatitis Vaccines – GSK 43

Engerix B 43
Twinrix 44
Baraclude (entecavir) – BMS 45
PegIntron (peginterferon alfa-2b) – Merck 46
Viread (tenofovir disoproxil fumarate) – Gilead Sciences 46
Copegus (ribavirin) – Roche 47
Rebetol (ribavirin) – Merck 47
Hepsera (adefovir dipivoxil) – Gilead 48
A new era of treatment for Hepatitis C virus infection 49

Introduction 49
Protease inhibitors (PIs) 50

Incivek (telaprevir) - Vertex 50
Victrelis (boceprevir) - Merck & Co. 53
The competition between Incivek and Victrelis 55
Factors governing the market space of Incivek and Victrelis 57
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Marketing strategy impacts product uptake 58
Adverse effects, a cause of concern 59
Efficacy will influence uptake 60
Dosing method 61
Duration of therapy may drive short term sales 61
Reimbursement decisions to be critical in deciding the winner 61
Product life cycle and forecast 62
Hepatitis market drivers, challenges, and resistors 64

Launch of novel drugs for HCV treatment will promote revenue sales growth 64
Increased awareness of hepatitis will create a short to medium term sales increase 64
Challenges in bridging the treatment gap impedes forecast market uptake 65
Warehoused patients seeking new treatment options will temporarily create demand 66
Drugs with reduced adverse effects change the treatment modality 67
Launch of biosimilars and generics will slow market growth 68
The WHO’s approval of the SFDA’s vaccine regulation will increase low cost vaccine supply 68
Increasing HIV-HCV/HBV co-infection rates if not reduced will affect sales growth 68
Key events 69
Bristol-Myers Squibb acquires ZymoGenetics for $885m 69
The FDA grants fast track status to Pharmasset’s PSI-7977 for the treatment of HCV 70
Development program for therapeutic intranasal vaccine for treatment of hepatitis B 70
Novartis discontinues the development of Joulferon/Zalbin on safety concerns 70
GSK signs microRNA deal with Regulus for HCV 71
Government initiatives to curb the incidence of hepatitis 71
Vertex collaborates with Alios for hepatitis portfolio 72
Biosimilars and generics 72

Leading hepatitis drugs sales forecast 74
Chapter 3 Pipeline analysis 75
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Summary 75
Introduction 76
Key trends in hepatitis R&D 76
Promising developments in the hepatitis C pipeline 76
Product differentiation will hold the key to success in the hepatitis market 77
Multi-billion dollar opportunity for a successful drug class 77
The treatment-failure population presents a significant opportunity 78
End stage renal disease (ESRD) patients present high potential for vaccines 78
Despite the introduction of novel treatments, the SOC for hepatitis C will not change 78
Profiles of the key pipeline products 79

TMC435 – Medivir/J&J 79
Overview 79
Clinical 80
BI 201335 – Boehringer Ingelheim 81

Overview 81
Clinical 81
Vaniprevir (MK-7009) – Merck 83

Overview 83
Clinical 83
Debio 025 – Novartis/Debiopharm 84

Overview 84
Clinical 85
Danoprevir (ITMN-191/RG7227) – Roche 86

Overview 86
Clinical 87
RG-7128 – Roche/ Pharmasset 88

Overview 88
Clinical 88
ABT-450 – Abbott/Enanta 89
Overview 89
Clinical 89
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BMS-790052 – Bristol-Myers Squibb 91
Overview 91
Clinical 91
GS-9190 (Tegobuvir) – Gilead Sciences 92

Overview 92
Clinical 92
GS-9256 – Gilead Sciences 94

Overview 94
Clinical 94
ACH-1625 – Achillion 96
Overview 96
Clinical 96
Chapter 4 Competitive landscape 98

Summary 98
Introduction 99
Competitive positioning of the leading players in the global hepatitis market 99
Roche 100
Marketed product portfolio 100
Pegasys 101
Copegus 101
Strategic and growth analysis 102

Drivers of growth 102
Resistors of growth 103
GSK 105
Engerix-B 105
Havrix 105
Twinrix 106
Zeffix 106
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Merck & Co. 108

Pegintron 108
Rebetol 109

Gilead 111
Viread 112
Hepsera 112

Bristol-Myers Squibb 115


Appendix 118
Scope 118
Methodology 118
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Market size methodology 118
Epidemiology 118
Market forecast 119
Glossary/Abbreviations 120
Glossary 120
Abbreviations 121
Bibliography/References 122
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Table of figures
Figure 1: Evolution of HCV treatment modalities 49
Figure 2: Perceptual position of Incivek and Victrelis 55
Figure 3: Competitive position of Incivek and Victrelis 57
Figure 4: Product life cycle of Incivek and Victrelis 62
Figure 5: Forecast sales of Incivek and Victrelis to 2016 63
Figure 6: Sales of the leading players in the global hepatitis market ($m), 2006-2010 100
Figure 7: Response of patients to drug therapy 120
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Table of tables
Table 1: Worldwide endemicity of HAV infection 20
Table 2: Segmentation of regions by prevalence of hepatitis B 26
Table 3: Prevalence of hepatitis B by country 28
Table 4: Forecast epidemiology of chronic hepatitis B to 2016 29
Table 5: Prevalence of hepatitis C infection by country 34
Table 6: Forecast epidemiology of hepatitis C in the 7MM to 2016 35
Table 7: Global hepatitis market by region ($m), 2010 40
Table 8: Hepatitis market by drug class ($m), 2010 41
Table 9: Leading brands in the global hepatitis market ($m), 2010 42
Table 10: Result of SPRINT-2 clinical trial in different cohorts 54
Table 11: Efficacy comparison of Incivek and Victrelis in Phase III study 60
Table 12: Forecast sales of Incivek and Victrelis, 2010-16 63
Table 13: Impact of drivers and challenges in hepatitis market to 2016 64
Table 14: Adverse effects associated with different treatment modalities 67
Table 15: Leading hepatitis brands sale forecast ($m), 2010-16 74
Table 16: An overview of TMC435 79
Table 17: An overview of BI 201335 81
Table 18: An overview of vaniprevir 83
Table 19: An overview of Debio 025 84
Table 20: An overview of danoprevir 86
Table 21: An overview of RG7128 88
Table 22: An overview of ABT-450 89
Table 23: An overview of BMS-790052 91
Table 24: An overview of GS-9190 92
Table 25: An overview of GS-9256 94
Table 26: An overview of ACH-1625 96
Table 27: Leading players in the global hepatitis market ($m), 2010 99
Table 28: Performance of Roche's hepatitis products ($m), 2010 101
Table 29: Roche’s hepatitis R&D pipeline, April 2011 102
Table 30: Performance of GSK's hepatitis products ($m), 2010 106
Table 31: GSK’s hepatitis R&D pipeline, Feb 2011 107
Table 32: Performance of Merck's hepatitis products ($m), 2010 109
Table 33: Merck’s hepatitis R&D pipeline, Feb 2011 110
Table 34: Performance of Gilead's hepatitis products ($m), 2010 112
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Table 35: Gilead’s hepatitis R&D pipeline, Feb 2011 114
Table 36: Performance of BMS’ hepatitis products ($m), 2010 116
Table 37: BMS’ hepatitis R&D pipeline, Feb 2011 117
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Executive summary
Overview and epidemiology of hepatitis

Hepatitis is a disease characterized by inflammation of the liver and is classified as either viral or non-
viral hepatitis, on the basis of causative agents. Out of the six different kinds of viral hepatitis, A, B, C,
D, E, and G, hepatitis A, B, and C remain the most common forms of the virus globally.
Although the hepatitis viruses differ widely in their morphology, genomic structure, and mode of
replication, there is a significant overlap in their clinical manifestations, making serological tests
necessary to identify the hepatitis type.
Despite, a significant number of hepatitis cases going unreported due to the asymptomatic nature of
the disease about 1.4m cases of acute hepatitis A are reported every year while the number of chronic
hepatitis B cases is 350m and hepatitis C is 170m.
The number of new cases of hepatitis is expected to decline due to the introduction of hepatitis
vaccines in the national immunization schedules in most countries and mandatory screening of blood
donors.
Vaccines are only available for hepatitis A and B, and in the absence of vaccine against hepatitis C,
hepatitis A, and B vaccines are recommended for HCV-positive individuals as HCV infected individuals
are at high risk of developing other forms of hepatitis infection.
Although hepatitis A is one of the most common forms of hepatitis infection, it usually does not lead to
chronic hepatitis. While hepatitis C is identified as one of the most common cause of liver disease and
liver transplantation.
Against the backdrop of a large patient population who are not having their condition adequately
controlled by the currently available treatment for chronic hepatitis C, a large number of new therapies
with new mechanisms of action are under development, to combat Hepatitis C infections. These include
protease and polymerase inhibitors, nucleoside polymerase inhibitors, and cyclophilin inhibitors.
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Global market analysis
The global hepatitis market was valued at $6.5bn in 2010, an increase of 1.2% over 2009..
Collectively, the leading seven hepatitis markets representing 67.9% of sales exhibited Y-o-Y growth of
22.4% to reach $4.3bn in 2010. In terms of size, the 5EU dominated the global hepatitis market with a
market share of 27.4%.
Although, most of the hepatitis infected population is in underdeveloped or developing countries, the
market share of these countries in the global hepatitis market is relatively lower, due to the limited
access to healthcare facilities resulting in a significant un-diagnosed and un-treated population.
Viral hepatitis products with sales of $2.7bn and a Y-o-Y growth of 17.2% were the leading drug class
for hepatitis treatment. The interferon drug class was the next largest class with a market share of
39.8% in 2010.
The top 10 brands in the global hepatitis market generated combined sales of $6.4bn accounting for
98.5% of the market in 2010. Roche’s Pegasys was the best selling brand in the market with a market
share of 24.3% in 2010.
The launch of two new products indicated for the treatment of hepatitis C, belonging to the protease
inhibitor (PI) drug class (Incivek and Victrelis), is anticipated to change the treatment modality. The
drugs are estimated to rapidly reach their peak sales by 2012-13 due to their superior therapeutic
profile compared to the currently marketed products.
The market for biosimilars for the treatment of hepatitis was valued at $12m in 2010. Scrip Business
Insights however, forecasts the biosimilars market to grow at a CAGR of 75.5% in 2010–16.
Pipeline analysis
The hepatitis pipeline is comprised of a significant number of novel compounds in the early-stages of
development. The potential for market success is largely attributable to a large patient population,
which requires long term treatment. There is also a great deal of unmet medical need.
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Hepatitis C has the most promising products in development. Presently, pegylated interferon commonly
used in combination with the ribavirin is the standard of care (SOC) for the treatment of hepatitis C.
A strong market opportunity exists in patients less responsive to current hepatitis treatment, including
adults over 40 years of age, individuals with chronic renal disease and individuals with HIV. The
treatment-failure population, representing approximately 40% of the total hepatitis C infected
population, is expected to present a significant commercial opportunity.
According to the WHO, over 170m people worldwide, are chronically infected with HCV, with 3 to 4m
new infections occurring each year. Roughly 75% of these cases fail to resolve acutely and evolve into
a chronic state. Additionally there are several other patients waiting for a new therapy with higher cure
rates. Together they represent a multibillion dollar market for any successful new drug candidate.
Cyclophilin inhibition is a novel approach to treat HCV which is based on targeting host factors that are
required by the virus for replication. The mechanism of action is different to that used by currently
available drugs and will therefore have less resistance. Moreover the inhibitor could be used in
combination with direct antivirals. Debio 025 developed by Novartis/Debiopharm is the forerunner in
this category.
Competitive landscape
Roche with 2010 sales of $1.8bn and Y-o-Y decline of 0.3% lead global hepatitis market in 2010.
Pegasys ($1,577m) and Copegus ($308m) were the major contributors to the company’s 2010 sales.
Roche accounted for 28.3% of the global hepatitis market and had a CAGR of 3.9% during 2006–10.
GSK was the second largest player in the global hepatitis market, and generated sales of $1.6bn in
2010 with a Y-o-Y growth of 5.6% over 2009. The strong performance of GSK was primarily because of
its vaccines which together posted sales of $1.1bn with a 67.4% share of the company’s hepatitis
portfolio.
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Merck was the third largest company in the global hepatitis market, with 2010 sales of $1.2bn. The
revenue generation of Merck's marketed hepatitis franchise is heavily dependent on the sales
performance of its viral hepatitis products which, in 2010, registered sales of $1.1bn.
In 2010, Gilead's hepatitis portfolio registered sales of $933m, at a Y-o-Y decline of 1% over the
previous year, placing it as the fourth largest pharmaceutical company within the global hepatitis
market.
Positioned at number five in the global hepatitis market, BMS recorded a Y-o-Y increase in sales of
26.8%, to reach $931m in 2010. BMS’ presence in this market is attributed to the strong sales
performance of its well established product Baraclude.
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Chapter 1 Overview and epidemiology of hepatitis
Summary
Hepatitis is a disease characterized by inflammation of the liver and is classified as either viral or non-
viral hepatitis, on the basis of causative agents. Out of the six different kinds of viral hepatitis, A, B, C,
D, E, and G, hepatitis A, B, and C remain the most common forms of the virus globally.
Although the hepatitis viruses differ widely in their morphology, genomic structure, and mode of
replication, there is a significant overlap in their clinical manifestations, making serological tests
necessary to identify the hepatitis type.
Despite, a significant number of hepatitis cases going unreported due to the asymptomatic nature of
the disease about 1.4m cases of acute hepatitis A are reported every year while the number of chronic
hepatitis B cases is 350m and hepatitis C is 170m.
The number of new cases of hepatitis is expected to decline due to the introduction of hepatitis
vaccines in the national immunization schedules in most countries and mandatory screening of blood
donors.
Vaccines are only available for hepatitis A and B, and in the absence of vaccine against hepatitis C,
hepatitis A, and B vaccines are recommended for HCV-positive individuals as HCV infected individuals
are at high risk of developing other forms of hepatitis infection.
Although hepatitis A is one of the most common forms of hepatitis infection, it usually does not lead to
chronic hepatitis. While hepatitis C is identified as one of the most common cause of liver disease and
liver transplantation.
Against the backdrop of a large patient population who are not having their condition adequately
controlled by the currently available treatment for chronic hepatitis C, a large number of new therapies
with new mechanisms of action are under development, to combat Hepatitis C infections. These include
protease and polymerase inhibitors, nucleoside polymerase inhibitors, and cyclophilin inhibitors.
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Introduction
Hepatitis, characterized by inflammation of the liver, has originated from ancient Greek and Latin words,
‘hepar’ (liver), and ‘itis’ (inflammation). Hepatitis may be classified on the basis of causative agents as either
viral or non-viral hepatitis, and on the basis of duration as acute or chronic. Viral hepatitis is caused by
viruses while non-viral hepatitis is caused by a number of causative factors including chemicals, drugs,
alcohol, inherited diseases, or autoimmune diseases. Six different kinds of viral hepatitis, A, B, C, D, E, and
G, have been identified, with each of these being caused by a different virus. Hepatitis G lives in the blood
without causing any apparent illness while the other five cause the disease. The hepatitis viruses differ
widely in their morphology, genomic structure and mode of replication; however, there is a significant overlap
in their clinical manifestations. Hepatitis A, B, and C are the most prevalent across the globe. Vaccinations
exist against hepatitis A and B, but no vaccination is currently available against hepatitis C. However,
antiviral treatments are available against the hepatitis B and C viruses. The symptoms of hepatitis vary
widely depending on the individual, geography, and type of infection, however, the most prevalent symptoms
are similar to seasonal flu symptoms and include a loss of appetite, nausea, vomiting, fever, weakness,
jaundice, and abdominal pain.
Hepatitis A
Overview
Hepatitis A is a contagious liver disease and is caused by infection with Hepatitis A virus (HAV). Identified in
1973, HAV is a non-enveloped, spherical, and positive stranded RNA virus. HAV infection is usually mild and
is often only discovered during a blood test. It usually does not lead to chronic liver disease. The virus is
primarily transmitted via the fecal-oral route and is spread through close contact with an infected person,
ingestion of contaminated food or drinks, and blood transfusions; however the transmission by blood
transfusion is rare. Communicability of HAV is highest during one week prior to the onset of the symptoms
until around two weeks after the onset of the symptoms, with high concentrations of the virus present in the
stools of the patient. HAV is predominant in developing and underdeveloped countries due to poor sanitation.
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Diagnosis and treatment
Biochemically and clinically, it is not possible to distinguish an acute HAV infection from other types of
hepatitis, making serological tests necessary for a virus-specific diagnosis. The diagnosis involves detection
of two types of immune globulin antibodies: immune globulin M (IgM) and immune globulin G (IgG). IgM is
produced when the body is exposed to the virus while IgG develops later and remains in the body for many
years, protecting the body against further infection. Presence of IgM indicates the occurrence of the disease,
while presence of IgG without IgM indicates that the subject had the disease previously, but is not infected
presently. A total anti-HAV test for both the antibodies detects current and previous infection with hepatitis A.
There is no specific treatment for hepatitis A and the therapy is only intended to be supportive and
concentrates primarily on adequate nutritional balance. Consumption of eggs, milk, and butter is suggested
to the patients to help provide a correct calorific intake. Alcohol consumption is discouraged during acute
hepatitis due to its hepatotoxic effect.
Prevention through vaccination is a more effective approach against HAV than treatment with drugs.
Immunoglobulin (IG), prepared from the pooled plasma of many donors has been the standard prophylactic
for HAV. Pre-exposure administration of IG can reduce the incidence of HAV by up to 90%, while its
administration within two weeks of exposure may prevent the development or reduce the severity of the
disease. IG, however, provides only short-term protection, necessitating re-administration on a regular basis.
Hence, it is only used in situations, where immediate protection is required.
With the development of inactivated vaccines for HAV, which are commercially available in most parts of the
world, their use is encouraged and preferred for pre-exposure prophylaxis when repeated exposure is
anticipated. These vaccines are safe, highly immunogenic, and provide 20-year protection from HAV
infection. Harvix, Vaqta, and Avaxim are the most commonly used vaccines for prevention of HAV. Unlike IG,
these vaccines can be administered simultaneously with a number of other vaccines including diphtheria,
polio, tetanus, oral typhoid, cholera, Japanese encephalitis, rabies, yellow fever, and hepatitis B.
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Epidemiology
According to the World Health Organization (WHO), over 1.4m cases of hepatitis A are reported every year;
however the reported cases refers to acute hepatitis A, as HAV infection does not lead to chronic or
persistent hepatitis. Hepatitis A is found to be more prevalent in regions where the levels of sanitation and
hygiene are low. The prevalence is high in Latin America, India, China, South-East Asia, and Africa;
intermediate in Eastern Europe, Japan; and low in the US, Australia and Western Europe. Table 1
represents the worldwide endemicity of HAV infection.
Table 1: Worldwide endemicity of HAV infection
HAV prevalence Regions affected Average age of Mode of

patients (years) transmission
Very high Africa, parts of South <5 – person-to-person
America, the Middle – contaminated food
East and south-east and water
Asia
High Brazil's Amazon 5-14 – person-to-person
basin, China and – outbreaks and
Latin America contaminated food
and water
Intermediate Southern and Eastern 5-24 – person-to-person
Europe, some regions – outbreaks and
of the Middle East contaminated food
and water
Low Australia, USA, 5-40 – common source
Western Europe outbreaks
Very low Northern Europe and >20 – travel to high

