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Merck Abandons New Hepatitis C Drugs Amid Crowded Market

Merck Abandons New Hepatitis C Drugs Amid Crowded Market


 By Cara Lombardo 

Merck & Co. is halting development of new hepatitis C treatments after reviewing their effectiveness and determining an abundance of treatments, including its own drug, Zepatier, were already available.

The market to treat the liver disease afflicting 3.5 million Americans has become increasingly competitive, prompting Merck and others to focus their attention elsewhere.

Johnson & Johnson's Janssen unit earlier this month discontinued development of its own hepatitis C treatment, which analysts said had good but not competitive results. The company said it would focus on hepatitis B treatments, an area where there are fewer options.

Merck, which made its decision after Phase 2 trials of two combination regimens, said Friday it will study Zepatier in efforts to bring it to more patients.

The FDA approved the use of Zepatier, a once-daily, single-tablet combination of two drugs, grazoprevir and elbasvir, to treat adults with two types of hepatitis C in 2016.

Merck shares, up 9.2% so far this year, were inactive in premarket trading.

Merck recently recorded a $2.9 billion impairment charge related to research and development of uprifosbuvir, the antiviral used in the abandoned regimens, after lowering its value to $240 million due to competition. Merck had acquired the drug-development program through its purchase of Idenix Pharmaceuticals Inc. for $3.9 billion in 2014.

Gilead Sciences Inc., the market leader in hepatitis C, derived 40% of revenue in its latest quarter from hepatitis C treatments. But those sales have been declining since 2015 as pricing pressures increase.

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