Vertex Pharmaceuticals went from king of the hill in the treatment of hepatitis C to yesterday’s news in about six wild months. But while many on Wall Street say Vertex’s big drug will soon become obsolete, Vertex and its small partner in South San Francisco have quietly put themselves in position to defend a big share of this future multi-billion dollar market.

Cambridge, MA-based Vertex (NASDAQ: VRTX), which has significant operations in San Diego, is running a series of small clinical trials this year that will mix and match combinations of antiviral medicines against hepatitis C. These trials will help determine whether Vertex and its partner, South San Francisco-based Alios Biopharma, have hit upon a combination of drugs that can raise the cure rate, and reduce side effects, for millions of patients with this liver-damaging virus.

While Vertex’s new drug has been a huge step forward in the past year, the ultimate way to fight the fast-mutating virus, many scientists believe, will be by putting together a cocktail of antivirals that attack hepatitis C from multiple angles like with HIV.

“There isn’t one magic pill that will solve the problem,” says Vertex CEO-to-be Jeff Leiden. “It’s clear the HCV space will evolve into different combination treatments for different patients. It’s not yet clear what the best combination is going to be. What you want is to have the component parts in your company so you can put them together.”

Vertex's Jeff Leiden

The hepatitis C world saw dramatic upheaval in the past year as researchers learned more about antivirals in development. Vertex won FDA approval in May for its new protease inhibitor, telaprevir (Incivek), which doubled the cure rate to about 80 percent for new patients when given in tandem with standard pegylated interferon alpha and ribavirin. About 25,000 people rushed in to get treated with the new combo regimen in its first seven months on the market, generating hundreds of millions in cash flow per quarter for Vertex, and pushing it into the black.

Exciting as it all was for physicians, patients, and Vertex shareholders, the company was soon upstaged. Researchers have long been looking for a way to get rid of the injectable interferon part of the regimen, which causes nasty flu-like symptoms that people must endure for months. To go beyond combo therapies (like the one from Vertex and another from Merck that include injectable interferon), the next step is to hit the hepatitis C virus with not just protease inhibitors, but also drugs from other classes—nucleotide polymerase inhibitors, and non-nucleotide polymerase inhibitors.

Princeton, NJ-based Pharmasset (NASDAQ: VRUS) stole the show last November at the American Association for the Study of Liver Disease when it said its nucleotide polymerase inhibitor cured all 40 patients with certain hepatitis C genotypes in a small study—a result that led to its $11 billion acquisition by Foster City, CA-based Gilead Sciences (NASDAQ: GILD). A few weeks later, another maker of drugs in that class, Alpharetta, GA-based Inhibitex (NASDAQ: INHX), got bought by Bristol-Myers Squibb for $2.5 billion. Separately, Bristol-Myers Squibb released some more promising clinical results from its own pipeline just last week.

Those developments got everyone talking about a new paradigm in hepatitis C, which many on Wall Street believe will leave Vertex in the dust. Jason Kantor, an analyst with RBC Capital Markets in San Francisco, said in a Dec. 19 note to clients that “the consensus view is that Vertex’s HCV franchise will essentially go to zero beyond 2015.” Vertex stock has dropped almost 40 percent in the past year, down from its 52-week high of $58.87 to $35.86 at yesterday’s close.

While Leiden has spent much time talking with investors about Vertex’s other drugs in development—particularly one expected to hit the market this year for cystic fibrosis—he says the company isn’t about to surrender in the hepatitis C market. He has a plan intended to allow Vertex to compete beyond 2015, when the first all-oral, interferon-free regimens are expected to could come along and replace today’s standard of care.

Sometime before the end of March, Vertex expects to see results from an early-stage study of an all-oral combo regimen of telaprevir (a non-nucleotide polymerase inhibitor called VX-222 that it acquired from a Canadian company in 2009) and the usual ribavirin. If Vertex can cure about 75 percent to 80 percent of patients with this cocktail, and reduce side effects by eliminating interferon, Leiden says the company would be ready to go to pivotal clinical trials this year with its own all-oral combination.

“If we can do that, it will be a very exciting result. If you take that regimen into pivotal trials, now we’re talking about 2014 to finish those trials,” Leiden says.

And that isn’t the only combo Vertex has in mind. Within weeks … Next Page »

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[Update: 10:40 am ET] Vertex Pharmaceuticals is getting a new CEO, as it faces tough new competition with its flagship hepatitis C drug and prepares to roll out a second new medicine for cystic fibrosis.

Cambridge, MA-based Vertex (NASDAQ: VRTX) said today that Jeff Leiden, a member of the company’s board and a managing director at Clarus Ventures in Boston, will replace Matt Emmens as president and CEO on Feb. 1. Emmens plans to remain a full-time executive chairman until May, when Vertex says he will retire from a full-time role at the company, but remain a member of the company’s board.

