Merck Plans to Launch Innovative HCV Combination Therapy



Grazoprevir and elbasvir combination therapy

Merck’s (MRK) grazoprevir/elbasvir combination therapy aims to treat the most difficult-to-treat hepatitis C (or HCV) patients belonging to genotype one, four, and six including those suffering from liver cirrhosis as well as those afflicted by other co-morbidities such as HIV and end-stage renal diseases. According to Merck, “Grazoprevir/elbasvir is Merck’s investigational, once-daily, single-tablet combination therapy consisting of grazoprevir (NS3/4A protease inhibitor) and elbasvir (NS5A replication complex inhibitor).”

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Difficult-to-treat HCV patients

The above diagram shows that by 2020, the number of patients with chronic HCV and liver cirrhosis will be more than 1 million, providing a strong growth opportunity to Merck’s innovative HCV therapy. Grazoprevir/elbasvir combination therapy aims to satisfy the unmet demand of an interferon-free, ribavirin-free HCV therapy, which helps to cure even those HCV patients suffering from cirrhosis. Additionally, Merck has projected that about 450,000 more HCV patients will be covered by health insurance between 2014 and 2020. Increasing insurance coverage results in an increase in patient access to innovative drugs, leading to an increase in sales and profits for these drugs.

The strong market dynamics have led to the entry of several other biotechnology and pharmaceutical players such as Gilead Sciences (GILD), AbbVie (ABBV), and Bristol-Myers Squibb (BMY) in the HCV space.

Hepatitis C

The Hepatitis C virus is classified into six genotypes. Each genotype is further divided into subtypes. According to Hepatitis Central, “A genotype is a classification of a virus based on the genetic material in the RNA (ribonucleic acid) strands of the virus.” The majority of existing HCV drugs on the US market focus only on genotype one patients. Thus, if approved, Merck’s new HCV combination therapy, which targets genotype one, four, and six, is expected to rapidly capture significant market share.

Investors can get exposure to grazoprevir/elbasvir combination therapy while reducing company-specific risks by investing in the iShares Core S&P 500 ETF (IVV). IVV invests 0.85% of its holdings in Merck.


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