Japan endemicity areas,
uncommon source
Source: WHO BUSINESS INSIGHTS
Epidemiology of hepatitis A by country
China
The incidence and prevalence of hepatitis A depends on the rural-urban population split with higher
incidence found in the rural areas. In the early 1990s, it was found that about one-half of the children in
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China aged 10 years had antibodies against HAV, by comparison there were very low numbers observed in
urban areas even among the geriatric population. In general however, improved socio-economic status
coupled with an extensive vaccination program has led to a decrease in annual incidence of hepatitis A from
50/100,000 in 1990 to 5/100,000 in 2005.
India
Extensive studies conducted in India have indicated that the region is highly endemic for HAV. Studies
conducted in the 1980s and 1990s reported high incidence of the disease in adolescents and adults. This
trend however is changing with the introduction of hepatitis vaccines in the national immunization program in
India. In the 2000s, more than 90% of adults and adolescents acquired immunity in their pre-school years.
Brazil
The majority of studies conducted in the 2000s (from 2002-2008) have reported similar results of more than
half of the infant population having immunity against HAV. This is also in line with the data acquired through
studies conducted in the 1990s which reported high immunity rates. However, in the 1980s and early 1990s,
high seroprevalence of HAV was observed in young children. This high seroprevalence rate has now been
steadily declining over the years. The prevalence of the disease is not uniform however and is found to be
greater in the northern and north-eastern region than southern and south-eastern regions.
Australia
The incidence of hepatitis A in Australia has been decreasing for the past fifty years. Approximately 50% of
adolescents and young adults had anti-HAV in 1950s. This decreased to about 10% in the late 1990s and
2000s. The national incidence rate of hepatitis A in the 2000s was found to be 10/100,000 in children and
adolescents. The incidence was found to be higher in the north of the country than in the south. Furthermore,
the aboriginals of Australia had much more susceptibility to the disease than others.
Germany
In the 1990s, studies concluded that only 5% of children and adolescents and less than 50% of middle aged
adults had immunity against HAV. A nationwide survey in 1998 reported a 46.5% seroprevalence rate in the
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German population. In 2007, a study by Bonnani et al reported an annual mortality rate of 0.01 to
0.02/100,000 due to HAV infection.
Italy
Several studies conducted in the past few years has reported a steep decline in the prevalence of hepatitis A
among Italians though high prevalence rates continued to be observed in immigrants and refugees. High
socio-economic conditions and increased implementation of vaccination program has led to a decline in the
prevalence rates in Italy.
Spain
Seroprevalence studies conducted in Spain from the 1980s to the 2000s demonstrate that the rate of anti-
HAV infection is the population has been steadily declining. This is attributed to the high incidence of
vaccinations among the inhabitants of Spain. For example, HAV incidence in Basque country declined from
38/100,000 in 1986 to 9/100,000 in 1992 to 3/100,000 in 2004. In addition to this, the average age of patients
with HAV increased from 16 to 25 years (1994-2007).
UK
Studies in the UK to assess the incidence of hepatitis A in different population ranges have shown that there
is a low incidence level in all age groups. A study in the new born, conducted in 1980s and 1990s has
indicated no difference in seroprevalence in the participating population, thus confirming low incidence. Also,
a hospitalization rate of 0.7/100,000 every year and 13 deaths (mortality rate of 0.01/100,000) in the 1998-
2001 period is indicative of the low mortality rate due to HAV infection.
Canada
The number of people with detectable immunity against HAV infection has been steadily increasing in
Canada since the 1980s, the aboriginal population has a demonstrably higher prevalence rate than the rest
of the Canadian population. However, studies conducted in early 2000s has reported a low incidence rate of
4/100,000 (2002), indicating low endemicity of HAV in the region.
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US
HAV seroprevalence in US is found to be low. In 2004, the annual incidence rate was found to have
decreased to 2/100,000 from 10/100,000 in 1980s. This is attributed to the introduction of vaccination
programs in high risk areas, thereby decreasing geographic disparities in terms of HAV prevalence.
Japan
Data from various studies conducted in Japan indicate that the incidence of hepatitis A is very low in the
country. In the 1960s and 1970s, children had a low prevalence of the disease whilst the middle aged
population (aged 40-60 years) had a moderate rate of prevalence. Since the 1960s and 70s, the growing age
of the population has also pushed the average age of population with immunity against the HAV from middle
age to early old age (early 60s).Since the studies also conclude that the incidence of prior infection in people
below the age of 50 was less, this indicates that the overall prevalence of the disease in Japan is low.
Hepatitis B
Overview
Hepatitis B is caused by Hepatitis B virus (HBV), a double-stranded DNA virus from the hepadnaviridae
family. HBV is also referred to as type B hepatitis, serum hepatitis, and homologous serum jaundice. HBV
can cause lifelong infection, cirrhosis of the liver, liver cancer, liver failure, and may even result in death.
HBV is transmitted by contact with the blood or other body fluids of an infected person.
Acute infection
According to the WHO, approximately 90% of patients infected with HBV develop the acute stage of the
disease. Although this stage can last for between one to six months, acute infections are usually self-limiting
and the virus is effectively cleared by the immune system. In the majority of these cases, no treatment is
required other than symptomatic management. Most patients are asymptomatic at initial infection, leading to
unintentional transmission. Approximately 30% of infected individuals will develop symptoms while
approximately 1% of infected patients develop fulminant hepatitis (a severe form of hepatitis), which carries a
high risk of sudden liver failure and death. However, the most common symptoms of HBV infection include:
fatigue, anorexia, muscle or joint pain
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mild nausea and vomiting
fever (occasional and mild).
Acute viral hepatitis is characterized by increased serum transaminase (aminotransferase) activity. Recovery
from an acute hepatitis B infection is indicated when blood tests show that the virus has been cleared
(HBsAg negative) and the infected individual has developed protective surface antibodies.
Chronic infection
When the subject is unable to produce antibodies against the HBV virus, it results in chronic hepatitis. In a
few cases, the infected individual may not show any clinical or biochemical symptoms, while others may
encounter fatigue, anxiety, anorexia, and malaise. Chronic infection is primarily age dependent, with 90% of
the acute hepatitis infected children, aged below seven years, being exposed to a higher risk of developing
chronic infection, while only 10% of the infected adults develop chronic infection. All patients with chronic
hepatitis B infections need to be monitored regularly for early detection of disease progression, since they
are at increased risk for developing cirrhosis and/or hepatocellular carcinoma (liver cancer), with 20% of the
chronic hepatitis patients developing cirrhosis.
Hepatitis B, similar to hepatitis A, is also detected through serological tests. Hepatitis B virus consists of
three antigens for which the tests are performed, the surface antigen (HBsAg), the core antigen (HBcAg) and
the e antigen (HBeAg). HBsAg appears after around a month of acute exposure to HBV, prior to the onset of
the symptoms while the presence of virus for more than six months indicates chronic infection. The
individuals who recover from the infection develop antibodies to HBsAg (anti-HBs), which provide immunity
to the subsequent hepatitis B viral infection. HBsAg is a marker of infectious viral replication and indicates
the presence of viral replication. If the infection is characterized by a high rate of viral replication, hepatitis B
e Antigen (HBeAg) is also detectable while the presence of anti-HBe signifies an inactive state of the virus
and a lower risk of transmission. In a few infected individuals, the genetic material of the virus may undergo a
structural change referred to as pre-core mutation resulting in inability of the HBV to produce HBeAg, even
24
though the virus is actively reproducing. In these cases, no HBeAg is detected in the blood sample of
infected individuals while the HBV is still active and may infect others.
There is no specific treatment for acute hepatitis apart from symptomatic treatment depending upon the
visible symptoms. In rare cases, acute HBV infection leads to life-threatening liver failure for which liver
transplantation may be required.
There are seven FDA approved medications for chronic hepatitis B including two formulations of interferon
and five nucleoside/nucleotide analogues. Alpha-interferons were the first drugs approved in the US for the
treatment of chronic HBV. Interferon treatment can only be given in some cases, depending on the extent of
liver inflammation and disease. Interferons are administered parenterally (by injection) and may have side
effects but are not associated with specific drug-resistant mutations.
Nucleoside analogs are also used for the treatment of chronic HBV, examples include; lamivudine, adefovir
dipivoxil, entecavir, telbivudine and tenofovir. Lamivudine (Epivir HBV), approved in December 1998, was the
first nucleoside for chronic hepatitis B. The five viral specific treatments targeting the HBV polymerase are
Epivir, Hepsera, Tyzeka, Baraclude, and Viread.
In the case of HBV, prevention through vaccination is desirable. Prophylactic treatment for exposure to the
virus involves the hepatitis B immune globulin (HBIG), a HBV vaccine or a combination of both. HBIG
efficacy ranges from 70% to 95% for different types of exposure.
The first vaccine for HBV was approved in 1981 by the FDA, with Engerix B, produced by GSK and
Recombivax, produced by Merck being the leading brands. GSK also gained approval for Twinrix in May
2001, which is a combination vaccine for both HAV and HBV.
Epidemiology
According to the WHO, over two billion people worldwide have acquired HBV infection at some stage in their
life. Of these, approximately 350m people worldwide are chronically infected with the disease. Table 2
presents the segmentation of regions by occurrence of prevalence.
25
Table 2: Segmentation of regions by prevalence of hepatitis B
Prevalence Region
High (>8%) Africa
South-East Asia (including China, Korea,
Indonesia, Phillipines)
Middle East (except Israel)
South and Western Pacific Islands
Interior Amazon river basin
Central parts of Caribbean (Haiti & Dominican
Republic)
Intermediate (2%-7%) South central and Southwest Asia

Israel
Japan
Eastern & Southern Europe
Russia
Most areas surrounding the Amazon river
basin
Honduras
Guatemala
Low (<2%) Northern & western Europe

North America
Australia
New Zealand
Mexico
Southern South America
Source: CDC, 2007 BUSINESS INSIGHTS
The highest levels of HBV infection are found in Africa, China, South East Asia, the Middle-East (except
Israel), and the south and west Pacific islands, with more than 8% of the population being HBsAg-positive in
these regions. While the lowest levels of infection being found in Northern and Western Europe, North
26
America, Australia, New Zealand, Mexico, and South America with less than 2% of the population positive for
HBsAg. In the US, the rate of infection has fallen significantly which is mainly attributed to the changes in
lifestyle of high-risk groups and vaccination programs. In Asian countries including China, Korea, Japan, and
Taiwan, the transmission of disease is primarily materno-fetal, which results in a tendency to develop
immune tolerance with quiescent disease for many years. Thus, these countries have a lower percentage of
infected HBV patients with active disease suitable for treatment.
The prevalence of HBV infection differs between countries and age groups in Europe. The infection is
epidemic in Estonia and highly endemic in Turkey (8%) and Romania (6%). The HBV genotypes common in
Europe are A and D, with A being more prevalent in Northern Europe and D in Eastern Europe.
In Spain, the prevalence of the disease is low due to the improved vaccination program in the country. The
prevalence is particularly low in pregnant women (0.1%) as the vaccination rate is very high in this patient
population, with 16% of pregnant women having serological markers as compared to 8% in the general
population. HBV transmission in Spain is primarily a result of sexual transfer, intravenous drug use, and
parent to child transmission. The prevalence of HBV infection in Spain, is however high, in HIV co-infected
patients at 4.9%.
The prevalence of HBV across Europe also varies between different groups such as intravenous drug users
(IDU) who have a prevalence rate of 0-21% in Europe and that in sex workers vary between 6-7%.
Immigrants from high endemic region are 5-90 times more prone to develop HBV infection than the
aboriginals. The transmission of HBV is also dependant on the endemic condition of the region. For example
in high endemic countries, the transmission is via mother-to-child or through the oral fecal route. In low
endemic countries the transmission usually occurs via unsafe injection drug use, sexual contact, and body
piercing.
The implementation of national vaccination programs has reduced the rate of HBV transmission among
infants and adolescents, but the existence of a sizeable population with chronic infection, is expected to
persist for several generations.
27
Table 3 presents the prevalence data of hepatitis B infection by country.
Table 3: Prevalence of hepatitis B by country
SN Country Year Prevalence (%) Reference

1 China 2009 7.20% Xiaofeng Liang et al., Epidemiological
serosurvey of hepatitis B in China-Declining
HBV prevalence due to hepatitis B vaccination,
Vaccine, 2009.
2 Australia 2004 0.5-0.8% Van TT Nguyen et al, B Positive-all you wanted
to know about hepatitis B: A guide for primary
care providers, The University of New South
Wales, 2004
3 India 2006 5% Colin W. Shepard et al., Hepatitis B virus
infection: Epidemiology and Vaccination,
Epidemiologic Reviews, 2006.
4 US 2009 0.40% W. Ray Kim, Epidemiology of hepatitis B in the
United States, Hepatology, 2009.
5 UK 2007 0.25% Stella Pendleton et al., Rising curve: chronic
hepatitis B infection in the UK, Hepatitis B
Foundation UK, 2007.
6 Italy 2008 1.00% Jules L. Dienstag, Hepatitis B Virus infection,
The New England Journal of Medicine, 2008
7 Spain 2008 0.70% Hepatitis B and C in the EU neighborhood:
prevalence, burden of disease and screening
policies, European Center for Disease
Prevention and Control, 2010.
8 France 2005 0.68% Alimentary Pharmacology & Therapeutics. 2007.
9 Germany 2005 0.5-1.5% Merja Rantala et al., Surveillance and
Epidemiology of hepatitis B and C in Europe-A
review, Eurosurveillance, 2008.
Source: Various BUSINESS INSIGHTS
28
Forecast epidemiology
Table 4 presents the forecast prevalence data of hepatitis B in various countries to 2016.
Table 4: Forecast epidemiology of chronic hepatitis B to 2016
Country 2010 2011 2012 2013 2014 2015 2016

China
Prevalence (m) 89 78 72 63 57 50 48
Prevalence (%) 6.7 5.8 5.4 4.7 4.2 3.7 3.5
Australia
Prevalence ('000s) 179 176 172 169 166 163 161
Prevalence (%) 0.8 0.8 0.8 0.8 0.7 0.7 0.7
India
Prevalence (m) 64 66 67 69 69 70 71
Prevalence (%) 5.5 5.6 5.6 5.6 5.6 5.6 5.6
US
Prevalence ('000s) 1,228 1,230 1,230 1,231 1,233 1,234 1,235
Prevalence (%) 0.40 0.40 0.39 0.39 0.39 0.38 0.38
UK
Prevalence ('000s) 143 140 138 135 133 131 128
Prevalence (%) 0.23 0.22 0.22 0.21 0.21 0.20 0.20
Italy
Prevalence ('000s) 589 581 574 567 560 555 558
Prevalence (%) 0.97 0.95 0.94 0.92 0.91 0.90 0.90
Spain
Prevalence ('000s) 316 311 304 303 300 297 291
Prevalence (%) 0.7 0.7 0.6 0.6 0.6 0.6 0.6
France
Prevalence ('000s) 597 611 634 666 690 705 732
Prevalence (%) 0.9 0.9 1.0 1.0 1.0 1.1 1.1
Germany
Prevalence ('000s) 751 747 733 718 691 663 645
Prevalence (%) 0.9 0.9 0.9 0.9 0.9 0.8 0.8
Source: Business Insights, Various BUSINESS INSIGHTS
29
Hepatitis C
Overview
Hepatitis C is caused by infection with the hepatitis C virus (HCV), a small RNA virus classed as a member
of the Flaviviridae family of viruses. There are eleven major genotypes of the virus designated as 1-11, which
are further divided into numerous different subtypes designated as a, b, c etc., and about 100 different
strains numbered as 1,2,3 etc. The distribution of genotypes differs across geographies and each genotype
can influence the severity of the disease and response rates to treatment regimens.
The virus replicates in the liver and is transmitted through bodily fluid, predominantly via contact with blood,
however, the infection may spread through sexual transmission and horizontal or vertical transmission
routes. Horizontal transmission refers to transmission of virus amongst individuals of the same generation,
while vertical transmission refers to mothers-to-child transmission. Until the discovery and characterization of
HCV, blood transfusions were the main route of HCV transmission. Anti-HCV screening tests were
introduced across most of the developed countries in 1991 to prevent transmission through blood
transfusions. Despite this, there is always a large patient population unaware of their being infected, primarily
because acute infection is predominantly asymptomatic. Intravenous drug users are at greatest risk of
acquiring HCV infection as they can contract the disease through sharing needles. The progression of the
disease in this particular risk group may be accelerated due to high levels of co-infection with HIV and HBV,
which share transmission routes with HCV.
Acute HCV infection
The incubation period of HCV infection, prior to clinical symptoms, ranges from 25 to 75 days. While the
majority of infected individuals including those that become chronic, are asymptomatic, symptoms such as
fatigue, nausea, fever, and jaundice are sometimes apparent during acute infections.
Chronic HCV infection
In approximately 80% of the infected population, HCV is not cleared within six months of acquiring the
infection, leading to the chronic stage. Patients with chronic infection may also remain asymptomatic,
however many chronically infected individuals go on to exhibit the following symptoms:
30
cirrhosis of the liver, which develops in about 10–20% of infected individuals
liver failure which develops in about 20–25% of cirrhotic individuals
liver cancer, which develops in 1-5% of persons with chronic infection over a 20-30 year period. Most of
the cases associated with liver cancer can be linked to either hepatitis B or C.
Disease progression is accelerated by other factors, including, preexisting HBV and alcohol consumption.
Co-infected (infection with more than one disease) individuals have higher risks of developing liver cancer
and other associated liver diseases. Concurrent illness with chronic hepatitis C and HIV infection may
accelerate the course of HCV disease.
The diagnosis of chronic HCV is made by serological testing and liver biopsy. A positive test result for anti-
HCV antibodies and/or HCV RNA or HCV core antigen in the blood confirms the infection. Anti-HCV
antibodies are non-detectable until 12-27 weeks after exposure while HCV RNA, detected by polymerase
chain reaction (PCR) or HCV core antigen detection, can be detected within a few days of inoculation.
ELISA/EIA is a commonly used test for detecting the presence of HCV antibodies. A liver biopsy is primarily
performed after confirming the infection through diagnosis, to assess the degree of liver inflammation and
fibrosis and to detect the presence of cirrhosis.
In cases of mild hepatitis C, the only treatment needed is a balanced nutritious diet, reduced alcohol
consumption, exercise and regular visits to the doctor to monitor the disease. While for chronic cases, drug
therapy is appropriate.
As with HBV, interferons are used for the treatment of HCV, which can be prescribed as a monotherapy in
the form of injections, or in combination with ribavirin, which comes in the form of a capsule. Interferon works
by bolstering the immune system against the virus, and ribavirin works by preventing the virus from
reproducing. In addition, pegylated interferon can be given to patients who have never previously been
treated for HCV. Ribavirin can also be given in conjunction with pegylated interferon – a combination that
studies have shown to be more effective than interferon alone. As there is a large patient population on
31
which the current treatment has been unsuccessful, new agents are under development to offer new
mechanisms to treat HCV infections.
There is no vaccine for HCV. The vaccines for hepatitis A and B are recommended for HCV-positive
individuals, particularly the hepatitis A vaccine. Infection with hepatitis A virus may turn life threatening for an
individual infected with HCV.
Epidemiology
HCV infection is a major cause of acute hepatitis and chronic liver disease. According to the WHO, over
170m people worldwide, are chronically infected with HCV, with 3-4m new infections occurring each year.
Over 9,000 deaths are attributed to HCV annually in the US and taking into account the presently infected
US population, the death rate is expected to grow many folds in the next 15-20 years. While, the prevalence
of HCV infection is difficult to assess due to the asymptomatic nature of the disease, introduction of
mandatory blood screening has resulted in a reduction in HCV cases.
The prevalence of hepatitis varies across regions, with developed and industrialized nations such as the US
and Western Europe having low prevalence rates and Africa, and a few countries in Asia having high
prevalence. In common with HBV, HCV is transmitted in a number of different ways. In the developed
economies where prevalence is relatively low the majority of HCV patients are infected via the sharing of
needles for intravenous drug use, tattooing, and piercing. In the emerging markets where HCV is endemic
transmission routes include those mentioned above, but other routes include mother to baby transmission
and unsafe medical procedures.
In the US 1.6-1.8% of people carry HCV and 75% of these patients do not know that they are carriers.
Nature reports that the young adults and teenagers are particularly a risk group for HCV infection.
Similar to the other parts of the world, geographic distribution of HCV infection varies widely in Europe. The
initial spread of the disease in the region is attributed to unsafe intravenous drug use, surgical intervention,
and blood transfusion. In Northern Europe, the infection was primarily spread by intravenous drug users and
the prevalence was found to be 0.1% to 1%, being most common in adults of the age group 30-50 years. In
32
Central Europe the prevalence ranges from 0.2% (Netherlands) to 1.2% (France). In Southern Europe, the
prevalence is found to be higher ranging from 2.5% to 3.5%.
Latin America has a low prevalence rate of HCV infection, however this may change with different countries
and also within a country. The overall prevalence of the infection is 1.23% in Latin America. South-east Brazil
has a prevalence of 0.8% to 2.8% and the north-east has a prevalence of 1.7% to 3.4%.
The highest prevalence of HCV infection globally is found in Africa with an overall prevalence of 5.3%. Egypt
has the world's highest HCV prevalence rate with 14.7% of the population affected with 9.8% of them
chronically infected.
33
Table 5 presents the prevalence data of hepatitis C infection by country.
Table 5: Prevalence of hepatitis C infection by country
SN Country Year Prevalence (%) Reference

1 Germany 2005 0.60% Colin W Shepard et al., Global Epidemiology of
hepatitis C virus infection, Lancet Infectious
disease, 2005.
2 Canada 2005 0.80%
3 France 2005 1.10%
4 Australia 2005 1.10%
5 US 2005 1.80%
6 Japan 2005 1.5-2.3%
7 China 2005 3.20%
8 India 2005 0.90%
9 Egypt 2009 14.70% F. DeWolfe Miller et al., Evidence of intense
ongoing endemic transmission of hepatitis C virus
in Egypt, Proceedings of the National Academy of
Sciences of the United States of America, 2010.
10 Italy 2008 2.60% Fabris Paolo MD et al., Changing Epidemiology of
HCV and HBV infections in Northern Italy: A
Survey in the General Population
11 Brazil 2010 1.20% Nahum Mendez-Sanchez et al., Epidemiology of
HCV infection in Latin America, Annals 0f
Hepatology, 2010.
12 UK 2008 0.20% Juan I. Esteban et al., The changing epidemiology
of hepatitis C infection in Europe, Journal of
Hepatology, 2008.
Note: SN 1-8 is sourced from same article.
Source: Various BUSINESS INSIGHTS
34
Forecast epidemiology
Table 6 presents the forecast prevalence data of hepatitis C in the 7MM to 2016.
Table 6: Forecast epidemiology of hepatitis C in the 7MM to 2016
Country 2010 2011 2012 2013 2014 2015 2016

