Vertex, On Deadline, Wins FDA Approval for Hepatitis C Drug

5/23/11Follow @xconomy

[Update: 12:03 pm ET, with pricing info] Vertex’s big day has arrived. The Cambridge, MA-based biotech company has gotten clearance from the FDA to start marketing telaprevir (Incivek) as a new treatment for patients in the U.S. with hepatitis C.

The new drug, a protease inhibitor designed to fight the liver-damaging virus, is now approved as a treatment for patients getting their first round of treatment, or those who haven’t responded well enough to prior treatment, the FDA said in a statement on its website. The approval announcement came on the agency’s deadline day for completing its review of Vertex’s new drug application. Earlier this month, the FDA approved a competing protease inhibitor from Merck, boceprevir (Victrelis).

Both approvals came as expected. Advisory panels to the FDA last month gave unanimous recommendations in favor of both products.

“With the approval of Incivek, there are now two important new treatment options for hepatitis C that offer a greater chance at a cure for some patients with this serious condition,” said Edward Cox, the director of the Office of Antimicrobial Products in FDA’s Center for Drug Evaluation and Research, in a statement. “The availability of new therapies that significantly increase responses while potentially decreasing the overall duration of treatment is a major step forward in the battle against chronic hepatitis C infection.”

About 3 million people in the U.S. are thought to have chronic hepatitis C infections, which puts them at risk for cirrhosis. The disease has long been treated with a combination of drugs—pegylated interferon alpha and ribavirin—that cause flu-like symptoms for almost a year, and cure less than half of patients. By adding Vertex’s drug, researchers pushed the cure rate to almost 80 percent in new patients, and were able to shorten the course of treatment with the other drugs by half. Analysts are projecting the new drugs will trigger a wave of new treatment for hepatitis C, and that Vertex (NASDAQ: VRTX) will lead the market, capturing more than $2 billion in U.S. sales in a couple years.

[Updated comments on price from Vertex conference call.] Vertex issued its own statement, which runs a prominent table to remind people how much its drug boosts the cure rate. The drug’s price, always a sensitive subject in the pharma business, wasn’t disclosed in the statement, but Vertex’s commercial chief, Nancy Wysenski, said in a conference call with analysts that the drug will cost $49,200 for a full 12-week course of therapy. About 60 percent of patients on the drug are expected to be covered by commercial insurance, about 35 percent will be covered by government plans, and about 5 percent are expected to pay in cash, Vertex said.

Vertex said it expects to contribute between $50 to $250 a month, over the usual three-month course of treatment with Incivek, to offset some of the co-payments patients will be expected to make. Patients without insurance, and who have an adjusted gross household income of less than $100,000, will be eligible to get the drug for free, Wysenski said on the call.

“We believe we have priced this drug in accordance with the value it brings,” Wysenski said, noting that the drug has helped cure 79 percent of patients new to treatment, compared with 46 percent who did that well in a pivotal clinical trial.

When asked whether she’s concerned about Merck undercutting Vertex with a lower price, the answer to investors on the call sounded a lot like ‘No.’

“What I’ve heard loud and clear from physicians from the day I got here, and it hasn’t wavered, is that they are interested in what will give their patient the best opportunity to clear the virus,” Wysenski said. She added that Vertex, when setting the price, considered the prices of other treatments for hepatitis C, and how well those treatments work compared with Incivek.

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