Achillion Pharmaceuticals, Inc. Fourth Quarter 2013 Earnings Uneventful; Nuke Data in Third Quarter 2014 Is Key Catalyst of the Year


Achillion Pharmaceuticals, Inc.  reported net loss for the quarter of $13.4 million with a per-share loss of $0.14 versus our estimates of $14.7 million and $0.15, respectively.  As we have discussed in previous publications, the HCV Holy Grail should contain a nuke, and therefore the nuke ACH-3422 will make or break Achillion’s chance to be relevant in the HCV race.

Like Idenix (IDIX $6.63; Outperform), Achillion has elected to launch the first study of its nuke candidate outside the United States; the study will be initiated during second quarter 2014, with initial seven-day viral kinetic data expected during third quarter. We note that preclinical ACH-3422 data has demonstrated similar potency to Gilead’s (GILD $79.58; Outperform) nuke Sovaldi (sofosbuvir). Given the estimated timelines, ACH-3422 appears to be about four-six months behind Idenix’s uridine-based nuke IDX21437.

The Phase II study will examine the combination for eight weeks or less in genotype 1 treatment-naïve HCV patients. We believe the study provides an interesting approach to 1) elucidating ACH-3102’s safety profile when combined with a nuke; 2) evaluating ACH-3102’s efficacy prospects when incorporated in a six- or eight-week regimen with a nuke; and 3) gaining experience ahead of combining ACH- 3102 with Achillion’s proprietary nuke ACH-3422.

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