France
Prevalence (%) 1.5 1.6 1.7 1.8 1.8 1.8 1.9
Prevalence ('000s) 997 1,068 1,100 1,152 1,179 1,210 1,265
Germany
Prevalence (%) 1.0 1.1 1.1 1.3 1.4 1.6 1.7
Prevalence ('000s) 805 876 931 1025 1,163 1,259 1,372
Italy
Prevalence (%) 2.8 2.9 2.9 3.1 3.1 3.2 3.5
Prevalence ('000s) 1684 1745 1805 1889 1936 1997 2,170
Japan
Prevalence (%) 2.3 2.4 2.5 2.6 2.7 2.8 2.9
Prevalence ('000s) 2,921 3,059 3,189 3333 3415 3506 3,674
UK
Prevalence (%) 0.4 0.5 0.5 0.6 0.7 0.8 0.9
Prevalence ('000s) 256 295 326 379 420 510 580
US
Prevalence (%) 2.3 2.3 2.4 2.5 2.5 2.6 2.6
Prevalence ('000s) 6,984 7,218 7,562 7,801 8,100 8,299 8,456
Source: Business Insights, Various BUSINESS INSIGHTS
35
Hepatitis D
Overview
Hepatitis D or delta hepatitis is caused by the hepatitis delta virus (HDV) which is unable to replicate on its
own and requires a hepadnavirus such as HBV for replication. HDV is transmitted predominantly via contact
with blood or blood products, with peak infectivity at the onset of the acute Phase of HDV infection. Co-
infections of HBV and HDV are usually self-limiting and may result in both acute hepatitis B and acute
hepatitis D. The co-infected patients rarely (<5%) progress to chronic hepatitis D, however, HDV infection of
a chronic HBV carrier, may lead to chronic hepatitis D. HDV can be classified into three genotypes, I, II, and
III, while the genotype I is predominant across the globe, genotypes II and III are prevalent in a few
geographies including Venezuela and Peru.
The diagnosis of HDV is made by conducting serological tests with the appearance of HBsAg, HBeAg, HBV
DNA, IgM anti-HD in serum confirming the infection in individuals infected with acute hepatitis D. In acute
hepatitis D condition, markers of HDV infection disappears within few months after recovery while in chronic
conditions HDV RNA, HDAg, and IgM antibodies persists.
Presently, there is no effective antiviral treatment for acute and chronic hepatitis D. The administration of
interferon have resulted in improving the disease conditions, however most of the infected individuals
remained positive for HDV RNA.
There is no vaccine for hepatitis D, however, HBV vaccine against non-chronic HBV carriers is
recommended to provide protection against HDV infection.
Hepatitis E
Overview
Hepatitis E is caused by infection with the hepatitis E virus (HEV), which is a non-enveloped, spherical,
positive-stranded RNA virus and is presently unclassified. HEV is a waterborne disease and is transmitted
via the fecal-oral route spreading from person to person. The common symptoms of HEV infection include
jaundice, anorexia, hepatomegaly, abdominal pain, fatigue, nausea, and fever. Hepatitis E is primarily a self-
36
limiting infection, predominantly affecting young to middle-age adults (15-40 years), with mild to moderate
severity levels. However, occasionally it may lead to fulminant hepatitis which has a mortality rate of 0.5% to
4.0% of the infected population with a higher mortality rate in pregnant women. Unlike other hepatitis viruses,
HEV has a restricted distribution, with a higher prevalence rate of hepatitis E in Central and South-East Asia,
North and West Africa, and Mexico in areas with high fecal contamination of drinking water.
The diagnosis of HEV is made by biochemical assessment of liver function, as the virus is clinically
indistinguishable from other types of acute viral hepatitis. The presence of IgM anti-HEV confirms the acute
hepatitis E infection. In approximately 50% of infected individuals, HEV RNA may be detected in feces,
during the acute infections, by polymerase chain reaction (PCR). While antibodies to HEV (IgM and IgG)
develop at the occurrence of symptoms, mostly before the development of jaundice, IgM anti-HEV precedes
the IgG anti-HEV by a few days. IgG anti-HEV persists for long periods and provides protection against
subsequent infections.
Although there is no specific treatment or vaccine for acute hepatitis E, prevention is considered to be the
most effective approach to alter the course of the disease. While usually HEV does not lead to chronic
hepatitis, infected patients are required to be watchful to avoid fulminant hepatitis particularly in pregnant
women. Preventive measures to control HEV include maintaining good personal hygiene, high quality
standards of public water supplies and appropriate disposal of sanitary waste.
37
Chapter 2 Global market analysis
Summary
The global hepatitis market was valued at $6.5bn in 2010, an increase of 1.2% over 2009..
Collectively, the leading seven hepatitis markets representing 67.9% of sales exhibited Y-o-Y growth of
22.4% to reach $4.3bn in 2010. In terms of size, the 5EU dominated the global hepatitis market with a
market share of 27.4%.
Although, most of the hepatitis infected population is in underdeveloped or developing countries, the
market share of these countries in the global hepatitis market is relatively lower, due to the limited
access to healthcare facilities resulting in a significant un-diagnosed and un-treated population.
Viral hepatitis products with sales of $2.7bn and a Y-o-Y growth of 17.2% were the leading drug class
for hepatitis treatment. The interferon drug class was the next largest class with a market share of
39.8% in 2010.
The top 10 brands in the global hepatitis market generated combined sales of $6.4bn accounting for
98.5% of the market in 2010. Roche’s Pegasys was the best selling brand in the market with a market
share of 24.3% in 2010.
The launch of two new products indicated for the treatment of hepatitis C, belonging to the protease
inhibitor (PI) drug class (Incivek and Victrelis), is anticipated to change the treatment modality. The
drugs are estimated to rapidly reach their peak sales by 2012-13 due to their superior therapeutic
profile compared to the currently marketed products.
The market for biosimilars for the treatment of hepatitis was valued at $12m in 2010. Scrip Business
Insights however, forecasts the biosimilars market to grow at a CAGR of 75.5% in 2010–16.
38
Introduction
The global hepatitis market is characterized by a large number of licensing deals, mergers, and acquisitions.
Although six types of hepatitis virus have now been identified, hepatitis A, B, and C are the most common
infections prevalent across the globe. Worldwide, untreated chronic HBV and HCV infected cases are
becoming a major cause of liver disease while HAV infection predominantly causes acute infections. The
hepatitis market has evolved following the introduction of hepatitis vaccines in to national immunization
schedules for infants and mandatory blood screening which has resulted in the increased diagnosis of the
disease.
This chapter of the report will provide an analysis of the current market dynamics of the global hepatitis
market. The analysis concentrates on reviewing the performance of major drug classes and the major
products in each drug class. The analysis further captures the impact of recent events and provides
forecasts over the period 2010–16. The most significant products in the global hepatitis market are also
profiled.
39
Market analysis by country
The global hepatitis market was valued at $6.5bn in 2010 with an increase of 22.3% over 2009 at a
compound annual growth rate (CAGR) of 13.3% during 2006–10. Table 7 presents the segmentation of
hepatitis market ($m) by region.
Table 7: Global hepatitis market by region ($m), 2010
Geography Sales 2010 ($m) Growth 2009–10 Market share CAGR 2006–10
(%) 2010 (%) (%)
5EU 1,774 15.6 27.4 7.8
US 1,695 13.6 26.1 4.9
Japan 869 67.9 13.4 43.4
Total 4,339 22.4 66.9 10.5
ROW 2,147 22.3 33.1 20.5
Grand Total 6,486 22.3 100.0 13.3
Source: Business Insights, PharmaVitae BUSINESS INSIGHTS
The geographic distribution of sales in the hepatitis market is largely along the lines of the overall
pharmaceutical market, with the US, Japan and 5 EU (France, Germany, Italy, Spain, and UK) featuring
prominently among the leading global hepatitis markets. Collectively, the leading seven hepatitis markets
representing 67% of sales had Y-o-Y growth of 22.4% to reach $4.3bn in 2010. In terms of size, the EU5
lead the global hepatitis market with a market share of 27.4% closely followed by the US with a market share
of 26.1% in 2010. Although, most of the hepatitis infected population is in underdeveloped or developing
countries, the market share of these countries is much lower, due to the limited access to healthcare facilities
resulting in both a significant undiagnosed population and many of the patients that have been diagnosed
being unable to get access to medication.
40
Market analysis by drug class
Anti-viral drugs was the largest drug class indicated for the treatment of hepatitis. The drug class was valued
at $2.9bn in 2010 with Y–o–Y of 15%. The interferons used in the treatment of hepatitis were the next largest
drug class with 2010 sales of $2.6bn. This drug class had significant Y–o–Y growth of 40.3% in 2009–10.
Table 8 presents the global hepatitis market by drug class ($m), 2010.
Table 8: Hepatitis market by drug class ($m), 2010
Drug class Sales 2010 ($m) Sales growth Market share CAGR 2006-10
2009-10 (%) 2010 (%) (%)
Anti-viral drugs 2,752 17.2 42.4 17.1
Interferons 2,583 40.3 39.8 14.9
Vaccines 1,152 3.4 17.8 3.9
Total 6,486 22.3 100.0 13.3
41
Leading brand dynamics
The ten leading brands in the global hepatitis market generated sales of $6.4bn accounting for 98.5% of the
market in 2010. Pegasys from Roche was the largest brand in the market with 24.3% of sales followed by
GSK’s hepatitis vaccine portfolio and BMS’ Baraclude with market shares of 17.1% and 14.4% respectively,
in 2010. Table 9 details the leading brands in the global hepatitis market ($m), 2010.
Table 9: Leading brands in the global hepatitis market ($m), 2010
Products Sales 2010 ($m) Growth 2009–10 Market share CAGR 2010–16
(%) 2010(%) (%)
Pegasys 1,577 -0.6 24.3 2.9
Hepatitis 1,112 8.3 17.1 10.7
Vaccines (GSK)
Baraclude 931 26.8 14.4 83.0
Peg Intron 737 -13.5 11.4 -3.1
Viread 732 9.6 11.3 1.5
Zeffix 360 7.4 5.5 9.5
Copegus 308 1.3 4.7 9.9
Rebetol 220 -11.3 3.4 -8.3
Intron A 209 -9.5 3.2 -3.1
Hepsera 201 -26.0 3.1 -3.4
Top 10 total 6,387 2.1 98.5 6.3
Others 99 -35.1 1.5 173.8
Grand total 6,486 1.2 100.0 5.1
Pegasys (peginterferon alfa-2a) – Roche

Pegasys is an interferon that has been pegylated (a process, in which polyethylene glycol (PEG) molecules
are attached to synthetic interferon). Pegylation helps to increase the half life of the interferon and allows
less frequent dosing of the drug, allowing Pegasys to be given once in a week, and makes it more effective
against HCV than a non-pegylated interferon. Pegasys was launched across the EU in 2002 for the
treatment of chronic HCV infection. Pegasys was subsequently approved for the treatment of HBV in
42
Switzerland in December 2004, followed by the EU in February 2005 and the US in May 2005. By 2006,
Pegasys had been approved for over six indications including hepatitis B infection and HCV/HIV co-infection.
Pegasys in combination with Copegus (ribavirin) is the first regimen approved by the FDA for the treatment
of chronic HCV in patients co-infected with HIV. Pegasys is the only pegylated interferon product currently
approved in the US; in the EU it competes with PegIntron (Merck & Co). While Pegasys is available for
Hepatitis C treatment in Japan it has not been approved for the treatment of Hepatitis B, however it was filed
for HBV in 2011.
In 2010, Pegasys generated sales of $1.6bn which was a Y-o-Y decline in sales of 0.6% compared to 2009.
Roche attributed this decline in sales to the decrease in revenue from major markets such as US, EU and
Japan. However, growth in the emerging markets helped to reduce the impact of this. The success of
Pegasys can be attributed to its ready-to-administer solution, fixed dosing regimen as opposed to
PegIntron’s weight-based dosing, the finite duration of the therapy and the low risk of resistance
development. Pegasys is given as a fixed dose of 180mcg, while PegIntron is weight-based, dosed at
1.5mg/kg/week. The sales of Pegasys peaked after November 2008, when the European Medicines
Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) approved the administration of
Pegasys and ribavirin in patients who had failed interferon alpha/ribavirin combination therapy.
Hepatitis Vaccines – GSK

GSK markets five vaccines for the prevention of hepatitis. These are- Twinrix, Engerix-B, Havrix, Ambirix,
and Hepatyrix. The vaccines together accounted for sales of $1.1bn in 2010 at a Y–o–Y of 8.3%. The sales
of the vaccines by revenue may decrease though uptake by volume will increase due to the supply of
vaccines at low cost to the WHO. Two key vaccines in GSK’s portfolio for hepatitis are profiled below.
Engerix B
Engerix-B, a hepatitis B vaccine, was first launched in France in 1995 and is now available in multiple
markets, including the US and the other major European markets. Engerix-B is indicated for immunization
against all serotypes of hepatitis B and the product label also states that since hepatitis D only occurs in the
presence of hepatitis B, Engerix-B can also prevent infection with this virus. Engerix-B is a non-infectious
43
recombinant DNA vaccine that contains purified HBV surface antigen, obtained from genetically modified
Saccharomyces cerevisiae. The product-purified antigen is formulated as a suspension adsorbed onto
aluminum hydroxide, and supplied in vials and prefilled Tip-Lok syringes. The pediatric vaccine is available in
a thimerosal-free formulation to counter concerns about the use of this preservative in young children.
Twinrix
Twinrix, the world's only combination hepatitis A and B vaccine for use in adults aged over 18 years was
launched in the UK, in January 1997. By the end of 1999, Twinrix was launched in over 30 countries in both
adult and pediatric formulations that differ in antigen and adjuvant concentration. Twinrix, approved in 2001
by the FDA, is primarily a combination of GSK’s then existing vaccines, Havrix and Engerix B, for Hepatitis A
and Hepatitis B respectively. Twinrix’s scope was predominantly limited to the travel vaccine market targeting
individuals traveling to hepatitis A endemic regions. Hepatitis A is not a key priority for most Western
governments, as the infection is associated with poor hygiene and unclean water supplies and thus is more
prevalent in the developing world. However, in certain regions of the US, hepatitis A is problematic and
vaccination is recommended as part of the pediatric schedule.
Twinrix is a combined vaccine, formulated by pooling bulk preparations of the purified, inactivated hepatitis A
virus (HAV) and purified hepatitis B surface antigen (HBsAg), separately adsorbed onto aluminum hydroxide
and aluminum phosphate. The HAV is propagated in MRC5 human diploid cells, whereas HBsAg is
produced in cultures of genetically engineered yeast cells. The HBV component of the vaccine shares the
same manufacturing process as Engerix-B, thereby precluding its use in patients demonstrating serious
yeast sensitivity. The vaccine was approved for adults aged over 18 years with a 0, 1, and 6 month dosing
schedule. However in 2007, the FDA approved an accelerated dosing schedule of Twinrix consisting of three
doses to be administered within three weeks followed by a booster dose at 12 months. The accelerated
dosing schedule enabled GSK to target individuals traveling to regions considered endemic for hepatitis A
and hepatitis B, such as Africa, Asia, South America, and parts of the Caribbean.
44
Baraclude (entecavir) – BMS
Baraclude is an antiviral reverse transcriptase inhibitor launched specifically for the treatment of chronic
hepatitis B. Baraclude was approved by the FDA in 2005 for chronic hepatitis B infection in adults with
evidence of active viral replication, persistent elevations in serum aminotransferases (ALT or AST), and
historically active disease. Presently, approved in over 86 countries worldwide, Baraclude was approved in
the EU and Japan in 2006. The drug is claimed to be highly efficacious, safe, and suitable for patients with
baseline hepatitis B DNA levels, as it significantly reduces the viral load as compared to lamivudine and has
minimal resistance (<1%) after therapy. However, Baraclude has shown resistance in lamivudine-refractory
patients with 42% of lamivudine-refractory patients experiencing virologic breakthrough after four years on
Baraclude therapy.
Baraclude is available as an oral tablet and an oral solution with a recommended dose of 0.5 mg daily on an
empty stomach for adults. The recommended dose may be increased to 1mg once daily for patients with a
history of hepatitis B viremia receiving lamivudine or with known lamivudine resistance mutations. With an
aim to establish a preferred first as well as second-line therapy for chronic hepatitis B infections and expand
the consumer base, BMS is evaluating combination therapies of Baraclude with Zeffix, Hepsera, and
tenofovir.
Baraclude’s efficacy has not been evaluated in HIV/HBV co-infected patients, however, limited clinical
experience suggests there is a potential for the development of resistance to HIV nucleoside reverse
transcriptase inhibitors if Baraclude is used to treat chronic hepatitis B virus infection in patients with HIV
infection that is not being treated. Therefore, HIV antibody testing is advised to all patients before initiating
Baraclude therapy.
Presently, it is one of only two products (the other being Viread) recommended for first-line HBV therapy by
the American Association of the Study of Liver Disease (AASLD) and the European Association of the Study
of the Liver (EASL) and has subsequently taken significant market share from other antivirals such as Zeffix
and Hepsera. With a CAGR of 83.0% during 2006–10, Baraclude generated sales of $931m, with a Y-o-Y
45
growth of 26.8% in 2009–10. Baraclude is expected to lose its market share to generic drugs, after its patent
expiry in 2013.
PegIntron (peginterferon alfa-2b) – Merck

PegIntron is indicated for the long term treatment of Hepatitis C in patients aged three years and above. The
active substance in the drug is peginterferon alpha-2b and is available as a powder and solvent that is made
up into a solution for injection, and as a single-use prefilled pen. In adults, PegIntron is administered to
treatment naïve and treatment refractory patients. PegIntron combination therapy with ribavirin was approved
for re-treatment of HCV patients in Europe and the US, and is the first pegylated interferon combination
therapy to be approved for the re-treatment of chronic hepatitis C by the EMA and the FDA. In children and
adolescents, it is used in combination with ribavirin to treat infected patients who have not been treated
before.
In 2010, the sales of PegIntron reached $737m. In 2009, PegIntron in combination with ribavirin was
approved in India for re-treating, treatment-experienced patients. The approval is expected to increase sales
of the product in India as a significant proportion of the hepatitis-C population in India is made up of non-
responders and re-lapsers.
Viread (tenofovir disoproxil fumarate) – Gilead Sciences

Viread, a nucleotide analogue, was initially approved for the treatment of HIV in 2001. Later in 2008, it was
also approved for the treatment of chronic hepatitis B in the US and EU5 markets. Viread interferes with the
HBV DNA polymerase, an enzyme essential for the HBV’s reproduction. It lowers the virus multiplication and
restricts its activity to infect new liver cells. In clinical studies comparing Viread and Hepsera, Viread had
superior efficacy with a significant patient population achieving undetectable serum hepatitis B virus DNA
assay in the Viread arm. Moreover, none of the patients developed resistance to Viread in 144 weeks of
studies (Study 102 and 103).
In 2010, Viread generated sales of $732m, at a Y-o-Y growth of 9.6%. Viread is presently approved in the
US, EU, China and India, in addition to ther countries such as Turkey, Australia, New Zealand, and Canada
for HBV treatment. Moreover, in 2009, Gilead collaborated with GSK to commercialize Viread in Asian
46
markets including China, Hong Kong, Singapore, South Korea and Taiwan. The two companies are working
on expanding the agreement to other regions in Asia incluing Japan. While Gilead retained the exclusive
rights for commercialization of Viread for HBV in Hong Kong, Singapore, South Korea, and Taiwan, GSK has
the exclusive commercialization rights in China.
Copegus (ribavirin) – Roche

Copegus, Roche’s branded ribavirin, is a nucleoside analogue which has antiviral activity. Although Copegus
cannot be used as a monotherapy against hepatitis C virus, studies show that it helps alpha interferons such
as Pegasys work better. In 2003, Roche introduced Copegus in combination with Pegasys in six European
markets including Austria, Germany, the Netherlands, Finland, Iceland, and the UK. Copegus was launched
at a 16% discount to Rebetol in the UK. However, after the entry of the other generic players Copegus also
started to lose its market share particularly in the US market. In 2007, the combination of Copegus plus
Pegasys was approved in Japan, for the treatment of chronic hepatitis C for patients in serogroup 1
(genotype 1a or 1b with a high HCV-RNA viral load) and non-responders or relapsers to interferon
monotherapy. In 2010, with Y-o-Y growth of 1.3% Copegus generated sales of $308m.
Rebetol (ribavirin) – Merck

Rebetol is a nucleoside analogue used for the treatment of chronic hepatitis C for patients aged three years
or older with liver disease. It was approved in 1999 in the EU5; while in the US and Japan it was approved in
2001. Monotherapy of Rebetol is not effective for the treatment of chronic hepatitis C, thus it is used in
combination with interferon alpha-2b (pegylated and nonpegylated). Rebetol is administered according to
body weight and is not recommended for patients experiencing adverse reactions or renal dysfunction.
Further more monotherapy of Rebetol is also associated with various side effects including hemolytic
anemia. The recommended dose of PegIntron is 1.5mcg/kg/week administered subcutaneously, in
combination with 800 to 1,400mg Rebetol capsules depending on the patient’s body weight.
In 2007, the European Commission approved the combination therapy of PegIntron and Rebetol for the
treatment of previously untreated adult patients with chronic hepatitis C co-infected with clinically stable HIV,
47
and for unsuccessfully treated patients. Until then the treatment was only administered to patients suffering
with chronic hepatitis C.
Rebetol contributed 3.3% to the sales of global hepatitis market in 2010. Ribavirin was marketed as a
branded product by Merck’s Schering-Plough as Rebetol until 2003 but after it became generic, Roche
began manufacturing the drug under the brand name Copegus, only for use with Pegasys. Rebetol lost some
market share to Copegus as it was launched at a lower price in most markets. Moreover, the competition
further intensified after the entry of other generic players such as Zydus, Three Rivers, and Novartis.
Hepsera (adefovir dipivoxil) – Gilead

Hepsera, a diester prodrug of adefovir, is the first nucleotide analogue approved for the treatment of chronic
hepatitis B. Hepsera is an acyclic nucleotide analog of adenosine monophosphate which is phosphorylated
to the active metabolite adefovir diphosphate by cellular kinases. Adefovir diphosphate inhibits HBV DNA
polymerase (reverse transcriptase) by competing with the natural substrate deoxyadenosine triphosphate
and by causing DNA chain termination after its incorporation into viral DNA.
Hepsera was approved in 2002 in the US and captured a high market share immediately following its launch.
Hepsera's superior resistance profile and efficacy in lamivudine-resistant patients were the key drivers of its
growth. In the US, Hepsera is approved for the treatment of chronic hepatitis B in adults with active viral
replication and persistent elevations in serum aminotransferases (ALT or AST) or histologically active
disease. In the EU, it is approved for the treatment of chronic hepatitis B in adults with compensated liver
disease with active viral replication, elevated serum alanine aminotranseferase levels and histological
evidence of active liver inflammation and fibrosis; or decompensated liver disease.
In April 2002, Gilead entered into a licensing agreement with GSK to commercialize Hepsera in Asia, Latin
America, and other territories. Presently, Hepsera is available in the US, 13 countries in Europe, and in five
Asian markets, including Hong Kong and Singapore. However, further studies suggested that around 30% of
patients go on to develop resistance to Hepsera after five years of treatment. In 2010, Hepsera generated
2010 sales of $201m, which was a year on year decline of 26% over 2009. The decline in sales was primarily
due to the cannibalization of its sales by Gilead’s other brand Viread, which was launched for hepatitis B in
48
August 2008. Although, structurally Viread is similar to Hepsera it is not associated with nephrotoxicity risk
and the lower price of Viread as compared to Hepsera is shifting physicians to prescribe Viread instead of
Hepsera. Sales of Hepsera are expected to further decline after its patent expiry in 2014.
A new era of treatment for Hepatitis C virus infection

Introduction
The launch of Vertex’s Incivek (telaprevir) and Merck & Co.’s Victrelis (boceprevir) in 2011 has reinvigorated
the HCV treatment market after a decade of few new products. In the last ten years, the gold standard of
therapy has been the combination of interferon (pegylated) and ribavirin. However, a huge treatment gap
remained with the use of these drugs in terms of the need for improved efficacy and safety. Telaprevir and
boceprivir were both granted US marketing approved in May 2011, with Merck’s Victrelis gaining approval
first. Figure 1 illustrates the evolution of HCV infection treatment modality.
Figure 1: Evolution of HCV treatment modalities
Launch of DAA to be
IFN/PEG-IFN +RBV
used w/o IFN/RBV?
1990 1995 2000 2005 2010 2015 2020
First DAA Second generation

