Sweden's Medivir Strengthens Executive Team, Aims To Become Profitable Specialty Firm

With its hepatitis C protease inhibitor progressing in Phase III, Medivir starts to transform itself into a profitable specialty pharmaceutical company.

Sweden's Medivir AB has strengthened its executive team and sold off an unwanted generics business that came with recently acquired BioPhausia AB, as it continues to metamorphose from research boutique to profitable research-based specialty company, a move driven by the promise of its investigational hepatitis C therapy, TMC435, first launches of which are expected in late 2013.

Three global Phase III trials being conducted with TMC435 by licensee Tibotec Pharmaceuticals, part of Johnson & Johnson, have also now completed patient enrolment, Medivir announced Aug. 31. The trials are QUEST 1 and QUEST 2, in treatment-naive hepatitis C patients, and PROMISE, in treatment-experienced, relapsed hepatitis C patients. They are evaluating the addition of once-daily oral doses of TMC435 to the current standard of care, pegylated interferon and ribavirin, for chronic infection with hepatitis C.

Medivir entered into a collaborative partnership with Tibotec involving hepatitis C protease inhibitors in 2004, worth around €60 million in milestones to Medivir, plus royalties. Tibotec has worldwide development and marketing rights except for the Nordic countries, where Medivir retained marketing rights.

Other clinical trials of TMC435 also are underway. In July, Medivir said Tibotec intended to start a Phase II trial of an interferon-free combination therapy, involving TMC435 and Pharmasset Inc.'s nucleotide polymerase inhibitor, PSI-7977, with and without ribavirin (Also see "J&J's TMC435 Joins The Pharmasset Club" - Pink Sheet, 6 Jul, 2011.)). In June, a study evaluating a combination of TMC435 with Tibotec's non-nucleoside polymerase inhibitor, TMC647055, started, as did Phase Ib trials with Medivir's own nucleoside polymerase inhibitor, TMC649128.

Jefferies analysts noted that, despite launching two to three years after competing products, TMC435's impressive profile could well bring it a 25% market share and peak sales of $4.2 billion. While noting that two competing hepatitis C protease inhibitors had just been launched, Vertex Pharmaceuticals Inc./J&J's Incivek (telaprevir) and Merck & Co. Inc.'s Victrelis (boceprevir), the analysts pointed out that Phase IIb data have shown TMC435 to have impressive tolerability, broader antiviral activity and potentially higher cure rates. Medivir also believes that TMC435 is a next-generation product to telaprevir and boceprevir (Also see "Vertex Takes Early Lead In HCV Protease Inhibitor Sales" - Pink Sheet, 29 Jul, 2011.)).

Nordic Rights Retained

Being in a position to exploit Nordic marketing rights to TMC435 is underpinning Medivir's business strategy, which to begin with involves appointing commercial expertise to the executive team. On Aug. 31, Maris Hartmanis, previously CEO of BioPhausia, was appointed to the newly created positions of Deputy CEO and Chief Operating Officer, effective Sept. 1, while Medivir's Chief Scientific Officer, Bertil Samuelsson, moved to a new strategic role, Chief Scientific Advisor.

Operational R&D responsibilities will now be led by Charlotte Edenius, who becomes Executive Vice President of Research and Development, having previously been Medivir's VP R&D. And Jens Kristensen, formerly Vice President Clinical Development at Karo Bio AB, has been recruited as Executive Vice President Clinical, to head up the clinical unit at Medivir.

Hartmanis will remain CEO of BioPhausia, which was acquired by Medivir on May 31 for SEK 586.5 million ($92 million), in a move described by Medivir's CEO Ron Long as an "important first step to becoming an integrated, profitable biopharma company", in an Aug. 31 earnings call (Also see "Medivir To Acquire BioPhausia's Commercial Platform To Market HCV Drug" - Pink Sheet, 11 Apr, 2011.)).

BioPhausia brings a profitable product portfolio to Medivir, which includes the analgesic Citodon (codeine plus acetaminophen) and the laxative Laxabon (macrogol), but more importantly brings a commercial infrastructure, including regulatory, logistical and marketing expertise, Long remarked.

Medivir is looking to acquire Nordic marketing rights for other products so that it is not reliant on TMC435, a logical business strategy considering the competition that is emerging in the hepatitis C sector, with more than 50 different new compounds under early investigation by other biotech and pharmaceutical companies (Also see "Hepatitis C Marketing: Applying Primary Care Tactics To Specialty Products " - In Vivo, 1 Jun, 2011.).

The ideal combination of hepatitis C antivirals also is being sought, particularly one that is not associated with the side effects seen with the current standard of care, peginterferon and ribavirin. Long is adamant that Medivir's TMC435 likely will be the anchor, or cornerstone, of any combination therapy. However, that may not necessarily turn out to be the case, and having other profitable products, like BioPhausia's proprietary products, will be key to sustaining the company.

Generics Sold To BlueFish Pharma

Medivir is retaining Biophausia's proprietary business and its Cross Pharma parallel-import unit, but announced Aug. 26 that it was selling the BMM Pharma generics business to another Swedish company, Bluefish Pharmaceuticals AB, for SEK 37 million. Bluefish was set up in 2005 to become a pan-European generics company, and is 34% owned by the Swedish investment company, Farna Invest AB.

In the second quarter of 2011, Medivir made a pretax profit of SEK 164.1 million from revenues of SEK 322.9 million. Revenues included a one-off payment of SEK 278.9 million for selling the U.S., Canadian and Mexican rights to Xerclear/Xerese to Meda AB, and one month of BioPhausia sales, of SEK 42.4 million.

- John Davis ([email protected])