Novartis pays $440m for preclinical hepatitis C drug

The compound covered by the license is EDP-239, an inhibitor of the viral protein NS5A which has become a hot topic in hepatitis C research thanks to its apparently critical role in viral replication.

Enanta was recently granted approval by the FDA to start clinical trials of the drug and under its agreement with Novartis the Swiss pharma will now take responsibility for bringing the drug through clinical development and onto the market.

The size of the deal - which includes $34m in upfront payments - reflects the enormous interest by pharmaceutical companies in developing treatment regimens for hepatitis C that do not rely on the use of injectable interferon-based therapies

In addition to the upfront payment, US-based Enanta stands to receive up to $406m in development, regulatory and commercial milestones, as well as double-digit royalties on sales if EDP-239 reaches the market.

"Novartis is a recognised leader in the field of HCV, and access to its global expertise combined with our shared vision for commercialising HCV therapies will support the successful development and commercialisation of products targeting NS5A," said Jay Luly, Enanta's president and chief executive.

Some 170m people worldwide are affected by the virus and market researchers predict the availability of simpler, oral regimens consisting of directly-acting antivirals used in combination could expand annual HCV drug sales to more than $20bn in the coming years.

Given the scale of the opportunity it is unsurprising that Novartis has been pursuing research in hepatitis C for years, but to date the Swiss firm has not launched a product specifically to treat the disease.

At the moment its lead candidate is first-in-class cyclophilin inhibitor DEB025 (alisporivir), licensed from Swiss biotech Debiopharm, which works by blocking part of the replication process within the NS5A region. Promising phase II data on this product were presented last year.

But the addition of EDP-239 will bolster an HCV pipeline at Novartis that has seen a number of disappointments in recent years.

In 2010 the company stopped development of its long-acting interferon product albinterferon alfa-2b, and also suffered disappointments with valopicitabine, a polymerase inhibitor licensed from Idenix, as well as ANA975, a toll-like receptor 7 agonist licensed from Anadys Pharma.

At the moment the lead NS5A inhibitor coming through development is Bristol-Myers Squibb's daclatasvir (BMS-790052), which has reached phase III testing.

Compounds in earlier stages of clinical development include Achillion's ACH-2928, AstraZeneca's AZD-7295, Idenix' IDX719 and Presidio's PPI-461 and PPI-688.