IFN IFN+RBV
launched DAA to be launched
Note: IFN=interferon; PEG-IFN= pegylated interferon; RBV= Ribavirin;

DAA=direct acting anti-virals; w/o=without
Source: Business Insights BUSINESS INSIGHTS
49
Protease inhibitors (PIs)
The protease inhibitors have an intermediate barrier to resistance and are genotype specific. The two
recently approved PIs are Vertex’s telaprevir and Merck’s boceprevir. The two drugs are peptidomimetic
inhibitors of NS 3/4A protease. This protease activity is essential for the replication of HCV.
The other PIs are either in early Phase III development stage or in the Phase II. The products are likely to be
launched by 2014, which leaves the recently approved products in the large market for competition.
The two primary advantages with the use of PIs as demonstrated by the clinical trials have been an elevation
in the SVR cure rates from 34-44% in interferon and ribavirin treated patients to 66-79% in patients with triple
combination therapy (PI + ribavirin +PEG-interferon). Another advantage has been the reduction in the
treatment time which has its benefit in reducing the exposure time of the patient to adverse effects.
However, most of these PIs are active against selected genotypes, usually type 1. Thus the development of
PIs indicated for pan-genotypes will be a key advancement in HCV therapy. In line with this, a number of PI
targets in early Phase development are being studied for safety and efficacy. Merck’s MK-5172 and
Achillion’s ACH2684 are pan-genotype drugs.
Incivek (telaprevir) - Vertex
Vertex has developed Incivek as an oral dose formulation for the treatment of HCV infection. The company
has partnered with J&J for the product’s commercialization outside the US and with Mitsubishi Tanabe in
Japan. The study results of the drug have been impressive with its use certified in treatment naïve and
inadequate treatment response patients.
In Phase III clinical trials, patients were treated with 12 weeks of telaprevir and 24 weeks of standard
treatment. The trial data suggested a 61% achievement of sustained viral response (SVR), which was much
closer to that achieved by the standard treatment of care which reported a 67% reduction in 48 weeks. The
trial also suggested that the use of telaprevir can reduce the duration of treatment for the patients. The most
common side effect that was more frequent with the use of telaprevir were rashes.
50
The molecule was studied in three trials; PROVE-1 (US), PROVE-2 (European) and PROVE-3. The PROVE-
3 trials assessed the efficacy of telaprevir in patients with inadequate response to the standard care, with the
results being positive and in favor of telaprevir.
PROVE-3 studied two different dosing arms in the telaprevir group with one in the ribavirin sparing arm for 24
weeks. This was tested against two different dosing arms of standard treatment for 48 weeks. SVR was
found to be 51% and 52% in the triple treatment arm as against 14% in the standard of care (PEG-interferon
+ ribavirin) arm.
Based on the positive data obtained from the PROVE trials, Vertex initiated Phase III studies in genotype 1
treatment naïve patients (ADVANCE, ILLUMINATE) and in treatment failure patients (REALIZE),
The PROVE 1 trial also signified the use of an extended 12 weeks treatment of interferon and ribavirin viral
suppression after treatment with triple combination therapy. The occurrence of rash in the PROVE-1 study
was 53-61% in the telaprevir arm vs 41% in the non–telaprevir treated patients and in PROVE-2 it was 44-
49% vs 35%. The rash however, subsided after the withdrawal of telaprevir.
In the PROVE-3 trials, 453 patients were equally divided in the treatment arms. The trial’s primary aim was to
assess the improved side effect profile with reduced duration of drug therapy and the efficacy outcome in the
ribavirin sparing arm. The trial results reported a decreased efficacy in SVR in the ribavirin sparing arm when
compared to its inclusion arm. The outcome measure was 23% in the ribavirin sparing arm and 51% and
52% in the triple combination arm. The combination therapy of the three drugs has shown impressive results
as compared to the standard treatment of care which reported only 14% SVR in difficult to treat patients.
Three Phase III trials were conducted to evaluate the therapeutic profile of telaprevir. The ADVANCE and
ILLUMINATE trials were conducted in treatment naïve patients and RELAIZE was conducted in treatment
refractory patients.
The ADVANCE trial recruited 1050 patients randomized in three treatment arms:
Arm 1- Standard of care (PEG-interferon + ribavirin) with placebo for 48 weeks
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Arm 2 - telaprevir (750md TID) with PEGinterferon +ribavirin for eight weeks, followed by 16 weeks of
PEGintereron +ribavirin. After assessment for absence of HCV RNA, treatment to continue for
additional 24 weeks with PEGinterferon +ribavirin.
Arm 3 - telaprevir 750mg TID with PEGinterferon + ribavirin for 12 weeks, followed by 12 weeks of
PEGintereron + ribavirin. After assessment for absence of HCV RNA, treatment to continue for
additional 24 weeks with PEGintereron + ribavirin.
The intent of the study was to determine the minimum dose of telaprevir required (either eight weeks or 12
weeks) to eliminate the presence of HCV RNA, in addition to determining the decrease in severity and
duration of rash with the use of telaprevir for eight weeks,
The results of the ADVANCE trial were reported in terms of SVR. The SVRs for the control arm, telaprevir
(eight weeks) arm and telaprevir (12 weeks) arm were found to be 44%, 69%, and 75% respectively. The
occurrence of side effects was also very high in the three arms at 3.6%, 7.7%, and 6.9% respectively,
leading to patient discontinuation. The discontinuation rate was 0%, 0.5%, and 0.4% respectively due to rash
and 0.6%, 3.3%, and 0.8% respectively due to anemia. One patient was detected with SJS. The study
results concluded that 58% of the patients needed 24 weeks of therapy.
The results of the study were reported as a 79% decrease in overall SVR rates, with 92% decrease at the
end of 24 weeks of treatment and 88% at end of week 48 of treatment. The extended RVR (eRVR) rates
were found to be 65% indicating that 65% of the patients were found to have undetectable HCV RNA at
week 24 and were thus eligible for discontinuation of treatment.
The purpose of the study, to determine the potential of 24 weeks of treatment with telaprevir and
PEGintereron + ribavirin, was met although patients in the 24 week treatment arm had higher relapse rates
than those in the 48 week treatment arm.
The ILLUMINATE trial enrolled 500 patients randomized to receive telaprevir 750md TID with PEGinterferon
+ ribavirin for 12 weeks followed by treatment with PEG interferon + ribavirin for an additional 12 weeks.
After an assessment to determine the eRVR (undetectable HCV RNA presence), the physician
52
recommended to either stop the treatment or continue for another 24 weeks with PEGinterferon + ribavirin.
The trial was designed to assess the impact of 24 weeks of treatment with telaprevir and standard treatment
of care.
The REALIZE trial recruited 650 treatment relapse, null responders and partial responders for the study, the
patients were randomized into three treatment arms:
Arm 1 - PEGinterferon + ribavirin with placebo for 48 weeks
Arm 2 - PEGinterferon + ribavirin for four weeks, followed by telaprevir 750mg TID with PEGinterferon
+ribavirin for 12 weeks. After this the patients were subjected to another 32 weeks on PEGinterferon +
ribavirin.
Arm 3 - telaprevir 750mg RID with PEGinterferon + ribavirin for 12 weeks followed by PEGinterferon +
ribavirin for 36 weeks.
The trial results were reported as a 65% overall decrease in the telaprevir arm and 17% for the control arm.
Approximately 4% of the patients discontinued therapy due to adverse effects.
Victrelis (boceprevir) - Merck & Co.
Boceprevir is a protease inhibitor that has been developed by Schering-Plough (now part of Merck & Co.).
The SPRINT-1 Phase II clinical trial evaluated boceprevir in a seven-arm trial for 48 and 24 weeks. There
was a lead in period of PEG-interferon and ribavirin treatment, a control arm for both PEG-interferon and
ribavirin (48 weeks), and a PEG-interferon plus low dose ribavirin and boceprevir arm. The results reported a
61-75% improvement in the SVR rates in treatment naïve genotype 1 patients in the boceprevir arm.
The SPRINT trial included 7% cirrhotic patients and a larger percentage of black patients compared to the
PROVE trials for telaprevir (16% SPRINT-1, 11% PROVE-1 and 1.9% PROVE-2). A major disadvantage with
the use of boceprevir is the occurrence of anemia in 39-51% of patients on boceprevir versus only 26% in
those taking PEG-intron and ribavirin. In the PROVE-1 and 2 trials the anemia incidence was 18-37% in the
triple combination arms with no EPO treatment.
53
RESPOND-2
In RESPOND-2, 403 treatment experienced subjects were randomized to three arms, 48 weeks control, 48
weeks control with boceprevir, and control with boceprevir using response-guided therapy. While 66% of
patients achieved SVR in the boceprevir 48-week treatment group, 59% achieved SVR in the boceprevir
response-guided therapy group as compared with 21% of patients in the control group.
SPRINT-2
In SPRINT-2, 1,097 treatment naive patients were enrolled in two separate cohorts, one with 938 non-
African-American/Black patients and the other with 159 African-American/Black patients. Patients were
randomized to three arms, 48 weeks control, 48 weeks control with boceprevir, and control with boceprevir
using response-guided therapy. While 66% of patients achieved SVR in the boceprevir 48-week treatment
group, 63% achieved SVR in the boceprevir response-guided therapy group as compared with 38% of
patients in the control group. Table 10 presents the result of SPRINT-2 study.
Table 10: Result of SPRINT-2 clinical trial in different cohorts
Cohorts boceprevir Response-guided Control (SVR)

treatment (SVR) therapy (SVR)
Non-African- 69% 67% 40%
American/Black
African- 53% 42% 23%
American/Black
patients
Source: NEJM BUSINESS INSIGHTS
The results for the two cohorts were analyzed separately as previous studies have shown that African-
American/Black patients have a lower response to HCV treatment than non-African-American/Black patients.
In the non-African-American/Black cohort 69% of patients achieved SVR in the 48-week boceprevir
treatment group, while 67% achieved SVR in the response-guided therapy group as compared to 40% in the
control group. Among the African-American/Black patients, 53% of patients in the 48-week boceprevir
54
treatment group and 42% in the response-guided therapy group achieved SVR as compared with 23% in the
control group.
The competition between Incivek and Victrelis

The much awaited launch of Incivek and Victrelis at the same time for hepatitis C has triggered the initiation
of a new treatment modality with an improved efficacy profile. However, the two products will now compete
for market space in the therapy segment until the launch of the second generation direct acting anti-virals
(DAA) in 2014-15. Figure 2 illustrates the perceptual positioning of the two PI in the HCV treatment space in
terms of volume and sales growth.
Figure 2: Perceptual position of Incivek and Victrelis
Theoretical perfect
product proposition
Victrelis
Marketing strength
Incivek
Market potential
Market potential = quality of product (efficacy minus side effects etc)

Marketing strength = strength of companies marketing the drug in
hepatitis C
Business Insights anticipates that the market share for Incivek and Victrelis will be divided 60:40 in terms of
sales by revenue. The market potential versus market penetration metrics provides the perceptual product
55
positioning strategy of the two marketing companies - Vertex (Incivek) and Merck & Co. (Victrelis) in
conjunction with the product’s therapeutic potential for growth.
The plot in Figure 2 was based on a comparison of the therapeutic significance of the launched products as
compared to its commercial attractiveness as perceived from the end-user benefit-opinion scale.
Vertex’s Incivek and Merck & Co’s Victrelis are anticipated to be the leading products for the treatment of
HCV infection during the forecast period. However, the market dynamics of these products is dependant on
both their clinical potential of the inherent molecule and the commercial prospects of the product in terms of
drug distribution and treatment cost.
Vertex’s product has established superior clinical efficacy in terms of SVR rate compared to Merck’s Victrelis.
In addition to this, treatment with Incivek will decrease the average duration of therapy from 48 weeks to 24
weeks which is a promising factor for the uptake of the product by patients and physicians alike.
However, a key competing factor which gives Victrelis an edge over Incivek is its commercial potential.
Merck & Co’s co-commercialization agreement with Roche to market Victrelis will be of significance in
generating sales, both by volume and revenue, in the near-to-mid term. Unlike Vertex, Merck and Roche are
established and experienced players in the hepatitis market with PEGIntron and Pegasys as their leading
marketed products respectively.
Furthermore, the price and reimbursement of the two drugs will influence patient uptake due to the high
treatment cost involved. Victrelis, though has a cumbersome dosing schedule with several physician visits
involving a lead-in period of four weeks with interferon and ribavirin followed by clinical assessment. Owing
to the high cost of the new products, payors will encourage initial treatment with the standard of care rather
than prescribing the expensive products first. This is particularly significant for treatment naïve patients.
Although the launch of these products has marked a new era in the treatment of HCV infection, there still
remains a huge treatment gap in terms clinical and commercial potential to meet physician bias. The drugs
are associated with severe adverse effects that either require vigilant monitoring or the intake of additional
drugs to control them. Additionally, these drugs do not control the SVR of the infection to near-maximum,
56
thus leaving a need for products with improved cure rates. The launch of Incivek and Victrelis has reduced
the potential gap in the treatment of HCV (in terms of therapeutic efficacy and safety, drug distribution and
affordability), but there is still room for drugs with better clinical profiles and improved commercial prospects.
Factors governing the market space of Incivek and Victrelis

Figure 3: Competitive position of Incivek and Victrelis
Reimbursement Physician attractive

attractive from as newer drugs
Payors view associated with
higher safety issues Merck & Roche collaboration
will manipulate market
dynamics with larger &
established sales force and
Anemia occurs in Lead-in period of 4- HCV drug distribution
more than weeks with P/R, experience through sales of
50% of patients. followed by Victrelis Pegasys and PEG-Intron
Preventive/sympt inclusion on basis of
omatic treatment clinical assay.
with EPO Another check-up at
advised with week 24 for Relapse, Naïve $41k + $5k
treatment. progress. and Treated (EPO)
population
treatment
Distribution
duration
Patient
Victrelis
Cost of
network
method
Efficacy
Dose
Dosing
Safety
Incivek
Rash needs $49k/treatment

Triple dose given Null, Relapse,
physician + rash
from outset, Naïve and
monitoring and management
follow-up after 24 Treated
patient awareness weeks
to prevent fatal impacting future
effects (such as course of therapy
development of
SJS). Monitoring
leads to additional
cost inclusion Driver to resistor
Patient attractive
due to absence of
long waiting period
57
Figure 3 illustrates the various factors and their relative importance that will act as drivers and resistors to the
uptake of Victrelis and Incivek.
Marketing strategy impacts product uptake
The marketing strategies of the two companies (Merck and Vertex) will play a major role in the market uptake
of their HCV franchise, both by revenue and volume and are explored below.
Merck’s non-exclusive agreement with Roche
Soon after the approval of Victrelis by the US FDA, Merck & Co entered into a commercialization agreement
with Roche. In addition, the two companies have also decided to co-develop pipeline products for HCV. The
agreement between the two companies is a key marketing strategy adopted by Merck to promote its HCV
products Victrelis, which is not as clinically attractive as Vertex’s Incivek.
As per the agreement, Roche’s sales force that markets Pegasys (leading PEG-interferon for the treatment
of HCV) will also market Merck’s Victrelis. This coupled with Merck’s efforts to market Victrelis with PegIntron
will drive significant market penetration of the new drug. Merck and Roche’s extensive distribution networks
combined with their experience in marketing HCV drugs (Roche-Pegasys, Merck & Co.- PegIntron) will
ensure a thorough market penetration with brand loyalty as an added advantage to Victrelis’ market uptake.
As a consequence of the above deal, Merck faces a potential fall in the sales of its established PegIntron
franchise due to promotion of Pegasys in combination with Victrelis. Pegasys and PegIntron share a 60:40
split of the interferon market by sales. However, Merck believes that Victrelis sales will offset the lost sales of
PegIntron.
Vertex is not far behind in the marketing race
Vertex has collaborated with J&J for the commercialization of Incivek in the ex-US market and with
Mitsubishi Tanabe for marketing in Japan. Vertex retains marketing rights in the key US market. Merck has
an edge over Vertex in the US as a result of its own and Roche’s sales networks being entrenched in the
HCV market. However, Vertex’s product portfolio will be its key strength in market uptake. For E.g. Vertex’s
anti-HCV franchise Incivek has been studied in combination with Roche’s leading interferon product
58
Pegasys, whereas Merck’s product Victrelis has only been studied with PegIntron. Thus, patients (and
physicians) on Pegasys are likely to prefer Incivek over Victrelis due to clinical study data availability.
Adverse effects, a cause of concern
Telaprevir and boceprevir each demonstrated adverse effects of rash and anemia respectively. Both drugs
are given three times daily. The drugs reduce the viral load at an early stage and thus provide an
intermediate barrier to the virus as an early attack by the drug usually also targets the mutant strains of the
virus.
The most common adverse effect associated with telaprevir is rash, occurring in 50-60% of the patients. This
also led to patient discontinuation in the Phase II trials (3-8%). Furthermore, the occurrence of rash with the
use of telaprevir can be severe in 5-10% of patients with the possibility of developing Steven-Johnson
Syndrome (SJS). Rash has been a major cause of concern for both physicians and patients alike as constant
monitoring and awareness is essential to prevent aggravation. Thus, clinical vigilance combined with topical
care with oatmeal bath and creams are to be advised by physicians.
A common side effect which is of concern with the use of boceprevir is anemia which was found to occur in
56% of patients during clinical trials. The effect can however be controlled by giving erythropoietin (EPO) to
the patient. Physicians have experienced the occurrence of anemia as an adverse effect with the use of
ribavirin. Merck is also conducting a clinical trial to assess the relation between decreased use of ribavirin
and anemia. The trial results are expected to be released by 2H11.
59
Efficacy will influence uptake
Phase III trials have demonstrated the superior efficacy of Incivek over Victrelis in terms of sustained
virological response (SVR). Table 11 presents a comparison of the Phase III trial results of Incivek and
Victrelis.
Table 11: Efficacy comparison of Incivek and Victrelis in Phase III study
Drug Trial name Condition SVR rates (%)

Incivek ADVANCE Treatment naïve 79
REALIZE Treatment experienced
relapsers 86
partial responders 59
null responders 32
Victrelis SPRINT-2 Treatment naïve

RGT 63
48 weeks 66
RESPOND-2 Treatment experienced
RGT 59
48 weeks 66
Note: RGT-response guided treatment, SVR-sustained virological response
Source: Business Insights, Company reports BUSINESS INSIGHTS
Furthermore, telaprevir has an advantage of efficacy data in null responders that is absent for boceprevir.
Merck is currently conducting a trial on the null responders for Victrelis Telaprevir has also demonstrated
increased efficacy in higher cure rates than boceprevir (86% vs 70-75%) for the treatment of relapse
patients, which is of much significance for drug uptake by warehoused patients. In addition, Incivek is used
as a response guided approach which signifies that on achievement of response, the treatment can be
stopped.
60
Dosing method
Incivek dosing includes a triple combination therapy (PEG-interferon + ribavirin + Incivek) from day one, until
24 weeks after which a clinical assessment determines whether a further dose of pegylated-interferon plus
ribavirin therapy is to be taken or not. The Victrelis dosing schedule involves a lead in period of four weeks
with PEG-intereron and ribavirin. This is followed by Victrelis administration until week 24 when clinical
assessment is done. The full course of therapy usually accounts for 28-48 weeks for Victrelis and 24-48
weeks for Incivek.
Duration of therapy may drive short term sales
The current standard of care treatment with PEGinterferon and ribavirin requires a 48-weeks dose duration.
Incivek and Victrelis have been shown to decrease this dose duration from 48 weeks to 24 weeks. The
clinical trials have shown that the decrease in dose duration with Incivek is 18% more than when compared
to Victrelis. The duration of therapy is almost halved when Incivek is prescribed in patients. The decrease in
dose duration to almost half of the initial period, in addition to the improvement in SVR rates will promote
drug uptake in the near future.
Reimbursement decisions to be critical in deciding the winner
The reimbursement status of the two drugs however, will be crucial in determining the market success of the
two products. The treatment cost with the use of these drugs is high compared to the previous standard of
care and it is likely that insurance coverage and co-payments will be required by patients who are prescribed
these drugs in many markets. However, Business Insights believes that since private insurance for the
treatment of HCV makes up 56% of the US HCV market and Medicaid and Medicare account for only 3% of
the market, the sales of the two products will largely depend on the payor’s decision to reimburse and at
what level. Due to the high cost of these new drugs, payors will be reluctant to reimburse them for all patient
groups, particularly treatment naïve patients. It is likely that guidelines will recommend this cohort of patients
to first undergo treatment with the current standard of care and then only switching to these new drugs if the
standard of care fails to work. This factor will benefit the sales of Victrelis as it includes a lead-in period with
PEG-Interferon and ribavirin.
61
Product life cycle and forecast
Figure 4 illustrates the short-term product life cycle of Incivek and Victrelis.
Figure 4: Product life cycle of Incivek and Victrelis
Growth Maturation Decline
Sales growth Slow growth in sales post Slow sales decline

driven by launch of 2013 due to launch of due to launch of
higher efficacy generics/biosimilars & higher efficacy
drug coupled by more patient warehousing drugs (almost
increased uptake for drugs to be launched in 100% SVR) with
by warehoused 2014-15. less severe
patients adverse effect and
once-a-day dosing
Incivek
Victrelis
Sales growth
2011 2012 2014 2016
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Figure 5 illustrates the forecast sales of Incivek and Victrelis to 2016.
Figure 5: Forecast sales of Incivek and Victrelis to 2016

3500
3000
2500
Sales ($m)
2000
1500
1000
500
0
2011 2012 2013 2014 2015 2016
Incivek Victrelis
Table 12 presents the forecast sales data for Incivek and Victrelis to 2016.
Table 12: Forecast sales of Incivek and Victrelis, 2010-16
Products Sales ($m) Sales ($m) Sales ($m) Sales ($m) Sales ($m) Sales ($m)
2011f 2012f 2013f 2014f 2015f 2016f
Incivek 452 1,735 2,996 3,100 2,915 2,720
Victrelis 301 1,157 2,069 2,358 2,143 1,813
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Hepatitis market drivers, challenges, and resistors
Table 13 presents the impact of drivers and challenges in the hepatitis market to 2016.
Table 13: Impact of drivers and challenges in hepatitis market to 2016
SN Parameter Effect Impact

