Vertex Stays in HepC Game, as All-Oral Combo Passes Small Study

2/23/12Follow @xconomy

Vertex Pharmaceuticals, some investors theorized in recent months, was about to be left in the dust by other companies with more effective drugs in development against hepatitis C. Today, Vertex released some clinical trial data which just might make some folks wait a minute before declaring this story to be “Game Over.”

The Cambridge, MA-based biotech company (NASDAQ: VRTX) today released some preliminary results from a study of 46 hepatitis C patients who got a combination of three oral pills—Vertex’s telaprevir (Incivek), its experimental drug VX-222, and standard ribavirin as their first form of treatment. The study found that 83 percent (38 of 46 patients) had undetectable amounts of the liver-damaging virus after 12 weeks of therapy on the three-pill combo regimen. While patients aren’t considered cured until 24 weeks have passed with undetectable amounts of the virus in the blood, past studies have shown that 12-week measurements are typically predictive of what researchers can expect to see at 24 weeks.

Shares of Vertex climbed 3.4 percent, to $38.90, in mid-day trading after the news.

The results are a small feather in Vertex’s cap, as it seeks to hold onto its market leadership position in hepatitis C, and improve upon the standard of care by eliminating the standard injectable interferon that causes flu-like side effects. Vertex won FDA approval last May for its market-leading protease inhibitor, telaprevir, which, when given with interferon and ribavirin, doubled the cure rate to about 80 percent of patients new to therapy. But competition in the field is fierce, as various companies are researching antiviral cocktails that include not just protease inhibitors, but also nucleotide polymerase inhibitors, and non-nucleotide polymerase inhibitors that attack the virus from different angles, and seek to raise the cure rate to near 100 percent, while getting rid of the dreaded interferon.

Gilead Sciences paid $11 billion last November to acquire Pharmasset and its portfolio of nucleotide polymerase inhibitors that seek to establish a new standard of care, and Bristol-Myers Squibb countered in January with a $2.5 billion takeover of Inhibitex. But just six days ago, Gilead stock tumbled when it released preliminary data from a study that said six of eight patients who hadn’t responded to prior therapy, and then took its nucleotide polymerase inhibitor (GS-7977) along with ribavirin, ended up having relapses. That finding put a dent in the thesis that the Gilead drug would work on its own against virtually all genotypes of hepatitis C patients, even in tough patients who failed on prior therapies. Essentially, it created an opening for Vertex and other companies, as Gilead said in a statement that “additional direct acting antivirals may be necessary,” for the toughest patients to treat.

It’s too soon to say if Vertex’s combo will end up being the answer to Gilead, but if Vertex can follow through on this latest finding, and turn in an application for FDA approval of the new all-oral regimen by year-end 2014 or early 2015, that “would keep Vertex competitive in the emerging all-oral space for HCV,” said Jason Kantor, an analyst with RBC Capital Markets, in a note to clients today. He added a caveat that “the sustained viral response (SVR) data presented, however, is only from a small and select portion of the total patients treated, and future updates will be key to determining the real efficacy of this regimen.”

Side effects of the drug were mostly mild, and there were no cases of moderate to severe rash that has been seen in other studies of Vertex’s telaprevir when given in combination with interferon and ribavirin. Two patients with the genotype 1b form of the virus dropped out of the study because of adverse events, Vertex said. More data from this study, called Zenith, has been submitted for detailed presentation at a medical meeting in the first half of 2012, Vertex said.

Based on the encouraging antiviral response rates seen so far, Vertex plans to run a bigger Phase 2b study of this all-oral regimen of telaprevir, VX-222, and ribavirin among patients with the most common genotypes of the disease (1a and 1b), and who are new to treatment. That trial would be designed to lay the groundwork for a pivotal, Phase 3 trial that could serve as the basis for an FDA application for marketing, Vertex said.

Besides this combo, Vertex is testing other all-oral combinations, through molecules it obtained in a collaboration with South San Francisco-based Alios Biopharma. For more of the background on that deal and its strategic importance to Vertex’s position in the hepatitis C market, see this feature story from last month.

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  • Brendan

    “Vertex Pharmaceuticals, some investors theorized in recent months, was about to be left in the dust by other companies with more effective drugs in development against hepatitis C.”

    This statement is crazy. Vertex currently has FDA approval for Incivek, the current study is just a combination therapy. Their drug is best in class and is on the market now.

    Gilead is working on an all oral regimen that has not yet been approved. It’s too early to say Vertex is trying to catch up, it’s equivalent to saying in a football game that my team would be behind if the other team scored a touchdown.

    Let’s wait and see if GILD can score a touchdown first, then you can worry about Vertex catching up.

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    Brendan—I agree with you on this one. To extend the sports analogy, I’d say Vertex is still very much the team to beat in hepatitis C because of its market-leading status with Incivek. Gilead’s nucs are sort of like the hot prospect people think will be great in the future, but still has a lot to prove. It’s almost as if Wall St. has given up on Tom Brady, and is absolutely convinced that Andrew Luck will leave him in the dust. It’s possible, but I don’t the evidence is there yet to support such a black-and-white assertion.

  • Brendan

    I guess it shouldn’t bother me, because the markets insanity allowed me to buy VRTX for about 30 a share last year. But think about what a great year it’s been for VRTX (the company not the stock).

    They’ve had two drugs approved, gone from never making a profit to a forward P/E of under 10 and they may have a very good shot at an oral Hep-C drug. On top of that GILD’s drug candidate is having problems. All it takes is one bad study and you could be back to the drawing board for years (or never have a new product at all). Since Incivek is already on the market it’s making good money as the clock ticks away.

    Yet VRTX still trades 20% lower than it did 6 months ago. The market makes no sense at all here. I’ll bet they’ll be back to 50 a share by the end of the year, especially if GILD’s acquisition turns out to be all hype and no follow though.