Merck, Genentech Team Up on Hepatitis C Drugs, Raising Ante in Vertex Rivalry

5/17/11Follow @xconomy

Merck isn’t messing around with its new hepatitis C drug. It has now enlisted a powerhouse partner in its bid to fight for market share against Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX).

The Whitehouse Station, NJ-based pharma giant (NYSE: MRK) said today that it has formed a non-exclusive alliance with Roche’s Genentech unit to help co-market boceprevir (Victrelis) as a treatment for hepatitis C in the U.S. Under this deal, Genentech has agreed to pitch the new protease inhibitor from Merck as part of a three-drug regimen that includes Roche’s pegylated interferon alpha (Pegasys). The two drug giants will work together to raise awareness among doctors and patients about the new treatment for hepatitis C, the companies said. The companies also said they are working together to extend the agreement to other developed and emerging markets globally.

Financial terms of the deal aren’t being disclosed. “Both companies are contributing financial and human resources to these agreements,” said Tara Iannuccillo, a Genentech spokeswoman, in an e-mail.

This news must have salespeople at Vertex chomping at the bit, as they are still awaiting the green light from the FDA to begin selling their own protease inhibitor, telaprevir (Incivek), in the U.S. The Merck drug, and Vertex’s, are aiming to create a new standard of care for hepatitis C treatment by greatly increasing the cure rate for this chronic liver infection compared with the two standard drugs alone. Merck and Vertex both won unanimous support for their drugs last month from advisory committees to the FDA, but Merck beat Vertex to the punch in getting FDA authorization to begin sales. Merck won FDA clearance last Friday, while the agency’s deadline to complete its review of telaprevir is May 23.

All companies could stand to benefit from a competitive marketing frenzy. An estimated 3 million people in the U.S. have hepatitis C chronic infections, and about 170 million worldwide have it. Most people haven’t been treated, because the standard regimen cures people less than half the time, and causes flu-like symptoms that last almost a year. Vertex’s drug has achieved the highest cure rate in clinical trials, almost 80 percent, and most analysts have forecasted that it will be the market leader, capturing $2 billion or more in U.S. sales within a couple years.

Vertex has the rights to market its drug in the U.S., although it has a partnership with Johnson & Johnson to help with marketing overseas. A Vertex spokesman didn’t immediately respond to a request for comment.

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