2011-12 2012-14 2014-16
1 Launch of novel drugs for HCV treatment D High High High
will promote revenue sales growth
2 Awareness of hepatitis will create short- D High High Medium
medium term sales uptake
3 Challenges in bridging the treatment gap C High Medium Medium
impedes forecast market uptake
4 Warehoused patients seeking new D High Medium Low
treatment options will temporarily create
demand
5 Drugs with reduced adverse effects D Medium Medium Low
change the treatment modality
6 Launch of biosimilars will slow market R Low Low Medium
growth in terms of revenue sales
7 The WHO’s approval of the SFDA’s D Low Low Low
vaccine regulation will increase low cost
vaccine supply
8 Increasing HIV-HCV/HBV co-infection C Low Low Low
rates if not clipped will affect sales growth
Note: D=Driver; C=Challenge; R=Resistor
Launch of novel drugs for HCV treatment will promote revenue sales growth
Incivek and Victrelis have been launched for the treatment of HCV. These products are set to change the
treatment modality for this chronic condition. For more analysis please refer to the previous section.
Increased awareness of hepatitis will create a short to medium term sales increase
Hepatitis is as chronic an infection as HIV, although the prevalence rate is under-rated due to a lack of
awareness of assay methods for detection, and treatment. Hepatitis infection transmission occurs through
similar routes as HIV. With increasing prevalence and detection of the disease across the globe, several
64
state and private institutions are now taking initiatives to control the spread, improve disease awareness and
provide medication to the infected.
Increasing disease awareness in countries with high hepatitis prevalence is leading to several control
measures being taken by the public and private institutions. For example in November 2010, the Philippines
senate announced the implementation of a bill under which hepatitis B vaccination of infants is declared
mandatory. All infants will receive immunization within 24 hours of birth and children born outside medical
care will receive the same within seven days of birth. The vaccine is included in the country's National
Immunization Program. The immunization program will receive dedicated funding from Department of Health
including a share of the taxes from alcohol and tobacco. The program will also include educating the
expectant mothers about the immunization program. In addition to the above measure, the government plans
to increase awareness of hepatitis among the population and introduce measures to provide healthcare to
infected individuals.
Several large pharmaceutical companies have entered into agreements with government and non-
governmental organizations for the provision and distribution of vaccines. GSK, Merck & Co and several
Indian companies have reduced the prices of their pentavalent vaccine and this was announced by the
Global Alliance for Vaccines (GAVI) in June 2011. The vaccines are procured at subsidized prices by
UNICEF. The pentavalent vaccine protects against five infectious diseases namely, diphtheria, pertussis,
tetanus, hemophilus influenza type b and hepatitis B. These vaccines are being supplied at low prices by
companies such as Shantha Biotech providing the vaccine at the lowest price and Panacea Biotech to
provide the same at 15% lower prices.
Challenges in bridging the treatment gap impedes forecast market uptake

Drug distribution, affordability, compliance and awareness are a few of the key issues that need attention if
the gap between the number of people infected with hepatitis and the number of patients receiving treatment
is to be reduced. Hepatitis B vaccines have been introduced to the national immunization programs of
several countries (E.g. India, China, and Brazil) as a preventive treatment. However, at present, a large
undiagnosed and/or untreated patient pool needs to be addressed across the globe. The situation is
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particularly grave in developing nations as affordability forms a prime resistor to drug uptake. Furthermore,
drug approval and distribution in these nations is also a concern for the industry and also patients due to
country-specific regulatory policies (E.g. Brazil's non-approval of Gilead's Viread). In addition, only a very
small percentage of the patient population is aware of the diagnostic and treatment methods available for
hepatitis and this prevents them from seeking medical help. Collaborative efforts by public and private
enterprises can help overcome this issue by promoting disease awareness, and increasing the availability
and affordability of medication.
Warehoused patients seeking new treatment options will temporarily create demand
Following the launch of Incivek and Victrelis there is expected to be an increase in the population of hepatitis
patients receiving active treatment. Before the launch of these products, many patients become refractory to
treatment, for example, in one clinic in Los Angeles, one out of every five patients are refractory and are
receving no treatment and have effectively been warehoused. This is because the majority of these
“warehoused” patients will now receive treatment following the launch of these new products that have
higher SVR rates than the standard therapy. Although these Incivek and Victrelis are a breakthrough in the
treatment of HCV with higher rates of SVR, there are other drugs in development that offer even higher
efficacy, lower frequency dosing and a single pill formulation. The primary concern with the use of the current
standard of care (pegylated interferon plus ribavirin) is the occurrence of adverse effects the most
importance of which is anemia. The newer drugs though are also associated with adverse events (telaprevir
–rash and bociprevir- anemia) but the treatment period with the use of these drugs has been cut down
considerably from a year to about six months. Thus less exposure leads to few incidences of adverse effects.
The protease inhibitors have also found to be useful in the treatment of patients that have failed prior
therapy. As per estimates, 5-9% of the patients with prior failed therapy have shown efficacy with a second
course of treatment with the protease inhibitors. The first two protease inhibitors to be launched in the market
will gain a large share of the market due to their ability to be used in the warehoused patient population.
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Drugs with reduced adverse effects change the treatment modality
The occurrence of adverse effects has been a significant cause of treatment discontinuation among patients
with hepatitis infection. The currently available standard of care, that has been used for over a decade, is
PEG-interferon and ribavirin. The combination of these two products has been associated with several
adverse effects, with the most severe ones being anemia and flu-like symptoms. These adverse effects also
occur in approximately 20% of the patient population. The launch of boceprevir and telaprevir in 2011 for the
treatment of hepatitis C has been well received by physicians. However, these products are also associated
with adverse effects such as rash (which can extend to a severe form of a Steven-Johnson Syndrome) and
anemia respectively. The occurrence of rash has also been found to be a primary cause of treatment
discontinuation during Phase II clinical studies. Though the adverse effects associated with telaprevir and
boceprevir can be controlled through vigilant monitoring and treatment (EPO for anemia), they are still a
cause of patient discomfort that may lead to non-compliance. Thus, the launch of the second generation
direct acting anti-virals (DAAs) in the forecast period will be of significant potential in generating sales
revenue as these products have enhanced efficacy over the marketed products in addition to causing less
severe side effects. The use of these drugs has been reported to cause an increase in bilirubin levels that
could lead to jaundice. According to physician consensus, jaundice is a less severe a side effect than rash or
anemia and relatively simple to manage. The pipeline products are thus much awaited and will potentially
expand the hepatitis C market. Table 14 summarizes the adverse effects associated with various therapies.
Table 14: Adverse effects associated with different treatment modalities
Treatment Examples of products Adverse effects
Current treatment PEG-interferon/Ribavirin Anemia, flu-like symptoms, nausea,

fatigue, neutropenia, injection site
reactions, arthralgias, retinal detachment
New treatment Telaprevir, boceprevir Rash, anemia
Pipeline products BI 201335, TMC 435350 Hyperbilirubinemia
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Launch of biosimilars and generics will slow market growth
The first biosimilars for the treatment of hepatitis are forecast for launch by 2013-14. The launch of these
therapeutically similar and lower cost drugs will significantly impact the sales of the branded products.
Generic versions of hepatitis drugs are currently under development in many high prevalent hepatitis
countries. For example, in February 2011 it was announced that a state-owned laboratory in Brazil is going
to collaborate with privately owned firms to manufacture a generic version of Gilead's Viread after its patent
application was rejected in the country in 2009; two of these labs, Funed and Lafepe. Viread accounts for
10% of Brazil’s country's STD/AIDS program’s expenditure. The Brazilian government declined the patent for
Viread on grounds of lack of novelty and inventive methods. The government has been buying the drug from
Gilead for the control of HIV and hepatitis in the country. Due to the high cost of treatment, the government
initiated the program for generic drug development as a cost saving measure. The public-private partnership
will function in such a way that the active ingredient will be manufactured by the private firms and the finished
formulation by the state-owned laboratories. The private firms will also fund the cost of research and
production.
The WHO’s approval of the SFDA’s vaccine regulation will increase low cost vaccine
supply
In March 2011 the WHO approved the vaccine regulatory systems of China's SFDA, this is a prerequisite for
vaccine manufacturers based in China to be able to supply other nations that procure vaccines through
United Nations. Individual vaccine manufacturers must still gain approval, this can be done by application for
prequalification to the WHO, that ensures safety, efficacy, quality and standard required for distribution
through United Nations. With this news the SFDA has crossed a milestone, as the vaccines now
manufactured in China can be sold into the global market providing a huge increase in sales to Chinese
vaccine manufactures. Globally this will have an impact on the availability of cheap vaccines and is likely to
push down average vaccine prices.
Increasing HIV-HCV/HBV co-infection rates if not reduced will affect sales growth
Hepatitis B infects about 5-7% of the world's population. In low endemic areas, infection primarily occurs in
the young adult population through sexual and needle transfer. Thus, due to similar transmission routes in
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HIV and hepatitis, the co-infection rate is as high as 5-10%. In high endemic areas such as Africa and Asia,
HBV-HIV co-infection occurs in the first five years of life primarily due to perinatal transmission and other
medical procedures. Studies have shown that persistent use of lamivudine in the treatment of HIV has
caused decreased replication of HBV though HBeAg seroconversion was not affected. In countries where
HAART (highly active anti-retroviral therapy) is available, 2% mortality due to HBV-HIV co-infection is
observed. This is attributed to the high reactivity of HBeAg and high levels of HBV DNA in HIV infected
patients. HAART drugs have however been useful in restoring immunity and thus preventing seroconversion.
ART such as lamivudine, tenofovir, and emtricitabine have been effective in suppressing HIV and HBV
replication. But a significant resistor to the drug use has been the relapse rate leading to re-occurrence of
infection after drug withdrawal. Evolution of mutant strains has also been observed with this drug course.
The use of lamivudine has been associated with the spread of multi drug resistant mutant strains that even
escape HBV vaccine preventive method. Thus, various steps need to be taken to overcome the treatment
gap in HIV-HBV co-infection. These include screening for HBeAg in HIV infected patients, periodic tests to
determine liver enzyme levels and the availability of drug therapy without lamivudine in co-infected patients.
Key events
Bristol-Myers Squibb acquires ZymoGenetics for $885m
Bristol-Myers Squibb (BMS) acquired ZymoGenetics for $885m in September 2010. In January 2009, the
companies formed a collaboration to develop pegylated-interferon lambda, a novel interferon in Phase IIb
development for the treatment of hepatitis C infection. The acquisition aims at attaining the development and
commercialization rights of pegylated-interferon lambda. The collaboration will mark BMS’s entry to the
hepatitis C market.
BMS intends to present four-week and 12-week results from a Phase IIa study at the American Association
for the Study of Liver Diseases meeting later this year. The acquisition will also provide BMS with ownership
of other pipeline products of ZymoGenetics in addition to pegylated-interferon lambda.
69
The FDA grants fast track status to Pharmasset’s PSI-7977 for the treatment of HCV
In August 2010, the FDA granted fast track designation to Pharmasset’s PSI-7977, an oral uridine nucleotide
analog polymerase inhibitor of HCV, for the treatment of chronic HCV infection, with a view to address the
urgent need for new HCV drugs. The need for HCV treatments with novel mechanisms of action, oral
administration, different resistance profiles, and improved safety and efficacy over the existing standard of
care were primarily the reasons for PSI-7977’s fast track approval.
Under the FDA Modernization Act of 1997, fast track designation accelerates the development and review of
drugs demonstrating the potential treatment of life-threatening diseases.
Development program for therapeutic intranasal vaccine for treatment of hepatitis B

In April 2010, NanoBio announced its plans to develop an intranasal vaccine for the treatment of HBV along
with the University of Michigan's Nanotechnology Institute for Medicine and Biological Sciences. Currently
available HBV vaccines are effective prophylactics, but lack therapeutic properties for those that are already
infected. The new intranasal vaccine is expected to reduce the risk of HBV associated liver diseases and
subsequent deaths globally. The vaccine is claimed to be highly stable at room temperature enabling storage
without refrigeration, which is not the case for existing vaccines. The program will receive funding through a
Phase 1 Technology Transfer (STTR) from the National Institutes of Health (NIH).
Novartis discontinues the development of Joulferon/Zalbin on safety concerns

In October 2010, Novartis announced its decision to discontinue the development of albinterferon alfa-2b
(known as Zalbin in the US and Joulferon in Europe) intended for the treatment of adults with chronic
hepatitis C. The decision to discontinue was a result of safety and efficacy concerns raised by the US and
EU regulatory authorities. In June 2010, the FDA raised significant concerns regarding Joulferon/Zalbin’s
application to market Zalbin in the US.
The product was being co-developed with Human Genome Sciences (HGS) and intended to be used in
combination with daily doses of ribavirin for the treatment of chronic hepatitis C. The product was expected
to be a strong competitor to the current standard of care such as Roche's Pegasys (peginterferon alpha-2b)
70
as they are injected once in a week compared to a proposed dosing schedule of once every four weeks.
Novartis had the license for the worldwide marketing and promotion of the drug, except for the US.
GSK signs microRNA deal with Regulus for HCV

In February 2010, GSK signed a deal with Regulus to develop and commercialize microRNA therapeutics for
HCV. According to the agreement, Regulus will receive upfront and early-stage milestone payments of over
$150m and tiered royalties on the worldwide sales of any approved products. The deal will focus on miR-
122, a liver-expressed microRNA that is believed to be a critical endogenous host factor for the replication of
HCV. Regulus also plans to identify a clinical development candidate later this year and to file an IND
application in 2011.
GSK has been associated with Regulus since 2008, when it entered into collaboration with Regulus, to
develop microRNA-focused therapeutics for immuno-inflammatory diseases such as rheumatoid arthritis.
Government initiatives to curb the incidence of hepatitis

Several governments are initiating programs to increase awareness about hepatitis, with an aim to curb the
incidence of hepatitis worldwide. Hepatitis B and C are the major cause of liver disease across the globe,
although new cases of hepatitis have declined significantly in recent years, a large proportion of infected
population are expected to start experiencing the effects of liver damage. In September 2010, the US
Department of Health and Human Services' Office of Minority Health, the Hepatitis B Foundation and the
Association of Asian Pacific Community Health Organizations (AAPCHO) launched a campaign to raise
awareness of the epidemic of chronic hepatitis B. The focus of the campaign is a television public service
announcement (PSA), supported by funding from Gilead, that encourages individuals to get tested for this
preventable and treatable disease.
In the same month, an awareness program was also launched in Europe that involved partnership from key
international public and private stakeholders to drive the first Europe-wide initiative on hepatitis B and C. The
partnership aims to achieve the development of strategies on the communication, prevention and
management of viral hepatitis. The first initiative includes a Summit Conference on Hepatitis B and C, where
the latest research and advances will be presented.
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Vertex collaborates with Alios for hepatitis portfolio
In June 2011 Vertex signed an exclusive agreement with Alios Pharma whereby it acquired the rights to two
nucleotide analogues indicated for the treatment of hepatitis C. The two molecules, ALS-2200 and ALS-2158
are inhibitors of the HCV protease enzyme that is required for viral replication. With this agreement, Vertex
potentially expands its hepatitis product portfolio. The clinical trials are considered to begin from 2011.
The deal has the potential to further strengthen Vertex’s position in the HCV space in which it has had recent
success with the launch of Incivek. The company decided to go ahead with the agreement based on the in-
vitro studies performed on the drug in combination with the currently approved therapies. The initial data has
reported the use of the drugs as a once a day oral formulation with a high barrier to drug resistance. They act
on the NS5B polymerase.
The two investigational drugs are being studied in combination with each other and also with the other drugs
in Vertex’s portfolio such as Incivek and VX-0222. The initial data presented showed a synergistic effect of
the two investigational molecules with each other and also with Incivek and VX-0222. An additional benefit of
the drug observed in the in-vitro study was its effectiveness against all genotypes of HCV which gives it the
potential to be can be used in a wider population range across the globe.
As per the agreement, Vertex gains worldwide rights for the development and commercialization of the two
products, thereby expanding the portfolio. The clinical studies of the two products will commence by the end
of 2011. Vertex will pay Alios, an upfront payment of $60m, further payments include drug development and
research costs paid by Vertex to Alios. In addition, Alios will receive milestone payments in conditions of
approval and commercialization.
Biosimilars and generics

Companies are developing biosimilars of interferon for the treatment of hepatitis. However, regulatory
restrictions are a big hurdle to the approval of such products. For example BioPartners’ Alpheon (biosimilar
of Roferon A) received a negative decision for approval from the EMA in 2009 due to concerns of safety and
72
efficacy. A large number of these biosimilar manufacturers are located in emerging markets such as China
and India.
Despite the regulatory hurdles, the global biosimilars market is set to grow at a CAGR of 59.8% in 2010-16
leading to a total market size of $4bn in 2016 from $240m in 2010. This is primarily attributed to a large
number of patent expiries of biologicals in the forecasted period coupled with the high cost of treatment with
these products. The global hepatitis biosimilars market was valued at $12m in 2010 and the market is
positioned to expand at a CAGR 2010-16 of 75.5%. The key drivers of growth in the biosimilars market for
hepatitis are approval of new biosimilar interferons in multiple markets
Several firms in US and EU are developing biosimilars for hepatitis. For example Cysplasin Biomedicals is
investigating the biosimilar version of pegylated interferon (to be marketed as C-PEGferon) in developed
markets such as the US, EU and other major emerging markets such as Russia, China, and India.
In 2010, Cysplasin signed a commercialization agreement with Minapharm Pharmaceuticals for marketing its
biosimilar version of pegylated interferon. The agreement covers regions of North and South America,
Russia, India and China. Minapharm has its own biosimilar version of interferon which is sold in North Africa
and the middle-east regions.
Generic versions of few marketed hepatitis drugs are also available. Ribavirin was launched in 1985 by
Valeant Pharma for the treatment of viral respiratory tract infection, and the drug after losing its patent expiry
was used in conjunction with pegylated-interferon for the treatment of hepatitis B and C. The generic version
of the drug is manufactured by several companies such as Teva and Sandoz. Another small molecule drug
for which generics are available is lamivudine which is used in the treatment of hepatitis B. Several generic
versions of lamivudine are available from companies such as Teva.
Generic and biosimilars drugs will slowly gain a significant market share due to their low cost versus branded
products. Leading products for the treatment of hepatitis- Viread and Baraclude will see patent expiration by
the end of the forecast period. Baraclude will lose its worldwide patent expiry by 2015, with exclusivity lost by
2013 (as per orange book). Viread will lose its patent protection in 2017. The launch of generic Baraclude,
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much ahead of generic Viread, will have a detrimental impact on the sales of both the brands. Though Viread
sales have been rising due to advantages of barrier to resistance and high efficacy, the price of the drug will
slow its uptake towards the end of the forecast period. Furthermore, Baraclude generics will negatively
impact Viread’s branded sales from 2015.
Leading hepatitis drugs sales forecast

Table 15 presents the forecast sales of leading products in hepatitis market to 2016 ($m).
Table 15: Leading hepatitis brands sales forecast ($m), 2010-16
Products Sales Sales Sales Sales Sales Sales Sales

2010 2011f 2012f 2013f 2014f 2015f 2016f
($m) ($m) ($m) ($m) ($m) ($m) ($m)
Pegasys 1,577 1,634 1,730 1,845 1,894 1,893 1,883

Hepatitis 1,112 1,170 1,209 1,243 1,278 1,309 1,338
Baraclude 931 1,093 1,197 1,292 1,367 1,249 1,051
Peg Intron 737 719 698 672 642 613 587
Viread 732 958 950 964 970 974 1,000
Zeffix 360 331 317 316 315 314 314
Copegus 308 317 308 302 305 313 312
Rebetol 220 207 184 160 147 141 135
Intron A 209 207 206 205 204 204 203
Hepsera 201 105 66 40 22 12 5
Top 10 6,387 6,743 6,867 7,039 7,144 7,020 6,828
Others 99 178 141 124 109 100 93
Incivek 0 452 1,735 2,996 3,100 2,915 2,720
Victrelis 0 301 1,157 2,069 2,358 2,143 1,813
Total 6,486 7,674 9,899 12,228 12,711 12,178 11,453
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Chapter 3 Pipeline analysis
Summary
The hepatitis pipeline is comprised of a significant number of novel compounds in the early-stages of
development. The potential for market success is largely attributable to a large patient population,
which requires long term treatment. There is also a great deal of unmet medical need.
Hepatitis C has the most promising products in development. Presently, pegylated interferon commonly
used in combination with the ribavirin is the standard of care (SOC) for the treatment of hepatitis C.
A strong market opportunity exists in patients less responsive to current hepatitis treatment, including
adults over 40 years of age, individuals with chronic renal disease and individuals with HIV. The
treatment-failure population, representing approximately 40% of the total hepatitis C infected
population, is expected to present a significant commercial opportunity.
According to the WHO, over 170m people worldwide, are chronically infected with HCV, with 3 to 4m
new infections occurring each year. Roughly 75% of these cases fail to resolve acutely and evolve into
a chronic state. Additionally there are several other patients waiting for a new therapy with higher cure
rates. Together they represent a multibillion dollar market for any successful new drug candidate.
Cyclophilin inhibition is a novel approach to treat HCV which is based on targeting host factors that are
required by the virus for replication. The mechanism of action is different to that used by currently
available drugs and will therefore have less resistance. Moreover the inhibitor could be used in
combination with direct antivirals. Debio 025 developed by Novartis/Debiopharm is the forerunner in
this category.
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Introduction
This chapter covers key late-stage pipeline drugs, provides analysis of ongoing clinical trials, and their sales
are forecast. Hepatitis C is the key indication in the hepatitis market with the strongest pipeline. Presently,
pegylated interferon commonly used in combination with ribavirin is the standard of care for hepatitis C
treatment. Although, clinical efficacy demonstrated by new agents such as protease and polymerase
inhibitors in late-stage clinical trials look promising, pegylated interferon and ribavirin will continue to be a
mainstay of treatment regimens for the next few years, as most of the new compounds are demonstrating
higher efficacy in combination with pegylated interferon and ribavirin. A number of nucleotide and non-
nucleotide HCV polymerase inhibitors are also under clinical investigation and are in the early stages of
development.
Key trends in hepatitis R&D

