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Johnson & Johnson (JNJ - Analyst Report) received positive news when the U.S. Food and Drug Administration (FDA) approved Olysio for hepatitis C infection.

The FDA approved the use of Olysio, a NS3/4A protease inhibitor, for the treatment of chronic hepatitis C infection. Olysio is approved as a part of an antiviral treatment regimen in combination with pegylated interferon and ribavirin in adult patients suffering from genotype I infection with liver problems.  It can be used in both treatment naïve patients as well as in patients who have failed prior interferon-based therapy.

We note that an approval was on the cards as the Antiviral Drugs Advisory Committee of the FDA recommended the approval on a unanimous basis in Oct 2013.

We remind investors that Janssen Therapeutics, a part of Johnson & Johnson’s Janssen Products, submitted its New Drug Application (NDA) for Olysio to the FDA in Mar 2013.  Subsequently, the FDA granted “priority review” designation to the NDA in May 2013. Olysio was developed in collaboration with Medivir AB which holds the marketing rights in Nordic countries.

Johnson & Johnson already has a hepatitis C virus (HCV) drug in its portfolio – Incivo. The approval of Olysio will strengthen its HCV franchise. Olysio was approved in Japan under the trade name, Sovriad, in Sep 2013. It is currently under review in Europe.

We note that Johnson & Johnson’s HCV pipeline recently got a boost with the acquisition of GlaxoSmithKline’s (GSK - Analyst Report) pipeline candidate, GSK2336805.

GSK2336805, a NS5a replication complex inhibitor, is being developed for the treatment of chronic HCV. Johnson & Johnson will move the candidate into phase II studies in interferon-free combinations with its protease inhibitor Olysio and its non-nucleoside polymerase inhibitor, TMC647055, for the treatment of chronic HCV in adult patients with compensated liver disease.

As per Johnson & Johnson, as many as 3.2 million people in the U.S. are infected with HCV. Hence, the market potential for HCV drugs looks positive but competition is stiff as companies like AbbVie, Inc. (ABBV - Analyst Report) are also developing treatments for HCV.

Johnson & Johnson currently carries a Zacks Rank #3 (Hold). Right now, large-cap pharma stock that looks attractive include Bayer AG (BAYRY - Analyst Report), with a Zacks Rank #2 (Buy).

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