Shares of Achillion Pharmaceuticals (ACHN) soared as much as 27% in yesterday's trading session after the company reported that a combination study of its drug ACH-3102 showed a 100% Sustained Viral Response -- SVR -- in patients with the Hepatitis C virus. The positive results were presented as a late-breaking poster presentation at the 65th Annual Meeting of the American Association for the Study of Liver Disease -- AASLD. This conference is important for the fact that companies report to display next generation treatments against liver diseases such as Hepatitis C, Hepatitis B, NASH (Non-Alcoholic Steatohepatitis), and other advanced liver diseases. There are a lot of unmet needs in patients with liver diseases and any successful treatment being brought to market could generate billions of dollars in sales.

Achillion had chosen to do a combination study using their hepatitis C drug ACH-3102 and combine it with an approved, marketed Hepatitis C oral drug from Gilead Sciences (GILD) known as sofosbuvir. This treatment regimen was done without Ribavirin -- an old standard of care therapy for Hepatitis C. The problem with Ribavirin is that it causes of a  lot of undue toxicity for patients and even then it doesn't achieve substantial SVR for the Hepatitis C virus. The results showed that by combining ACH-3102 and sofosbuvir, all 12 patients in the study achieved a 100% SVR response with the genotype 1 Hepatitis C virus. That means that in just 12 weeks this combination was able to clear the Hepatitis C virus without the need to add the toxicity of Ribavirin.

Gilead's drug sofosbuvir in genotype 1 Hepatitis C virus patients can obtain up to about a 90% SVR on its own. Gilead's sofosbuvir drug produced $2.8 billion dollars in sales just in Q3 2014 alone - almost double Achillion's entire market cap.These results are substantial news because it could mean that if Gilead wants to create this combination oral drug regimen it would have to consider acquiring Achillion Pharmaceuticals. For this reason we believe that Achillion will eventually be bought out either by Gilead Sciences or another big pharmaceutical company needing to incorporate a Hepatitis C drug to their pipeline. The market for Hepatitis C treatments  is in the billions of dollars. There are about 130 to 150 million people with chronic infection of the virus. Without treatments for the hepatitis C virus these patients' livers would be come damaged/scarred leading to other symptoms and even possibly death.

There is a lot of competition now in the Hepatitis C space but Achillion's contribution to showing 100% SVR in all patients is truly remarkable in itself. The share price for Achillion surged up as much as 27% but we believe that the share price may steadily rise over the next few days as investors realize that the company could be an eventual takeout candidate by a larger pharmaceutical entity. For that reason we believe that Achillion is a good long term stock to hold as the share price should continue to climb in the coming months and might even produce a nice big payday as it is finally acquired.