Promising developments in the hepatitis C pipeline
The pipeline for the treatment of hepatitis C is relatively strong in comparison to other hepatitis types. A large
number and distinct classes of compounds are under development for the treatment of hepatitis C infection.
While manufacturers are developing products which are to be used in combination with the SOC, a lot of
investment is also being made in the development of compounds with the potential to eliminate the
dependency on the present SOC. These new compounds are expected to shorten treatment duration and
have favorable side effect and tolerability profiles. Apart from protease inhibitors, several other agents with
novel mechanisms of action are under development such as polymerase inhibitors and cyclophilin inhibitors
from various manufacturers including Roche, Merck, and Novartis.
The major product, which is the forerunner in the cyclophilin inhibitor class is Debio 025 developed by
Novartis/Debiopharm. Cyclophilin inhibition is a novel approach to treat HCV which is based on targeting
host factors that are required by the virus for replication. The mechanism of action is different and will as a
consequence have less resistance. Moreover the inhibitor could be used in combination with direct antivirals.
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Novartis in March 2011 has initiated a Phase III trial for this product, the final data from this trial is expected
by end of 2013
Product differentiation will hold the key to success in the hepatitis market
The key to commercial success will be to target the areas with the highest unmet need. Telaprevir and
boceprevir have raised the expectations of physicians and patients by offering superior clinical profiles over
the existing SOC. With a large number of products under development, it is imperative for companies to offer
clinically differentiated products, with novel mechanisms of action to effectively position their product. The
new product will not only have to match up to the superior profile of telaprevir and boceprevir but will have to
offer additional benefits to patients. For instance, present ongoing trials are testing compounds for a 24-week
treatment schedule. If new agents with similar mechanisms of action but lower treatment duration than 24-
weeks are introduced, it will expand the market significantly.
Multi-billion dollar opportunity for a successful drug class

According to the WHO, over 170m people worldwide, are chronically infected with HCV, with 3 to 4m new
infections occurring each year. Roughly 75% of these cases fail to resolve acutely and evolve into a chronic
state. The population of patients with chronic hepatitis C infections is estimated at 3 to 5m in the US and a
slightly greater number in Europe of 5 to 10m representing a huge target market. The frequency of new HCV
infections has been significantly reduced to 20K per year by blood screening; In the US the majority of new
HCV infections stem from IV drug use as opposed to previous transmission through the US blood supply.
Over 9,000 deaths are attributed to HCV annually in the US, and taking into account the presently infected
US population, the death rate is expected to grow in the next 15-20 years.
Both front-line and nonresponder patients represent sizable opportunities that can be addressed with new
HCV therapies and Scrip Business Insights believes that a new drug class that possesses synergistic activity
with other agents has blockbuster potential, with peak sales that could surpass $3bn. It estimated that there
are several thousands of patients in the world who have treated unsuccessfully with standard PEG-IFN and
could be early adopters for new HCV therapies. Additionally there are several other patients waiting for a
new therapy with higher cure rates.
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The treatment-failure population presents a significant opportunity
A strong market opportunity exists in the treatment of patients less responsive to current hepatitis treatment,
including adults over 40 years of age, individuals with chronic renal disease and individuals with HIV. The
treatment-failure population represents approximately 40% of the total hepatitis C infected population.
Moreover this population is expected to grow by 10% each year. The treatment-failure population includes
non-responders who failed on previous treatment with PEG/RBV therapy and patients who could not tolerate
the drugs. Some patients are even foregoing the current treatment in anticipation of the novel therapies.
Interferon-alpha monotherapy treatment-failure patients have an approximately 15% probability of achieving
SVR with interferon-alpha in combination with ribavirin, and a 25-35% probability of achieving SVR with
pegylated interferon in combination with ribavirin. However, treatment-failure patients treated with a
combination of interferon-alpha and ribavirin have only a 10% possibility of achieving SVR with pegylated
interferon and ribavirin.
End stage renal disease (ESRD) patients present high potential for vaccines
Currently marketed hepatitis B vaccines do not achieve satisfactory protection in difficult-to-immunize, less
responsive populations. While in the adult population, Engerix-B achieved protection in approximately 55% of
subjects, in end stage renal disease (ESRD) patients Engerix-B or Recombivax HB achieved protection in
approximately 60% of patients, and half of the patients who achieved protection lose it within a year. As a
consequence, current vaccines are able to penetrate well into the ESRD patient population. It is estimated
that there are approximately 1.7m patients with ESRD in the US, Japan, Germany, Taiwan and Korea and
1.5m patients co-infected with HCV and HIV in the US and EU. These populations represent high potential
and are easy to target from a commercialization perspective.
Despite the introduction of novel treatments, the SOC for hepatitis C will not change
The present SOC for hepatitis C treatment includes combination of pegylated interferon (PEG) and the anti-
viral drug ribavirin (RBV). A significant number of newer agents are under development with new
mechanisms of action for hepatitis C infections. Clinical efficacy demonstrated by the protease and
polymerase inhibitors in late-stage trials is very promising; however these therapies are not expected to
eliminate the need for combination therapy with the existing SOC for the next few years. New generation
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polymerase inhibitors such as Roche’s RG7128 have demonstrated a superior efficacy in combination with
the SOC. Debiopharm’s Debio 025 has also demonstrated superior clinical results in combination with the
SOC.
Profiles of the key pipeline products

TMC435 – Medivir/J&J
Overview
TMC435 is an investigational protease inhibitor being co-developed by Medivir and J&J for the treatment of
HCV infection. TMC 435 has appeared to be potent, well tolerated, and a true once-per-day drug in Phase II
studies. Although there have been some signals of liver toxicity, they appear to be a small concern and are
unlikely to trip up the program. Interim data from TMC435’s Phase IIb PILLAR and ASPIRE studies was
released during Q4:10, and data from TMC435’s OPERA-1 Phase II trial was presented at EASL 2009.
Table 16: An overview of TMC435
Brand/Code name TMC435

Generic name n/a
Company Medivir/J&J
Indication Hepatitis C infection
Mechanism of action Protease Inhibitor
Status Phase III
Note: n/a = Not available
Source: Business Insights analysis BUSINESS INSIGHTS
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Clinical
In February 2011 Tibotec/JNJ began TMC435’s Phase III program. The complete program will consist of
three trials, QUEST-1 and QUEST-2 which will be conducted in treatment naïve patients, and PROMISE
conducted in treatment experienced patients.
The first global ,Phase III study, QUEST-1 (QD dosing of TMC435 of previoUsly untreated GEnotype 1
patienTs-1) will be a double-blind, randomized study, this study is designed to evaluate a single TMC435
once daily oral tablet (150mg) versus placebo in treatment naïve HV patients. Both the groups will also
receive peginterferon alfa-2a (Pegasys) and ribavirin (Copegus) as part of their treatment.
The second Phase III study will be known as Quest-2 (QD dosing of TMC435 of previoUsly untreated
gEnotype 1 patienTs-2); this study will also evaluate a singe TMC435 once-daily oral tablet (150mg) versus
placebo in treatment naïve HCV patients. However, patients in this trial will either receive peginterferon alfa-
2a (Pegasys) and ribavirin (Copegus) or peginterferon alfa-2b (PegIntron) and ribavirin (Rebetol) as part of
their treatment program.
The third global Phase III double blind, randomized study will be known as PROMISE (PROtease inhibitor
TMC435In PatientS who have previously rElapsed on IFN/RBV), will evaluate a single TMC435 once-daily
oral tablet (150 mg) versus placebo in HCV patients who experienced viral relapse after previous interferon-
based therapy. Both groups will receive peginterferon alfa-2a (Pegasys) and ribavirin (Copegus). The
complete treatment duration for the three trials will be 24 to 48 weeks, further depending upon the patient
response.
These studies will be conducted in more than 160 sites in 24 countries, including the US and countries
throughout Europe and together have enrolled approximately 1125 HCV genotype 1 infected patients who
are treatment naïve or have experienced a relapse after previous therapy. The primary endpoint of the
studies is to assess whether TMC435 is superior to placebo in achieving sustained virologic response (SVR),
defined for the trials as HCV RNA <25 IU/ml undetectable, 24 weeks after the planned end of treatment
(SVR 24), with the final analysis being performed after the last patient reaches week 72 of the study.
Secondary endpoints include superiority of TMC435 versus placebo at 12 weeks (SVR 12), after planned
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end of treatment and at week 72 of the study. Evaluations of viral breakthroughs, relapse rates in treatment
groups, safety and tolerability also will be assessed. The molecule should see a market launch by 2014 with
expected sales of $60m in 2014, $160m in 2015, and $205m in 2016.
BI 201335 – Boehringer Ingelheim

Overview
Developed by Boehringer Ingelheim (BI), BI 201335 is being evaluated as a once daily treatment to be used
in combination with the SOC for chronic HCV genotype 1. BI 201335 is an NS3/4A protease inhibitor
currently in Phase III trial. BI presented Phase IIb interim data at the AASLD meeting in November 2009. The
interim data suggest that, while the RVR rates were relatively higher in telaprevir treatment, the EVR rates
were higher in BI 201335.
Table 17: An overview of BI 201335
Brand/Code name BI 201335

Generic name n/a
Company Boehringer Ingelheim
Mechanism of action Protease inhibitor
Status Phase III
Clinical
The initial Phase I data from a study conducted on treatment-naive and treatment-experienced patients,
presented at the AASLD meeting in November 2008, showed the significant antiviral activity of BI 201335 as
monotherapy for 14 days followed by the combination with PEG/RBV for an additional 14 days. BI 201335
was found to be well tolerated however, reversible changes in bilirubin were observed with an increasing
incidence of unconjugated hyperbilirubinemia at higher doses.
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The Phase II data from a trial conducted on a small patient base of 13, presented at AASLD 2009 in non-
responders showed that five patients achieved undetectable virus levels at day 28, while one patient showed
a rise in conjugated bilirubin to >10 ULN. "Conjugated bilirubin," is believed to be correlated with drug-
induced liver injury.
Interim study data from a Phase IIb trial, conducted on 420 treatment-naive patients, was presented at
AASLD in November 2009. The study revealed that treatment with BI 201335 lead to RVR rates of 62-77%
as compared with 4% for placebo and EVR rates of 80-90% compared with 42.3% for placebo. The results
from the study are comparable to the results for telaprevir; however, an incidence of jaundice of 16% was
reported during the studies. It is believed that if BI 201335 limits the increase in bilirubin levels, it can pose a
major threat to telaprevir.
The company has also planned Phase III Trial in treatment naive and relapsed hepatitis C Virus (HCV)-
human immunodeficiency virus (HIV) coinfected patients. This trial will be conducted in nearly 316 patients
and is estimated to start by the 2011 end.
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Vaniprevir (MK-7009) – Merck
Overview
Vaniprevir, a lead follow-on HCV protease inhibitor to boceprevir, being developed by Merck is currently in
Phase III. Although Phase IIb findings are awaited, the efficacy data in the Phase IIa trials was promising
with over 80% of patients having HCV RNA below detection levels on day 28.
Table 18: An overview of vaniprevir
Brand/Code name MK-7009

Generic name vaniprevir
Company Merck
Status Phase III
n/a = Not available
Clinical
Merck completed its Phase IIb clinical trial program for vaniprevir, and it is currently in Phase III. The
objective of the Phase IIa trial was to understand the efficacy and tolerability profile of MK-7009 and support
further development for the treatment of HCV. In Phase IIa, vaniprevir in combination therapy with the SOC
significantly improved RVR as compared with placebo in treatment-naive patients infected with chronic HCV
genotype 1. In Phase IIa, 95 patients with genotype 1 HCV were randomized across five treatment arms with
the following regimens; placebo, 300mg BID, 600mg BID, 600mg QD, or 800mg QD. All the patients then
continued on the SOC for an additional 44 weeks. The primary endpoint of the study was undetectable HCV
RNA (< 10 IU/mL) at day 28. Over 80% of the treated patients had HCV RNA below detection limit on day
28. There were no serious adverse events or discontinuations in the trial except for high rates of nausea and
vomiting. In April 2009, Merck presented its Phase IIa findings at the 44th Annual European Association for
the Study of the Liver (EASL) meeting in Copenhagen, Denmark.
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The Phase IIb study which was initiated in March 2009, aimed at evaluating the safety, tolerability and
efficacy of vaniprevir in combination with the SOC in treatment-experienced patients with chronic hepatitis C
genotype 1 infection. The study will measure the safety and tolerability of vaniprevir at all dose regimens as
compared with placebo through 48 weeks. According to clinicaltrials.gov, the study is expected to complete
by August 2012.
In June 2011 Merck commenced Phase III clinical trials in Japan of vaniprevir in combination with the SOC,
the study aims to enroll 285 patients and has an intended completion date of September 2013.
Debio 025 – Novartis/Debiopharm

Overview
Debio 025 is being developed by Novartis and Debiopharm, it is the most advanced cyclophilin- based
inhibitor with variable efficacy, long term safety is unknown. Cyclophilin inhibition is a novel approach to treat
HCV which is based on targeting host factors that are required by the virus for replication. The mechanism of
action is different and will have less resistance. Moreover the inhibitor could be used in combination with
direct antivirals.
Table 19: An overview of Debio 025
Brand/Code name Debio 025

Generic name alisporivir
Company Novartis/Debiopharm
Mechanism of action cyclophilin- based inhibitor
Status Phase III
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Clinical
Results from a Phase IIa study were presented at the EASL 2008 meeting. This study investigated Debio025
in combination with Peg-IFN in treatment naïve HCV genotype 1 and 4 patients for 29 days. In this study 90
patients were randomized to the following arms
Peg-IFN plus placebo;
Peg-IFN plus Debio 025 at 200mg/day;
Peg-IFN plus Debio 025 at 600 mg/day;
Peg-IFN plus Debio 025 at 1000 mg/day and
Debio-025 1000 mg/day.
At day 29, the HCV RNA reduction was -4.6 log10 IU/mL in the Peg-IFN with Debio-025 600 mg/day arm,
and -4.8 log10 IU/mL in the Debio-025 1,000 mg/day arm. This result compares to -2.49 and -2.20 log
reduction for Peg-IFN alone and Debio-025 alone, respectively. Undetectable viral load at day 29 (RVR) was
achieved in 25% of patients in Peg-IFN and Debio-025 as monotherapies vs. 66% of patients in the Peg-
IFN/Debio-025 1000mg/day combination therapy group.
In January 2009 Debiopharm initiated a Phase IIb study of Debio-025 in HCV genotype 1 patients. This study
had registered nearly 300 previously untreated patients infected with hepatitis C virus genotype 1. The study
met its primary endpoint for achieving viral cure (24 weeks after stopping treatment) in 76% of patients with
chronic hepatitis C.
The finding from this data showed that 76% of the patients treated with Debio-025 plus standard of care
(pegylated-interferon alfa 2a/ribavirin) achieved sustained viral response (SVR) compared to 55% of patients
on standard of care alone (p=0.008). Treatment with Debio-025 demonstrated a low incidence of adverse
events and discontinuation rates were comparable between the treatment groups
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A pivotal Phase III study with Debio-025 was initiated in June 2011 to evaluate the efficacy and safety of
Debio-025 combined with the standard of care with previously untreated HCV genotype 1 patients. Novartis
plans to enroll 1040 patients in this trial and estimates completion of the trial in April 2013.
Danoprevir (ITMN-191/RG7227) – Roche

Overview
Danoprevir, a macrocyclic protease inhibitor for HCV, is currently in Phase IIb clinical development. Roche
has patent protection for danoprevir until 2024. Initially Roche and InterMune were co-developing danoprevir,
however recently (October, 2010) Roche bought worldwide development and commercialization rights to
danoprevir from InterMune. The sole ownership of danoprevir is expected to provide flexibility in developing
combinations of its own hepatitis C compounds with molecules from other companies, making Roche’s HCV
portfolio significantly stronger. In a Phase I clinical trial, danoprevir demonstrated strong efficacy against the
hepatitis C virus as a monotherapy, in combination with RG7128 (a nucleoside analog for chronic HCV
infection being developed by Roche) and in combination with PEG and RBV. As danoprevir will enter the
market after telaprevir and boceprevir, it is expected to face stiff competition, unless, danoprevir is able to
differentiate itself through an optimized dosing schedule. Roche has initiated a Phase IIb clinical trial for
once-daily and twice-daily regimens in combination with low-dose ritonavir for 14 days. In the earlier Phase I
trial Roche tested danoprevir as a thrice-daily regimen.
Table 20: An overview of danoprevir
Brand/Code name ITMN-191/RG7227

Generic name danoprevir
Company Roche
Status Phase IIb
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Clinical
Phase IIb interim data from a study conducted on approximately 232 HCV patients, reported in April 2010,
showed a significant proportion of the patients achieved a clinically relevant virologic response after 12
weeks of treatment as compared to placebo. In the randomized, partially-blind study, danoprevir was
administered for 12 weeks in combination with PEG/RBV, compared to placebo with PEG/RBV for the same
duration. The study was randomized into four treatment groups, 300mg thrice-daily, 600mg twice-daily,
900mg twice-daily and placebo. However, in November of 2009, due to safety issues, dosing in the 900 mg
group was stopped. Patients already receiving treatment in this group continued on PEG/RBV. Dosing of
300mg, 600mg, 900mg and placebo observed complete early virologic response in 88%, 89%, 92% and 43%
patients respectively after 12 weeks of treatment. Furthermore, Merck is concentrating on establishing a
critical dose and regimen for ritonavir-boosted danoprevir for future development, which will be instrumental
in danoprevir’s success. Danoprevir is expected to be launched in the market by 2016 generating around
$50m in the launch year.
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RG-7128 – Roche/ Pharmasset
Overview
RG7128 is a nucleoside polymerase inhibitor indicated for the treatment of chronic hepatitis. The drug is
being jointly developed by Roche and Pharmasset through a worldwide agreement made by the two
companies for joint development and commercialization of the drug in November 2004. Roche attained the
worldwide rights to PSI-6130, its prodrugs and options to license all related compounds. As per the
agreement, Pharmasset was responsible for conducting the preclinical work file INDs and completing Phase
I trials prior to the transfer of the development responsibilities to Roche. Pharmasset received an up-front
payment, R&D funding, and milestone payments of approximately $168m for PSI-6130.
Table 21: An overview of RG7128
Brand/Code name RG7128

Generic name n/a
Company Roche/ Pharmasset
Mechanism of action Nucleoside polymerase inhibitor
Status Phase IIb
RG7128 is a prodrug of PSI-6130, an oral cytidine nucleoside analog. A prodrug is a chemically modified
form of a molecule which enhances the absorption, distribution and metabolic properties of the molecule.
PSI-6130, the active component of RG7128, is believed to be an inhibitor of HCV replication, specifically
targeting the HCV RNA polymerase. The molecule is forecast to be launched in 2014, generating sales of
$75m in the launch year , $185m by 2015 and $320m by 2016.
Clinical
The interim Phase IIb (PROPEL) study concluded that RG7128 is safe and well tolerated in patients with
genotype 1 or genotype 4 HCV infection. The objective of the PROPEL study was to evaluate optimum
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dosage and duration of treatment of RG7128 in combination with SOC in patients with chronic HCV
genotype 1 or genotype 4 in treatment-naïve patients. The interim results demonstrated that over 80% of
patients receiving the 12-week triple regimen had undetectable HCV RNA in all cohorts as compared with
50% for the placebo/SOC cohort. Roche has submitted the safety and efficacy data of the interim analysis of
the PROPEL Phase IIb study of RG7128 to AASLD for the Annual Liver Meeting to be held from October 29
to November 2, 2010. The study concluded that there were no viral resistance-related breakthroughs and
reported a high barrier to resistance in the first 8 or 12 weeks of triple combination therapy. Roche also
indicated that it has initiated an additional RG7128 Phase IIb study to assess its efficacy in longer treatment
regimens. Furthermore, Roche will begin another Phase III study in HCV-infected patients with genotypes 2
or 3 by late 2011 with filing planned for 2013.
ABT-450 – Abbott/Enanta
Overview
ABT-450 is an investigational protease inhibitor, which is being co-developed by Abbott labs with Enanta
pharmaceuticals.
Table 22: An overview of ABT-450
Brand/Code name ABT-450

Generic name n/a
Company Abbott/Enanta
Status Phase II
Clinical
A Phase I multiple dose, randomized, placebo controlled study was conducted in 38 healthy subjects. The
subjects were randomized and 30 were placed in the active arm. Whereas, eight were placed in the placebo
arm. The subjects were given 50mg BID, 100 mg BID, 200mg QD and 300mg QD. All doses in all cohorts
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were given 100mg ritonavir. Volunteers were dosed for 14 days. Overall the drug was well tolerated.
Pharmacokinetics demonstrated that QD dosing is most appropriate for ABT-450 with the co-administration
of ritonavir.
Phase II interim results were announced by Enanta at the November 2010 AASLD (American Association for
the Study of Liver Disease). This was a dose escalating, placebo controlled clinical trial with 23 treatment
naïve genotype 1 HCV infected patients, and they were randomized to one of four treatment arms:
50mg ABT-450+ 100mg ritonavir QD (once daily) for three days followed by ABT-450/r + SOC
(standard of care) for 12 weeks, followed by SOC for 36 weeks.
100mg ABT-450+ 100mg ritonavir QD for three days followed by ABT-450/r + SOC for 12 weeks,
followed by SOC for 36 weeks.
200mg ABT-450+ 100mg ritonavir QD for three days followed by ABT-450/r + SOC for 12 weeks,
followed by SOC for 36 weeks.
Three days of treatment with monotherapy ABT-450 resulted in a statistically significant, 4-log1 mean
reduction in HCV RNA across several doses if ABT-450, including 50mg QD, 100mg QD, 200mg QD. After
treatment for four weeks 91.3% of patients receiving ABT-450 in combination with SOC HCV RNA<25 IU/ml.
The safety of ABT-450 PegIFN/RBV combination appeared similar to that of PegIFN/RBV alone.
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BMS-790052 – Bristol-Myers Squibb
Overview
BMS-790052 is an investigational drug being developed by Bristol-Myers Squibb for the treatment of
hepatitis C. BMS-790052 is also the first NS5A inhibitor targeting the hepatitis C virus.
Table 23: An overview of BMS-790052
Brand/Code name BMS-790052

