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FDA rescinds ‘breakthrough’ status for Merck’s hepatitis C drug

February 4, 2015, 8:13 PM UTC
RAHWAY, NJ - NOVEMBER 29: A man walks by a sign at a Merck plant November 29, 2005 in Rahway, New Jersey. U.S. pharmaceutical giant Merck, announced plans to cut some 7,000 jobs, or 11 percent of its global workforce, by the end of 2008. (Photo by Marko Georgiev/Getty Images)
Photograph by Marko Georgiev — Getty Images

The U.S. Food and Drug Administration will rescind Merck’s breakthrough designation” for an experimental hepatitis C treatment, the pharmaceutical giant said Wednesday. The move is the first time the FDA has rescinded a breakthrough designation, according to the agency’s public data.

A breakthrough designation is a program offered by the FDA to speed access to experimental drugs. It lets drugmakers work closely with regulators to analyze clinical trials and expedite the application process. Such a designation is designed for innovative new treatments that represent a “substantial improvement” over current available therapies, according to the FDA’s description.

Merck’s (MRK) hepatitis C treatment is up against two new treatments for the disease that hit the market in the last year, one by Gilead Sciences (GILD) and another by AbbVie (ABBV). Both new treatments have higher cure rates and fewer side effects than previous drugs on the market.

Hepatitis C has become a high-profile disease target as of late, consuming discussions of skyrocketing prices for specialty drugs. Gilead Science’s drug, Solvadi, costs $84,000 for a 12-week treatment, though the company has been heavily discounting it, to the detriment of its bottom line. AbbVie’s Viekera Pak, which has similarly high cure rates as its competitor, lists for $83,319 for a 12-week regimine.

A spokeswoman for the FDA declined to comment on the news; federal law prohibits the agency to discuss products under review.

The breakthrough designation can speed up approval of some drugs by two to three months. Analysts told Reuters that Merck’s two-drug treatment would likely now require a standard 10-month review. Merck said it still plans to file a new drug application within the first half of this year and that the FDA’s move to rescind the breakthrough designation will not affect its timing.

Merck also reported quarterly earnings Monday that surpassed analyst estimates and provided a 2015 earnings estimate. This year’s revenue is expected to reach between $38.3 billion and $39.8 billion. That would make 2015 revenue the lowest since before Merck’s 2009 purchase of Schering-Plough.