Thanks to its strong balance sheet following the out-licensing deal with Janssen in May 2015, Achillion appears to be well positioned to see its home-grown Factor-D program at least through the mid-stages of a clinical development program. Janssen’s equity purchase has helped to provide the financial muster needed for the company to invest in its early-stage small molecule therapeutics research platform, with its complement Factor D program at the forefront and on the verge of clinical testing.
Achillion has filed a lead drug candidate in its Factor D program, ACH-4471, with FDA approval for development in paroxysmal nocturnal hemoglobinuria (PNH), also spelling out its aim to begin Phase I/IIa testing in PNH and another undisclosed rare disease later this year. Initiated in-house, the Factor-D program was highlighted in a symposium in early December at the American Society for Hematology (ASH) when the value of Factor-D as a validated and druggable target was outlined. Management has indicated that further Factor-D drug candidates will be put forward with alternative attributes enabling the targeting of additional indications, such as compounds allowing ocular administration in eye disease.
Through its partner Janssen, Achillion is developing a triple-regimen short-duration, highly effective, pan-genotypic Hepatitis C (HCV) treatment with promise to be best in class. Janssen aims to initiate Phase III development in the early part of 2017. Two trials are underway with a once-daily combination of Achillion’s odalasvir (ACH-3102), Janssen’s simeprevir (approved and previously marketed as Olysio) and Janssen’s ALS-335: a Phase I drug interaction study in healthy volunteers and a Phase IIa trial in ~60 patients with treatment-naïve genotype 1 HCV with treatment durations of eight, six, or four weeks. The Phase II primary endpoint is safety and secondary endpoints pharmacokinetics, SVR and viral resistance.
Our valuation moves to $2.26bn ($16.5/share from $16.7) due to a change in estimated cash. We do not yet include Achillion’s Factor D program in our valuation but will do so on the start of Phase I trials in Q116. Despite the recent share price weakness, the company’s significant cash cushion coupled with the anticipated positive newsflow related to the progress of the HCV development program and the clinical start of the Factor-D trials should provide support for the shares over the coming year.