Generic name n/a
Company Bristol Myers Squibb
Mechanism of action NS5a inhibitor
Status Phase II
Clinical
At the 2010 EASL Conference, Bristol-Myers Squibb (BMS) presented data from a Phase IIa study of , BMS-
790052. 48 treatment-naïve Genotype 1 patients were randomized in a 1:1:1:1 ratio to one of four treatment
arms:
BMS-790052 3mg + SOC (Standard Of Care)
BMS-790052 10mg + SOC
BMS-790052 60mg + SOC
Placebo + SOC
cEVR (complete early virologic response) was achieved at week 12 in 48%, 83%, 83%, and 42% of patients,
respectively. During the course of the study there was report of only one severe adverse reaction, and seven
adverse events of grade 3 and 4 were reported during the total study duration.
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Moreover, the company is also conducting an open-label, single-group Phase IIa trial (AI447-017) in 40
chronic HCV-1 patients aged 20-75yr, to assess the efficacy and safety profile of BMS-790052 60mg tablet
in combination with BMS-650032 1200mg tablet. This trial is being conducted in Japan.
BMS is also planning a Phase III study of BMS-790052 with the SOC in treatment naive Black/African-
Americans, Latinos, and White/Caucasians with Hepatitis C. The estimated enrollment in this study is 230
and is expected to start by late 2011.
GS-9190 (Tegobuvir) – Gilead Sciences

Overview
Gilead’s GS-9190 is a non-nucleoside polymerase inhibitor; it binds in a unique position adjacent to the
active site of the polymerase, relative to other compounds previously in development. GS-9190 has
demonstrated relatively modest efficacy in combination with PEG-IFN (Pegylated interferon) and RBV
(ribavirin). Gilead is trying to reduce the duration of therapy in patients treated with a four drug regimen.
Competitive landscape
Table 24: An overview of GS-9190
Brand/Code name GS-9190

Generic name n/a
Company Gilead Sciences
Mechanism of action non-nucleoside polymerase inhibitor
Status Phase II
Clinical
Gilead announced results from a three part Phase I, (randomized, double blind, placebo-controlled dose
escalation) study in treatment naïve HCV genotype 1 patients at the American Association of the Study of
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Liver Disease (AASLD) in November 2010. In Part A, 30 patients were randomized to one of six treatment
arms and treated for one day with the study drug, with seven to ten day follow up.
40mg once daily (QD)
120mg QD
240mg QD
480mg QD
240mg QD with food
placebo.
Mean maximal viral load reductions of 0.69, 0.75, 1.22, 1.07, and 1.07, and 0.0log10 respectively were
observed in the patients. In Part B of the study, 24 patients were randomized to one of the three treatment
arms with an eight-day monotherapy regimen followed by a 10-day follow up period.
40mg (twice daily) BID
120mg BID
placebo.
Mean maximal viral load of 1.61, 1.95, and 0.0log10 respectively was observed, in Part B of the study.
Finally, in Part C of the study, 18 patients were randomized to one of two treatment arms.
40mg BID
placebo.
A mean viral load reduction of 1.61log10 and 0.0log10 was observed, respectively in this cohort. The most
common adverse events in the three arms were headache, diarrhea, and nausea. Patients in the third drug
arm also experienced fatigue and nausea and patients in the fourth-drug arm experienced flu-like symptoms,
fatigue, myalgia and cough. There were two severe adverse reactions, including one case of bursitis and a
hospitalization for vasovagal collapse (which was attributed to gastroenteritis). Elevations in bilirubin were
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seen in all three study arms. The majority of them were Grade 1 or 2 in severity, and none resulted in study
drug discontinuation.
GS-9256 – Gilead Sciences

Overview
GS-9256 is a protease inhibitor being developed by Gilead.
Table 25: An overview of GS-9256
Brand/Code name GS-9256

Generic name n/a
Company Gilead
Status Phase II
Clinical
In November 2010 at AASLD Gilead announced the results of a Phase Ib randomized, double-blind, placebo
controlled trial in of GS-9256 in HCV genotype 1 patients. A total of 32 HCV genotype patients were
randomized to one of the four treatment arms.
150mg QD
300mg QD
450mg QD and
Placebo QD.
Viral load reduction of 1.8, 2.4, and 2.8log10 respectively was observed after single dose administration of
GS-9256 in the treatment arms. The drug was well tolerated in the study.
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In October 2010 at AASLD, Gilead announced data from a Phase IIa study combining GS-9256 and GS-
9190. This study was designed to investigate the outcome of this combination with the current standard of
care for HCV infection. IN this study 46 treatment naive HCV Genotype 1 infected patients were randomized
to one of three treatment arms and were treated for 28 days.
GS-9256 75mg BID + GS 9190 40mg BID
GS-9256 75mg BID + GS 9190 40mg BID + RBV 1000-1200mg QD and
GS-9256 75mg BID + GS 9190 40mg BID + RBV 1000-1200mg QD + peg-interferon alfa 2a.
The median maximal viral load decline of 4.1log10 was observed in the dual therapy arm. The addition of
ribavirin and ribavirin/Peg-IFN enhanced the results with a median maximal RNA decline of 5.1 and 5.7log10,
respectively. Furthermore, 100% of the patients in the four drug regimens achieved an RVR. In late 2010
Gilead began a Phase IIb trial of GS 9190 and GS-9256 combined with Peg-IFN and RBV. The goal of this
trial is to demonstrate if the duration of therapy can be reduced from 48 to 16 weeks. Enrollment in this trial
was completed in April 2011.
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ACH-1625 – Achillion
Overview
ACH-1625 is Achillion’s lead HCV program, which is an investigative NS3/4A protease inhibitor.
Table 26: An overview of ACH-1625
Brand/Code name ACH-1625

Generic name n/a
Company Achillion
Status Phase II
Clinical
In January 2010 Achillion initiated the first half of its randomized double blind, placebo- controlled Phase I
clinical trial for ACH-1625. 18 treatment-experienced genotype 1 HCV patients were randomized to one of
the following three treatment arms for four and a half days
600mg BID
500mg BID
placebo.
Preliminary results demonstrated rapid and robust antiviral effects in HCV infected individuals. All the
enrolled patients displayed greater than 3log10 decrease in viral loads with maximal decreases in 3.94 and
4.25 log10 viral load reduction. Due to the high potency, the company investigated different dosing regimens
in the second part of the Phase I clinical trial. An additional 17 patients were enrolled and randomized into
one of three treatment arms.
600mg QD
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200mg BID
placebo.
In the two treatment arms, a 3.8log10 and 3.86log10 viral load reduction was observed in each treatment
group, respectively. Achillion’s ACH-1625 program differs from conventional clinical trial dosing techniques.
As most of the clinical trial designs incorporate an ascending dosing regimen between the different treatment
arms, ACH-1625 is unique with it’s down dosing decreased frequency clinical trial design. ACH-1625 at
reduced once-a-day dosing allows for reduced potential side-effects, better drug compliance, and future
coformulation opportunities.
In September 2010, Achillion announced the initiation of a Phase II trial with ACH-1625 along with the SOC.
This is a Phase IIa, randomized double blind, placebo controlled trial. The trial is designed to evaluate safety,
tolerability and antiviral activity of oral ACH-1625in combination with SOC. The viral load of patients will be
tested after 28 days (RVR) and after 12 weeks (EVR) of therapy. The study will enroll approximately 120
HCV infected patients. The data from this study is expected by late 2011.
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Chapter 4 Competitive landscape
Summary
Roche with 2010 sales of $1.8bn and Y-o-Y decline of 0.3% lead global hepatitis market in 2010.
Pegasys ($1,577m) and Copegus ($308m) were the major contributors to the company’s 2010 sales.
GSK was the second largest player in the global hepatitis market, and generated sales of $1.6bn in
2010 with a Y-o-Y growth of 5.6% over 2009. The strong performance of GSK was primarily because of
its vaccines which together posted sales of $1.1bn with a 67.4% share of the company’s hepatitis
portfolio.
Merck was the third largest company in the global hepatitis market, with 2010 sales of $1.2bn. The
revenue generation of Merck's marketed hepatitis franchise is heavily dependent on the sales
performance of its viral hepatitis products which, in 2010, registered sales of $1.1bn.
In 2010, Gilead's hepatitis portfolio registered sales of $933m, at a Y-o-Y decline of 1% over the
previous year, placing it as the fourth largest pharmaceutical company within the global hepatitis
market.
Positioned at number five in the global hepatitis market, BMS recorded a Y-o-Y increase in sales of
26.8%, to reach $931m in 2010. BMS’ presence in this market is attributed to the strong sales
performance of its well established product Baraclude.
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Introduction
This chapter focuses on the performance of the five leading players in the global hepatitis market in 2010. It
provides a detailed description of each company's portfolio, key brand analysis, and strategic growth
analysis.
Competitive positioning of the leading players in the global

hepatitis market
Among the players in the global hepatitis market, Roche was the largest company in 2010 recording sales of
$1.8bn at a Y-o-Y decline of 0.3%. Although Roche’s sales declined by 0.3% in 2010 the company retained a
market share of 28.3%. Roche largely owes its market position to the company’s leading viral hepatitis
product, Pegasys. GSK remained the second largest player in the global hepatitis market with 2010 sales of
$1.6bn at a Y-o-Y growth of 5.6%. Merck and Gilead with 2010 sales of $1.2bn and $933m respectively were
the other leading players in the hepatitis market. Table 27 details the performance of the leading players in
the global hepatitis market.
Table 27: Leading players in the global hepatitis market ($m), 2010
Company Sales 2010 ($m) Growth 2009–10 Market share CAGR 2006–10
(%) 2010 (%) (%)
Roche 1,885 -0.3 28.3 3.9
GSK 1,650 5.6 24.8 6.1
Merck & Co. 1,205 -15.0 18.1 -7.3
Gilead 933 -0.7 14.0 0.4
Bristol-Myers 931 26.8 14.0 83.0
Squibb
Dainippon 59 -10.3 0.9 -5.1
Sumitomo
Grand Total 6,664 21.1 100.0 11.9
Source: PharmaVitae BUSINESS INSIGHTS
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Figure 6 illustrates the sales of the leading players in the global hepatitis market ($m), 2010
Figure 6: Sales of the leading players in the global hepatitis market ($m), 2006-2010
2,000
1,800
1,600
1,400
Sales ($m)
1,200
1,000
800
600
400
200
0
Sales 2006 Sales 2007 Sales 2008 Sales 2009 Sales 2010
($m) ($m) ($m) ($m) ($m)
Year
Roche GSK Merck & Co.
Gilead Bristol Myers Squibb Dainippon Sumitomo
Roche
Roche with sales of $1.8bn and Y-o-Y decline of 0.3% was the market leader in the global hepatitis market in
2010. Pegasys ($1,577m) and Copegus ($308m) were the major contributors to the company’s 2010 sales.
Marketed product portfolio

Roche’s focus is limited to viral hepatitis products with no presence in hepatitis vaccines or immunoglobulins.
With a CAGR of 3.9% during 2006–10, Roche led the viral hepatitis products drug class with sales of $1.8bn
in 2010. More recently, Roche has started to divert its research and development efforts towards extended
indications for its flag ship hepatitis brands, Pegasys and Copegus. Pegasys was initially launched across
the EU in 2002 for the treatment of chronic hepatitis C but was subsequently approved for the treatment of
hepatitis B in both the EU and the US in 2005. In addition, Pegasys was also approved by the FDA for the
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treatment of patients co-infected with HIV. Table 28 details the sails performance of Roche’s hepatitis
products in 2010
Table 28: Performance of Roche's hepatitis products ($m), 2010
Products Sales 2010 ($m) Growth 2009–10 Share in CAGR 2006–10

(%) portfolio 2010 (%)
(%)
Pegasys 1,577 -0.6 23.7 2.9
Copegus 308 1.3 4.6 9.9
Total 1,885 -0.3 100.0 3.9
Roche is the market leader in the global hepatitis market and has two marketed products
Pegasys
Pegasys (pegylated interferon) with 2010 sales of $1.6bn at a Y-o-Y decline of 0.6% was the strongest
performing product in Roche’s marketed product portfolio. A large degree of this success can be attributed to
its easy administration, lower levels of depression and its continuous extended indication. Pegasys was
launched across the EU in 2002 for the treatment of chronic hepatitis C and was subsequently approved for
the treatment of hepatitis B in the US and EU in 2005. The sales of Pegasys peaked after November 2008,
when the EMA’s Committee for Medicinal Products for Human Use (CHMP) approved the administration of
Pegasys and ribavirin in patients who had failed interferon alpha/ribavirin combination therapy.
Copegus
In 2010 with Y-o-Y growth of 1.3% Copegus (ribavirin) generated sales of $308m. Japan, Germany, and
Spain were the major growth markets for the product. Copegus’ sales have been declining following its
patent expiry in 2006, however its sales returned to growth after its approval as a combination therapy with
Pegasys for HCV treatment.
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Pipeline analysis
Roche is actively involved in the development of novel compounds for the treatment of hepatitis C. Most of
its compounds in development are in Phase I and II. Mericitabine, a nucleoside analog for chronic HCV
infection, being developed in collaboration with Pharmasset, is presently (as of April 2011) in Phase II.
mericitabine is a prodrug of PSI-6130, an oral cytidine nucleoside analog. A prodrug is chemically modified
form of a molecule which enhances the absorption, distribution and metabolic properties of the molecule.
PSI-6130, the active component of merictiabine, is believed to be an inhibitor of HCV replication, specifically
targeting the HCV RNA polymerase. Roche has a Phase III program planned for late 2011 with filing planned
for 2013.
RG-7227/danoprevir is a potent macrocyclic inhibitor and produced significant reductions in HCV levels in
chronic HCV patients in clinical studies, when administered as monotherapy. It also reduced viral loads to
undetectable levels in most of the study-treated patients when administered in combination with Pegasys
and Copegus, or RG-7128.
Table 29: Roche’s hepatitis R&D pipeline, April 2011
Code/molecule name Indication Phase

RG-7128/ mericitabine Hepatitis C II
RG-7227/ danoprevir Hepatitis C II
RG-7432 Hepatitis C I
Source: Company website BUSINESS INSIGHTS
Strategic and growth analysis

Drivers of growth
Roche continued to lead the hepatitis market in 2010, with a large degree of its success resulting from the
dominance of its hepatitis C product, Pegasys. Pegasys enjoys its leadership position due to its easy
administration, and continuous extended indication. The major drivers for the growth of Roche’s hepatitis
franchise were, the superiority of Pegasys over other treatment options for hepatitis C, significant growth in
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the treatment of hepatitis B, and increased diagnosis and treatment rates in emerging markets. In Japan,
Pegasys is available for hepatitis C treatment; however, it has not been approved for the treatment of
hepatitis B and is presently pending approval for this indication. Pegasys is expected to become
commercially available for HBV treatment in Japan in late 2011and this will generate additional sales for
Roche’s hepatitis portfolio.
Moreover, after the approval Merck’s boceprevir the company has signed a nonexclusive multifaceted R&D
and promotional deal with Merck, in which both the companies will contribute, undisclosed financial and
human resources yet keep their profits separate. According to this deal each firm's sales force will promote
its own respective pegylated interferon product, with Victrelis at the center of that promotion, making this a
profitable situation for both the companies.
Emerging markets are also expected to drive the growth of the hepatitis market for Roche and the company
anticipates that approximately 50% of its sales will be generated from these countries. Roche strategically
employs differential pricing depending upon the market it is catering to. For example, Roche has priced
Pegasys at a special low price for public sector patients in Egypt, as there is a relatively large HCV infected
population in that country but the government only has limited funds available to pay for medication.
Roche has also made significant investments in early stage product development that will boost the
company's market position in the long term. Roche strengthened its R&D efforts by entering into several
licensing and collaborative agreements to complement its in-house activities. Presently, Roche is developing
its HCV products in collaboration with various companies including Pharmasset, InterMune, Ligand, and
Chugai. The approval of a new shortened course of treatment with combination therapy of Pegasys and
Copegus for genotype 2 or 3 HCV infected patients is expected to drive the growth of Roche’s hepatitis
portfolio.
Resistors of growth
Hepatitis has become a very competitive market in recent years with most of the activities centered on the
development of novel therapies for HCV.
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Roche’s key hepatitis C therapy, Pegasys is the leading interferon treatment: Business Insights expects
Pegasys to remain a blockbuster over the forecast period, with a predicted 2016 sales of $1.9bn. There are
currently two branded PEGylated interferon/ribavirin combinations in the market, Merck & Co.’s PegIntron
(PEGylated interferon alpha-2b) which was launched in the US and Europe in 2001, and Roche’s Pegasys
which was launched in the US and Europe in 2002. The duration of treatment with PEGylated interferon is 24
weeks for genotypes 2 and 3 and 48 weeks for genotype 1.
Following the approval Merck’s boceprevir the company has signed a deal with Merck, according to which
both the companies will co-promote its own respective pegylated interferon product, with Victrelis at the
center of that promotion, making this a profitable situation for both the companies.
The launch of superior competitor products such as telaprevir prior to the launch of its pipeline products may
have a negative impact on the sales of its hepatitis portfolio. The termination of the development of R-1626,
a polymerase inhibitor which was under investigation for the treatment for hepatitis C infection demonstrates
the risks in drug development for this indication.
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GSK
GSK is the second largest player in the global hepatitis market and generated sales of $1.6bn in 2010 with a
Y-o-Y growth of 5.6% over 2009. GSK’s position in the market was primarily a result of its vaccines portfolio
which together posted sales of $1.1bn with a 67.4% share of the overall hepatitis portfolio.

GSK’s hepatitis sales are driven by its portfolio of vaccines rather than antivirals and immunoglobulins. In
2010 GSK generated 67.4% of its hepatitis sales from vaccines accounting for $1.1bn at a Y-o-Y growth of
8.3% and a CAGR of 10.7%.
GSK’s hepatitis vaccines portfolio includes Engerix B, Havrix, Twinrix, Hepatyrix and Ambirix. Although,
Zeffix is GSK’s only brand in the hepatitis product drug class, GSK markets Gilead’s Hepsera through an
exclusive licensing agreement, in various territories including China, Japan, South Korea and Taiwan
Engerix-B
Engerix-B, a hepatitis B vaccine was launched in France in 1995 with subsequent launches in multiple
markets, including the US and the five major European markets. It is indicated for immunization against all
serotypes of hepatitis B. Engerix B’s sales grew strongly in the US however, its relatively poor performance
in European markets offset this growth. The increase in Engerix B sales in the US is at least in part a result
of interruptions to the supply of Merck’s Recombivax HB vaccines, due to manufacturing issues.
Commercialization of Dynavax’s Heplisav, will be a potential threat to the continued success of Engerix B in
the coming years.
Havrix
Havrix is indicated for immunization against HAV for individuals older than 12 months of age. Although
Havrix recorded sales declines in all of the major markets of varying degrees, it experienced its largest sales
decline in the US market. The decline was primarily due to the loss of sales to Avxim in the US.
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Twinrix
Twinrix is the only combination hepatitis A and B vaccine on the market and was initially launched in the UK
in January 1997 for use in adults aged over 18 years. By the end of 1999 Twinrix was available in over 30
countries worldwide. In 2009, the product’s sales declined primarily as a result of its relatively weak
performance in Germany and the US markets.
Zeffix
Zeffix (lamivudine), an L-nucleoside analogue, is claimed to be effective in suppressing HBV DNA with ALT
normalization and histologic improvement in both HBeAg-positive and HBeAg-negative patients. Zeffix was
the first marketed antiviral for HBV and thus captured a major share of the market following its
commercialization. In 2010, Zeffix recorded sales of $360m, a witnessing a Y-o-Y sales growth of 7.4%.
Table 29 details the sales performance of GSK's hepatitis products in 2010
Table 30: Performance of GSK's hepatitis products ($m), 2010

(%)
Hepatitis 1,112 8.3 67.4 10.7
vaccines
Zeffix 360 7.4 21.8 9.5
Epivir 178 -10.9 10.8 -13.1
Total 1,650 5.6 100.0 6.1
Pipeline analysis
GSK does not have a very active pipeline for hepatitis products. According to GSK's annual report and
pipeline analysis, the company currently has two (2336805 and 2485852) products in the Hepatitis C product
pipeline which are currently in the first Phase of development. These products are extremely unlikely to
reach the market in the forecast period.
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Table 31: GSK’s hepatitis R&D pipeline, Feb 2011
Code/molecule name Indication Phase

2336805 hepatitis C I
2485852 hepatitis C I

Drivers of growth
GSK continues to evaluate opportunities to help bolster its sales through in-licensing and commercialization
agreements of promising molecules such as Viread. GSK entered into a collaboration with Regulus in
February 2010, under which Regulus will develop and commercialize microRNA therapeutics for HCV, this
will maintain GSK’s presence in innovative new therapies for HCV. MicroRNAs are small RNA molecules that
work by regulating gene expression. The project will focus on miR-122, a liver-expressed microRNA that has
been shown to be a critical endogenous host factor for the replication of HCV. Regulus plans to identify the
clinical development candidate and to file an Investigational New Drug (IND) application in late 2011.
GSK’s agreement with Gilead, for the commercialization of Viread, for chronic HBV in China, is expected to
increase its sales in this emerging market. Under the agreement, Gilead will retain commercialization rights
for Viread in Hong Kong, Singapore, South Korea and Taiwan, while GSK will have the rights in China. It is
believed that the collaboration may be expanded to Japan. The companies will be expected to pay the other
royalties on Viread sales for HBV in their respective territories. Viread, which was launched in 2008, has
already captured a significant market share by taking some of Hepsera’s market share.
Resistors of growth
In the context of a weak pipeline for hepatitis products and therefore being dependent on its current portfolio
GSK is expected to face stiff competition from new competitor product launches and extended indications for
others. Its Engerix B brand may encounter a major threat from Dynavax’s Heplisav, which is currently in
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Phase III clinical trials. The patent expiry of Zeffix (US 2010 and EU 2013), compounded with increasing
resistance levels in HBV to lamivudine are expected to hinder the sales of this product.
Merck & Co.

Merck was the third largest company in the global hepatitis market, with 2010 sales of $1.2bn. The revenue
generation of Merck's marketed hepatitis franchise is heavily dependent on the sales performance of its viral
hepatitis products which, in 2010, registered sales of $1.1bn. Collectively, Pegintron and Rebetol, the main
products in Merck’s viral hepatitis drug class accounted for 79.4% of the company’s hepatitis sales in 2010.
Merck’s hepatitis vaccines in 2010 accounted for a 3.3% share of the portfolio.

