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Vertex Maintains Lead Over Merck In Hepatitis C (new Phase 3 results reported)
 
 
  Sep. 7 2010 - 4:57 pm
http://blogs.forbes.com
By MATTHEW HERPER
 
Vertex Pharmaceuticals looks to be the big winner in the race to develop new treatments for hepatitis C. Analysts on Wall Street have moved on to worrying how big Vertex will win, and what that leaves for its main competitor, Merck. New data, released via press release today after the stock market closed, show that 65% of patients who were not cured by previous treatments did have an overall cure, known as a sustained virologic response (SVR), on Vertex's drug telaprevir. This result is at the top end of Wall Street's expectations, and Vertex shares rose 1.4% in after-hours trading.
 
"These are the kinds of advances we see in internal medicine only once every ten to fifteen years," said Stefan Zeuzem, who ran the study for Vertex's European marketing partner, Johnson & Johnson. He is chief of the department of medicine at JW Goethe University Hospital in Frankfurt.
 
Thirty-one percent of telaprevir patients who had gotten no benefit at all from previous treatments with the current hepatitis C regimen, a combination of interferon and antiviral drug ribavirin, had SVRs. Only 5% of these "null responders" got an SVR when treated with interferon, ribavirin, and a placebo. So giving telaprevir increased the response rate six-fold.
 
Still, this 31% number was a little worse than Wall Street expected. Mark Schoenebaum, who covers Vertex for International Strategy & Investment, had predicted that 55% of "nulls" would get an SVR. (Update: Schoenebaum said on a conference call in August this was the "upper limit" of what investors should expect.) Lawrence Biegelsen, an analyst who covers J&J for Wachovia, and pegged the number at a something like 40% of the null patients.
 
But in a note to investors this evening, Schoenebaum called today's result "very strong." In its study of patients who had been pre-treated, he wrote, Merck's boceprevir had achieved an SVR rate of 66%, about in line with the 65% achieved by telaprevir. But the comparison is deceiving, he wrote, because Merck's trial design essentially excludes "nulls." The fair comparison, he writes, is the 78% SVR rate telaprevir achieved in patients who saw their virus levels go down during a previous treatment, but were not cured.
 
Still, Schoenebaum says that Vertex shares are fairly valued at their current price. He argues that newer agents will supplant telaprevir much faster than anyone expects. His thesis is that, as occurred with HIV, new regimens of convenient combination pills will emerge and win much of the market. He has written that Bristol-Myers Squibb could be a major threat in this regard. Vertex is working at developing combinations for exactly this reason.
 
Hepatitis C drugs are tough to take, causing flu-like side effects and anemia. Telaprevir can cause a significant rash, which is serious in 5% of patients. When the first drugs to treat hepatitis C emerged they cured only 6% of patients. Current regimens cure about 40% of patients with the version of the disease included in this trial. New treatments like boceprevir and telaprevir promise to increase that to 60% or 70%. That really is amazing progress.
 
 
 
 
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