Merck to sustain asset impairment charge for HCV therapy in pipeline

Merck will record an intangible asset impairment charge of $2.9 billion related to its uprifosbuvir research program for the treatment of hepatitis C, according to a U.S. Securities and Exchange Commission report.

The report states that Merck determined the need to evaluate the uprifosbuvir intangible asset following recent changes to the product profile as well as changes to its expectations for pricing and the market opportunity. The company estimates that the current fair value of the asset is $240 million, which will result in a pre-tax impairment charge of $2.9 billion.

Uprifosbuvir, or MK-3682, is a nucleotide polymerase inhibitor that Merck acquired along with its acquisition of Idenix in 2014, according to a press release.

The release states that the main reason for making the impairment decision was related to regulators asking for additional clinical studies. Merck’s development plans for uprifosbuvir were for a triple therapy that could be used by patients of any HCV genotype. The regulators advised that data would be required showing an added benefit of the triple therapy over high-dose doublet therapy using uprifosbuvir and ruzasvir.

The results of the doublet therapy are not due until late 2017, which suggests a significant delay to the company’s plans to accelerate the triple therapy into the market, according to the release.

Reference: www.merck.com