The leading brands (Pegintron and Rebetol) in Merck’s hepatitis product portfolio accounted for 79.4% of the
total sales for the company in 2010, with Pegintron (pegylated interferon alpha) providing 61.1% of the
company’s sales followed by Rebetol (ribavirin) and Intron A (interferon alpha) which provided 18.3% and
17.3% of the companies’ sales respectively. Vaccines suffered a setback and showed a Y-o-Y decline of
54.7%. Merck has Recombivax, Comvax, and Vaqta in its hepatitis vaccines portfolio. The sales decline in
the hepatitis vaccines portfolio was primarily because of the falling sales of Recombivax HB, which was due
to Merck’s decision to upgrade manufacturing equipment which led to production delays.
Pegintron
Pegintron is indicated for the long term treatment of hepatitis C in patients aged three years and above.
Pegintron combination therapy with ribavirin was approved for treatment of HCV patients in Europe and the
US in 2001, and was the first pegylated interferon combination therapy to be approved for the re-treatment of
chronic hepatitis C by the EMA and the FDA.
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Rebetol
Rebetol (ribavirin) is a nucleoside analogue indicated for the treatment of chronic hepatitis C for patients
aged three years or older with liver disease. It was approved in 1999 in the EU; while in the US and Japan it
was approved in 2001. In 2010 Rebetol contributed 18.3% of Merck’s hepatitis portfolio’s sales.
Table 32: Performance of Merck's hepatitis products ($m), 2010

(%)
Peg Intron 737 -13.5 61.1 -3.1
Rebetol 220 -11.3 18.3 -8.3
Intron A 209 -9.5 17.3 -3.1
Hepatitis 39 -54.7 3.3 -37.1
vaccines
Total 1,205 -15.0 100.0 -7.3
Note: N/A = not applicable
Pipeline analysis
Victrelis (boceprevir) is a protease inhibitor that has been developed by Schering-Plough (now part of Merck
& Co.). The SPRINT-1 Phase II clinical trial evaluated boceprevir in a seven-arm trial for 48 and 24 weeks.
The drug was approved by the FDA and EMA in May 2011, Victrelis is available in the US, European . More
details about this product could be found here Chapter: Global market analysis; Sec: A new era of treatment
for Hepatitis C virus infection
Vaniprevir is a new product being developed for the treatment of HCV. Vaniprevir is Merck’s second-
generation hepatitis C protease inhibitor candidate and is currently in Phase II trials. In the earlier Phase II
studies, vaniprevir showed potent antiviral activity at all doses with higher rates of RVR in all treatment
groups. Vaniprevir was well-tolerated with no serious adverse events except for incidence of nausea, which
was of mild intensity and short duration.
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Table 33: Merck’s hepatitis R&D pipeline, Feb 2011
Code/Molecule Indication Phase

SCH 503034/Victrelis/ Hepatitis C Recently approved
Boceprevir
MK-7009/vaniprevir Hepatitis C III

Drivers of growth
Merck's biggest advantage over its competitors is its hepatitis pipeline. Victrelis (boceprevir) is a protease
inhibitor that has been developed by Schering-Plough (now part of Merck & Co.). The SPRINT-1 Phase II
clinical trial evaluated boceprevir in a seven-arm trial for 48 and 24 weeks. The drug was approved by the
FDA and EMA in May 2011, Victrelis is available in the US and European markets.
Following the approval Merck has signed a nonexclusive multifaceted R&D and promotional deal with Roche,
in which the two companies will contribute undisclosed financial and human resources, yet keep their profits
separate. According to this deal each firm's sales force will promote its own respective pegylated interferon
product, with Victrelis at the center of that promotion, making this a profitable situation for both the
companies.
Furthermore, Merck’s Pegintron therapy in combination with Rebetol for re-treatment of chronic hepatitis C
had been approved in India, one of the key emerging markets where over 12m people are infected with HCV.
Vaniprevir, a follow-on HCV protease inhibitor to boceprevir, is currently in Phase III. The efficacy data in the
Phase IIa trials was promising with over 80% of the patients having HCV RNA below detection levels on day
28.
Resistors of growth
Merck’s hepatitis products, Pegintron and Rebetol are facing tough competition from Pegasys and Copegus.
Recombivax HB’s sales declined due to manufacturing issues. The company has recently signed an
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agreement with Roche according to which both the companies will co-promote respective pegylated
interferon product, with Victrelis at the center of that promotion, making this a profitable situation for both the
companies.
In 2008, the FDA warned Merck on its non-compliance with Good manufacturing Practices (GMP) for
vaccines, which led Merck to upgrade its manufacturing equipment thus delaying its production of
Recombivax HB vaccines. GSK filled the void created by Merck with its Engerix B vaccines and it will be a
major challenge for Merck to regain its market share.
Merck & Co’s vaccines portfolio lacks combination vaccines for hepatitis A and B, which is a disadvantage
for the company as compared to its strongest competitor GSK. To fill the void, Merck entered into an in-
licensing agreement with Dynavax in November 2007 however, this collaboration ended in 2008. Following
this setback, Merck & Co is expected to lose market share to GSK’s Twinrix and the company’s hepatitis
vaccine franchise will continue to have declining sales over the next few years with no present activity in the
hepatitis vaccines pipeline.
Gilead
In 2010, Gilead's hepatitis portfolio registered sales of $933m, at a Y-o-Y decline of 1% over the previous
year, placing it as the fourth largest pharmaceutical company within the global hepatitis market. Hepsera was
the only hepatitis product from Gilead prior to Viread’s approval for hepatitis B treatment in 2008. Viread has
performed strongly since gaining its hepatitis B indication.

The performance of Gilead's marketed portfolio was heavily dependent on Hepsera’s performance alone
until 2008. However, the addition of Viread to Gilead’s hepatitis product portfolio is expected to strengthen its
presence in the hepatitis market
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Table 34: Performance of Gilead's hepatitis products ($m), 2010

(%)
Viread 732 9.6 78 1.5
Hepsera 201 -26.0 22 -3.4
Total 933 -1 100 0.4
Viread
Viread was approved for the treatment of HIV-1 infection in combination with other antiretroviral agents in
2001. Following its approval for the treatment of HBV it gained significant market share from Hepsera and
other brands. Viread is presently approved for HBV treatment in the US, EU, Turkey, Australia, New
Zealand, and Canada. Moreover, in 2009, Gilead collaborated with GSK to commercialize Viread in Asian
markets including China, Hong Kong, Singapore, South Korea and Taiwan. While Gilead retained the
exclusive rights for commercialization of Viread for HBV in Hong Kong, Singapore, South Korea, and Taiwan,
GSK has the exclusive commercialization rights in China. Moreover, the agreement may also be extended to
include commercialization of Viread in Japan and other countries in future. In 2010, Viread generated sales
of $732m for its hepatitis indication, exhibiting a Y-o-Y growth of 9.6%. Although, the patent expiry of Viread
is later than its nearest competitor Baraclude, Viread is expected to lose some market share to generic
Baraclude as physicians may switch first-line patients from branded Viread to generic formulations of
entecavir.
Hepsera
Hepsera, a diester prodrug of adefovir, is the first nucleotide analogue approved for the treatment of chronic
hepatitis B. Hepsera was approved in 2002 in the US and captured significant market share following its
launch. Hepsera's superior resistance profile and efficacy in lamivudine-resistant patients were the key
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drivers of its growth. In April 2002, Gilead entered into a licensing agreement with GSK to commercialize
Hepsera in Asia, Latin America and other territories.
In 2010, Hepsera generated sales of $201m, exhibiting a Y-o-Y decline of 26%. The decline in sales was
primarily due to its poor sales performance in the US following the approval of Viread for HBV.
Pipeline analysis
The future success of Gilead’s hepatitis C franchise is dependent on the successful clinical outcome of the
company’s Phase II compounds GS-9190, GS-9256, and GS-9451. GS-9190 is a non-nucleoside
polymerase inhibitor that is being evaluated for treatment-naive patients infected with HCV genotype 1. The
Phase I studies of GS-9190 observed that single doses of GS-9190 were well tolerated with no major
treatment-limiting adverse events. The adverse events recorded were mild, with the exception of one
moderate headache. GS-9256 is a protease inhibitor indicated for the treatment of HCV. Presently, Gilead is
focused on evaluating the efficacy of the combination of these compounds.
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Table 35: Gilead’s hepatitis R&D pipeline, Feb 2011
Code/molecule Indication Phase

GS-9190 Hepatitis C II
GS-5885 Hepatitis C I
GS-9620 Hepatitis C/B I
GS-6620 Hepatitis C I
GS-9451 is again an HCV protease inhibitor, data from the successful Phase I clinical studies showed that
the median half life of GS-9451 was 14 to 17 hours, which will allow for once-daily dosing of patients. The
only adverse events reported that occurred in at least two patients were headache and dyspepsia.

Drivers of growth
Gilead’s expanded indication approval of Viread for HBV has strengthened its position in the hepatitis B
market. Viread has already been approved in major markets for HBV and its collaboration with GSK to
commercialize Viread in Asian markets will help it develop a strong presence in China, Hong Kong,
Singapore, South Korea and Taiwan. Gilead has strategically priced Viread at a lower price than Hepsera
and other competitive products with an aim to capture a sizeable market share.
The successful commercial launch of its pipeline candidates would mark the company’s entry into the most
lucrative hepatitis indication, HCV. Gilead has altered its pipeline strategy; the company is now focusing its
resources on the development of GS-9190 in combination with GS-9256, instead of advancing GS-9190
monotherapy to an accelerated Phase III program. The antiviral combination may be a paradigm shift in the
treatment for HCV with limited or no use of the SOC.
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Resistors of growth
In order for Gilead to maintain profitable hepatitis franchise growth, it must obtain approval for the
combination of GS-9256 and GS-9190 as well as maintaining a sustained sales performance from Viread,
thereby minimizing the negative impact of the Hepsera’s declining sales and its patent expiry in 2014.
Hepsera’s sales fell by 26% in 2010. The decline is expected to be steeper in coming years as generic
erosion will further erode the value of its franchise. Although the patent expiry of Viread is not until 2017,
Baraclude, Viread’s closest competitor is losing its exclusivity in 2015/16. Viread is expected to lose its sales
due to the commercialization of generic Baraclude, as physicians may switch first-line patients from branded
Viread to generic formulations of entecavir.
Bristol-Myers Squibb
Positioned at number five in the global hepatitis market, BMS recorded a Y-o-Y increase in sales of 26.8%,
to reach $931m in 2010. BMS’ presence in this market is attributed to the strong sales performance of its
only hepatitis therapy, Baraclude.

Baraclude is the only marketed product from BMS in the global hepatitis market. Baraclude is an antiviral
reverse transcriptase inhibitor launched specifically for the treatment of chronic hepatitis B. Baraclude was
approved by the FDA in 2005 for the treatment of chronic hepatitis B infection. With an aim to establish it as
the preferred first as well as second-line therapy for chronic hepatitis B infections and expand the
prescription base, BMS is evaluating combination therapies of Baraclude with Zeffix, Hepsera, and Tenofovir.
Presently, it is one of only two products (the other being Viread) recommended for first-line HBV therapy by
the American Association of the Study of Liver Disease (AASLD) and the European Association of the Study
of the Liver (EASL) and has subsequently taken significant market share from other antivirals such as Zeffix
and Hepsera. Recently, Baraclude was approved for a new indication; the treatment of patients with chronic
hepatitis B with decompensated liver disease. The approval was granted following the result of an ongoing
Phase IIIb clinical trial which demonstrated greater viral suppression as compared with adefovir.
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With a CAGR of 83.0% during 2006–10, Baraclude generated sales of $931m in 2010, with a Y-o-Y growth
of 26.8% in 2010. In the face of competition from generic formulations post its loss of market exclusivities in
2015/16 across all 7MM, Baraclude is expected to lose market share although this is at the very end of the
forecast period.
Table 36: Performance of BMS’ hepatitis products ($m), 2010

(%)
Baraclude 931 26.8 14.0 83.0
Pipeline analysis
BMS has three compounds in its hepatitis pipeline; all are indicated for HCV and are presently in Phase II
clinical trials. PEG-Interferon lambda (PEG-rIL-29), a novel interferon indicated for hepatitis C, is being co-
developed by BMS and ZymoGenetics. PEG-Interferon lambda is a member of the Type III lambda interferon
family, generated in response to viral infection by the immune system. Although, PEG-rIL-29 and interferon
alpha have a similar mechanism of action, PEG-rIL-29’s receptor has a more restricted distribution than the
interferon alpha receptor. This may give the product an improved safety and tolerability profile. PEG-rIL-29 is
being tested as a single agent and in combination with ribavirin in treatment-experienced patients with
genotype 1 HCV.
An NS5A inhibitor is under clinical investigation for the treatment of HCV infection in patients with chronic
genotype 1 HCV infection. NS5A is being developed in combination with pegylated interferon and ribavirin as
oral therapy for the potential treatment of hepatitis C infection. In April, 2010, a double-blind, placebo-
controlled, Phase IIa study concluded that NS5A demonstrated higher rates of eRVR, RVR and complete
early virologic response (cEVR) in combination with pegylated interferon and ribavirin when compared with
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pegylated interferon and ribavirin alone. NS3 is being developed as an once a day oral formulation for the
treatment of HCV.
Table 37: BMS’ hepatitis R&D pipeline, Feb 2011
Code/molecule Indication Phase

PEG Interferon λ/ PEG- Hepatitis C II
Interferon lambda
HCV/NS5A inhibitor Hepatitis C II
HCV NS3 protease inhibitor Hepatitis C II
NS5B inhibitor Hepatitis C II

Drivers of growth
The main drivers of BMS’ future growth will be its pipeline products. HCV/NS5A inhibitor, which is being
developed in combination with PEG and RBV, has shown higher rates of eRVR, RVR, and cEVR in its Phase
IIa study as compared with PEG and RBV alone. BMS has further strengthened its pipeline through the
acquisition of ZymoGenetics in September 2010. BMS has formed a collaboration to develop PEG-interferon
lambda, a novel interferon in Phase IIb development for the treatment of hepatitis C infection. The acquisition
provided BMS full ownership of the compound and is expected to strengthen BMS hepatitis C portfolio.
Resistors of growth
BMS’ hepatitis franchise will face generic competition to Baraclude, the only marketed product in its hepatitis
franchise, losing its patent protection in 2015/16. Thus the growth of BMS’s hepatitis franchise would depend
on the regulatory approval and successful commercial launch of its pipeline products to maintain strong and
healthy revenue growth for its hepatitis franchise.
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Appendix
Scope
The Hepatitis Market Outlook to 2016 provides comprehensive coverage of the hepatitis market,
incorporating a disease overview and detailed epidemiological analyses of the therapy area. This report
makes a wide-ranging assessment of the marketed product portfolio, R&D pipeline, market-share data, sales
forecasts and competitive landscape of the major players. In addition to this, the report provides an in-depth
analysis of the two recently launched Hepatitis C products that have changed the treatment modality for
hepatitis C viral infection. The report highlights the key market and R&D trends that may influence treatment
sales and provides a thorough analysis of the competitive dynamics of leading brands, in order to enable the
reader to identify growth brands, key drug classes and leading players through to 2016.
Methodology
Market size methodology
The leading products and companies in the global hepatitis market were identified using company-
reported sales sourced from PharmaVitae, company annual reports, investment research reports and
journals. Where applicable, reference was also made to multiple secondary resources, in-house
databases, scientific journals, and analyst reports to derive additional insights into currently marketed
drugs.
The ATC codes relevant to hepatitis that have been included in this report for market sizing are J5B1
(viral hepatitis products), J6H4 (hepatitis immunoglobulin), J7A3 (hepatitis vaccines) and J5C.
Epidemiology
The epidemiology of relevant indications is derived from the cohort studies referenced in the report.
The epidemiology forecast is extrapolated based on the cohort studies and forecast population
changes sourced from the US Census Bureau. The forecast does not take into account any genetic,
118
cultural, environmental, social, or racial changes to population demographics that could have an impact
on disease epidemiology in the various markets.
Market forecast
To forecast future market sizes, regression analysis was used to establish a forward-looking baseline
trend. This baseline was then adjusted to take into account future events that are not reflected by the
historical trend. Examples of these events include:
The launch of new products, with peak sales forecasts based on expected patient numbers and
expected price.
Patent expirations, generic competition, any ongoing patent litigation, or restricted label warnings (black
box warnings).
Product extensions based on superior administration/dosage profiles, expanded indications, or post-
marketing studies.
For biologics, the likely entry of biosimilars/follow-on biologics in the developed (mostly the US and EU)
and developing countries, and the competitive dynamics that these may introduce post-approval.
Special consideration is also given to the impact of first-in-class, novel drugs that result in a paradigm
shift in the treatment algorithm in therapy areas and diseases with significant unmet medical need.
119
Glossary/Abbreviations
Glossary
Figure 7 illustrates the patient response to drug treatment.
Figure 7: Response of patients to drug therapy
Source: Hepatitis C Media Handbook Vertex BUSINESS INSIGHTS
Breakthrough- Detection of HCV RNA in patients during treatment after an undetectable HCV RBA in the
initial phase of treatment
Extended Rapid Virological Response (eRVR)- Presence of undetectable HCV RNA at week 4 and 12 after
drug treatment. Measure of higher chance of cure rates
HCV Antibody- Presence of antibody specific to HCV in the blood indicating infection, though unclear if it is
acute, chronic or past infection
HCV RNA- Genetic material found in current HCV infected patients
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Intermediate barrier to resistance- The development of partial resistance to the mutant viral genome
(quasispecies) that develops high genetic variability and susceptibility to the anti-viral drugs
Null response- Failure of patient response to drug to reduce the HCV RNA by 100 times (2log10) after 12
weeks of treatment
Partial response- A decrease in 2log10 in HCV RNA but failure to produce undetectable HCV in blood after
24 weeks of treatment
Relapse- Detection of HCV RNA in patients after treatment ends
Sustained Virological Response (SVR)- Undetectable HCV RNA, 24 weeks after drug treatment
Warehoused patients- Patients that have experienced partial response, null response or relapse with prior
standard of care therapy or are treatment naïve patients unwillingly to take the current drugs due to
occurrence of adverse effects and low response rates
Abbreviations
5EU: 5 major countries in Europe- UK, Spain, France, Italy and Germany
7MM: 7 major markets-5EU, US and Japan
AASLD: American Association of the Study of Liver Disease
CHMP: Committee for Medicinal Products for Human Use
DNA: deoxyribonucleic acid
HAV: hepatitis A virus
HBsAg: hepatitis B surface antigen
HBV: hepatitis B virus
HCV: hepatitis C virus
121
HDV: hepatitis D virus
HEV: hepatitis E virus
IgG: immunoglobulin G
IgM: immunoglobulin M
NS 3/4A: non-structural 3/4A
PCR: Polymerase chain reaction
PEG: polyethylene glycol
PI: protease inhibitors
RNA: ribonucleic acid
SVR: sustained virological response
UNICEF: United Nations Children's Fund
US FDA: Unites States Food and Drug Administration
WHO: World Health Organization
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–results of a nationwide survey. Alimentary Pharmacology and Therapeutics 26 (4) 565-576.
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The Hepatitis Market Outlook to

Reference Code: BI00042-020

opinions and do not necessarily reflect the views/opinions of the Publisher.

About the author 2

Chapter 1 Overview and epidemiology of hepatitis 17

Chapter 2 Global market analysis 38

Hepatitis Vaccines – GSK 43

Baraclude (entecavir) – BMS 45

PegIntron (peginterferon alfa-2b) – Merck 46

Viread (tenofovir disoproxil fumarate) – Gilead Sciences 46

Copegus (ribavirin) – Roche 47

Rebetol (ribavirin) – Merck 47

Hepsera (adefovir dipivoxil) – Gilead 48

A new era of treatment for Hepatitis C virus infection 49

Protease inhibitors (PIs) 50

The competition between Incivek and Victrelis 55

Factors governing the market space of Incivek and Victrelis 57

Product life cycle and forecast 62

Hepatitis market drivers, challenges, and resistors 64

Challenges in bridging the treatment gap impedes forecast market uptake 65

Drugs with reduced adverse effects change the treatment modality 67

Launch of biosimilars and generics will slow market growth 68

Development program for therapeutic intranasal vaccine for treatment of hepatitis B 70

Novartis discontinues the development of Joulferon/Zalbin on safety concerns 70

GSK signs microRNA deal with Regulus for HCV 71

Government initiatives to curb the incidence of hepatitis 71

Vertex collaborates with Alios for hepatitis portfolio 72

Biosimilars and generics 72

Chapter 3 Pipeline analysis 75

Multi-billion dollar opportunity for a successful drug class 77

The treatment-failure population presents a significant opportunity 78

Profiles of the key pipeline products 79

BI 201335 – Boehringer Ingelheim 81

Vaniprevir (MK-7009) – Merck 83

Debio 025 – Novartis/Debiopharm 84

Danoprevir (ITMN-191/RG7227) – Roche 86

RG-7128 – Roche/ Pharmasset 88

GS-9190 (Tegobuvir) – Gilead Sciences 92

GS-9256 – Gilead Sciences 94

Chapter 4 Competitive landscape 98

Pipeline analysis 102

Strategic and growth analysis 102

Strategic and growth analysis 107

Merck & Co. 108

Pipeline analysis 109

Strategic and growth analysis 110

Pipeline analysis 113

Strategic and growth analysis 114

Bristol-Myers Squibb 115

Pipeline analysis 116

Strategic and growth analysis 117

Market forecast 119

Overview and epidemiology of hepatitis

necessary to identify the hepatitis type.

hepatitis B cases is 350m and hepatitis C is 170m.

are at high risk of developing other forms of hepatitis infection.

market share of 27.4%.

access to healthcare facilities resulting in a significant un-diagnosed and un-treated population.

share of 24.3% in 2010.

profile compared to the currently marketed products.

treatment-failure population, representing approximately 40% of the total hepatitis C infected

population, is expected to present a significant commercial opportunity.

performance of its well established product Baraclude.

necessary to identify the hepatitis type.

fatigue, anorexia, muscle or joint pain

fever (occasional and mild).

liver failure which develops in about 20–25% of cirrhotic individuals