How ZymoGenetics Coulda Been a Contender: The Big Break That Came Too Late
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the development in a way that would have boosted ZymoGenetics’ stock price.
“Certainly some people would have come off the fence and perhaps started to believe that interferons will be really hard to get rid of,” Williams says. “I’m certainly of the mind that it will be extremely difficult to get rid of interferon, and achieve [cure rates] currently seen.”
He added: “I gotta believe it would have been viewed as a net positive, but the degree to which it would have been reflected in the stock price, I don’t think anybody can say that.”
David Miller, the president of Biotech Stock Research in Seattle, who criticized ZymoGenetics for selling the company at a bargain price, said he believes investors would have given the company credit. An estimated 6 million patients in the U.S. and Europe have hepatitis C, and many of them are expected to start seeking treatment in 2011, now that a new wave of protease inhibitors like Vertex’s telaprevir and Merck’s boceprevir are being primed to hit the market later this year. The existing interferons from Roche and Merck made up a combined market worth more than $2 billion in 2009, even before the more-effective protease inhibitors came along to spur more interest in hepatitis C therapy.
ZymoGenetics could have seen its stock climb another $2 to $3 a share if it had still been an independent company when the Vertex news hit the wire on December 21, Miller says.
“Smart money was moving toward ZymoGenetics,” Miller says. The latest clinical trial failure of the no-interferon regimen, Miller says, “would have been huge for ZymoGenetics. People were starting to understand that interferons aren’t going anyway anytime soon. This press release (from Vertex) would have cemented that.”
Now that doctors are getting accustomed to seeing hepatitis C cure rates in the neighborhood of 70 to 75 percent of patients who take the combo regimen of the Vertex drug, plus interferon and ribavirin, it’s unlikely they will ever sacrifice even a few percentage points of effectiveness just to get rid of interferon’s side effects, Williams says. That means the bar is high for any oral pill cocktail regimen that aspires to get rid of interferon. It’s certainly possible that the combination of doses, and schedules, could coalesce to make that happen, but it will take years to figure out in clinical trials, Williams says.
Given that was what ZymoGenetics management was betting on with their new interferon, and that its thesis was essentially validated on December 21st, I had to ask Williams if he regrets selling the company for less than a billion dollars. He said no.
“I don’t look back on these sorts of decisions,” Williams says. “You make the decision you have to make at the time with the information you have available to you at the time. I feel we made the right decision at the right time.”