ACHN, IDIX Pair Trade Continues To Gain Traction

After Bristol-Myers Squibb (NYSE:BMY) discontinued development of BMS-986094, once a promising nucleotide type drug for hepatitis C (HCV), in August, funds invested in this drug segment swung out of Idenix Pharmaceuticals (NASDAQ:IDIX) and into Achillion Pharmaceuticals (NASDAQ:ACHN) for several reasons. First, large drug companies remain focused on assembling next-generation cocktail regimens (combinations of drug products) for this hard-to-treat infection given the potential for blockbuster sales, therefore, selecting the next rising star remains important (See PropThink’s prior story on IDIX and ACHN). ACHN continues to be a standout company in the space, with advanced compounds that work by proven mechanisms, and are supported by strong clinical data so far. Alternatively, IDIX could have issues with its lead compound, IDX-184, given that it works by the same mechanism of action as BMS-986094. The similarity of the two compounds has prompted FDA to issue a partial clinical hold on IDX-184 until it is satisfied that the drug candidate is safe to continue in clinical development.