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Schering's Hepatitis C Data Dull Vertex's Shine
  By Adam Feuerstein
Senior Writer
10/18/2007 11:48 AM EDT
Schering-Plough's (SGP - Cramer's Take - Stockpickr - Rating) experimental hepatitis C drug, once thought to be in trouble, has roared back to life, and now appears to be formidable competition to a similar drug from Vertex Pharmaceuticals (VRTX - Cramer's Take - Stockpickr).
Preliminary, but positive, efficacy and safety data from a phase II study of Schering-Plough's hepatitis C drug boceprevir were released Thursday morning. The announcement sent shares of Vertex down $5.25, or 14.6%, to $30.62, as Schering-Plough shares were up 53 cents, or 1.6%, to $32.78.
Boceprevir is a pill designed to attack hepatitis C by inhibiting the protease enzyme, one of the key enzymes the virus uses to copy itself. This "direct antiviral" approach differs from current hepatitis C drugs, which boost the immune system's ability to tamp down and eliminate the virus.
Vertex's hepatitis C drug telaprevir works via the same mechanism of action.
Vertex has pushed telaprevir's clinical development with alacrity, but Schering-Plough has moved at a slower pace. Also, some of the earlier clinical data on boceprevir was lackluster, leading many of the Wall Street investors following the race to develop new hepatitis C drugs to believe boceprevir's future was in doubt.
Today's new clinical data, however, suggest that boceprevir is alive and kicking.
In a phase II study of newly diagnosed hepatitis C patients, a three-drug combination of boceprevir, pegylated interferon and ribavirin achieved a rate of early virologic response in 70% of patients, which means these patients had undetectable levels of the hepatitis C virus in their systems at 12 weeks.
Vertex Pharma Falls on Rival Drug's Data
Associated Press 10.18.07, 3:10 PM ET
NEW YORK - Shares of Vertex Pharmaceuticals Inc. fell sharply Thursday, as analysts predicted the company's hepatitis C drug candidate will face competition, based on surprisingly positive data from a rival Schering-Plough drug.
Shares fell $4.26, or 11.9 percent, to $31.57 during afternoon trading. Over the past year, the Cambridge, Mass.-based biotech has traded between $25.61 and $45.38.
Early Thursday Schering-Plough Corp. (nyse: SGP - news - people ) reported encouraging results from an ongoing mid-stage study for its boceprevir hepatitis C treatment, which Citi Investment Research analyst Dr. Yaron Werber said showed a higher response rate in patients than those taking Vertex's telaprevir, also in Phase II trials.
Werber said in boceprevir's study, 79 percent of patients achieved early viral response within 12 weeks compared with the control group. In the Vertex trial, 70 percent of patients achieved the same outcome.
"The Phase II SPRINT-1 data from Schering Plough's boceprevir with a new dosing scheme is solid and will be highly competitive against Vertex's telaprevir," said Werber, in a note to investors.
Susquehanna Financial Group analyst Jason Kolbert agreed, saying the limited data in Schering-Plough's press release suggests, "as we have always maintained, that boceprevir is, and can be, a viable competitor to VX-950 (telaprevir)."
Meanwhile, Werber shrugged off earlier negative data from boceprevir, and instead focused on the competitive threat it now presents to Vertex.
"While investors largely wrote off boceprevir due to early disappointing results, the drug confers a strong efficacy and safety profile relative to telaprevir," he said.
Schering-Plough's stock rose 78 cents, or 2.4 percent, to $33 in afternoon trading.
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