[Update with Emmens's age] Emmens, 60, is the former Merck executive who took over from founder Josh Boger as CEO in May 2009, as the company was finishing up clinical trials and preparing for the commercial push of a groundbreaking new therapy for hepatitis C, telaprevir (Incivek). The drug was cleared by the FDA in May, and although analysts expect it to be a billion-dollar seller, it quickly surpassed Wall Street sales expectations in its first couple quarters, allowing Vertex to report its first product-driven quarterly profit in its 22-year history.

But the hepatitis C landscape has changed in just the past couple months, as Gilead Sciences moved to acquire a competing drugmaker for $11 billion, and Vertex’s stock has plunged amid fears that it will soon be upstaged in the marketplace.

Shares jumped as high as $58 a share earlier this year, then plummeted all the way to $30.54 at yesterday’s close, leaving Vertex with a market valuation of $6.3 billion. Most of the value is based on the prospects for Incivek, although Vertex also has an application in to the FDA to start selling a new cystic fibrosis drug, ivacaftor (Kalydeco). That drug is getting a faster-than-usual six-month regulatory review, which the FDA sometimes grants to groundbreaking new medicines. The FDA deadline to finish its review is April 18.

“Under Matt’s leadership, Vertex established itself as a company capable not only of discovering important new medicines, but of successfully bringing those medicines to patients,” Leiden said in a statement. “As a member of the Vertex Board, I have been extremely impressed with the company’s ability to retain its clear focus on both groundbreaking science and improving the lives of people with serious diseases. It will be a privilege to lead Vertex at this exciting time and to further build the organization as we prepare for the global launch of our second new therapy, advance our diverse pipeline and build value for shareholders in the years ahead.”

Leiden, 56, is the former president and chief operating officer of Abbott Laboratories, where he gained experience in the highly competitive rheumatoid arthritis drug market with adalimumab (Humira).

Emmens, in a company statement, added: “I am proud of the accomplishments we have made during my almost three years at Vertex and believe the company is well-positioned to bring forward additional innovative new medicines. Jeff brings significant and broad leadership experience to Vertex, and I am confident that his understanding of the company, combined with his unique blend of scientific, commercial and financial expertise, will help Vertex deliver on its goals in the future.”

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Biotech rivalries are sometimes a bit like boxing matches, where you have two lone fighters vying for the prize. But the hepatitis C market is turning into a battle royal that’s more wide open and unpredictable, with all the competitive maneuvering, surprise crashes, and comebacks you might expect from the Daytona 500.

The medical advances in hepatitis C have been dizzying this year, especially in what it means in terms of multi-billion dollar business implications. The safest thing to say is that there’s plenty of good news for patients this year, but that shareholders in the major hepatitis C drug developers had better hold on tight as a new standard of care gets established.

Some commentators figured that Gilead Sciences (NASDAQ: GILD), the world’s biggest maker of HIV drugs, had essentially locked up the dominant position in this new drug class through its $11 billion acquisition last month of Princeton, NJ-based Pharmasset (NASDAQ: VRUS). But it’s still too soon for anyone to declare victory over the wily and fast-mutating virus that causes hepatitis C. Given the way drug development is going now, it’s possible we could have dueling antiviral drug cocktails that cure almost 100 percent of patients within five years. And before we get there, we’re going to see some fascinating chess moves—and probably a few surprising collaborations—from companies like Vertex Pharmaceuticals, Merck, Roche, Johnson & Johnson, Bristol-Myers Squibb, and Abbott Laboratories, as well as several smaller biotech startups like Alpharetta, GA-based Inhibitex (NASDAQ: INHX).

The Pharmasset compound that prompted Gilead to write such a big check, PSI-7977, is “certainly not a panacea, not the lone answer,” says Kleanthis Xanthopoulos, the CEO of San Diego-based Regulus Therapeutics, and the co-founder of another hepatitis C drug developer, Anadys Pharmaceuticals.

Regulus Therapeutics CEO Kleanthis Xanthopoulos

Xanthopoulos says Gilead was “taken to the cleaners,” and that the hepatitis C market is still up for grabs. “It’s going to take some time before people figure out how it plays out,” he says. The Pharmasset drug “is a powerful player, but you will need other direct-acting antivirals. You want to go to a 100 percent cure rate. I can guarantee the Pharmasset compound isn’t going to do it alone.”

Hepatitis C has never really captured big headlines in the U.S., as it has never benefitted from massive awareness boosting campaigns that have supported research for, say, HIV, or breast cancer. But hepatitis C has clearly emerged as one of the biggest opportunities in pharmaceuticals over the past few years. There are more than 3 million people in the U.S., and an estimated 170 million worldwide, with this liver infection that can lead to cirrhosis and liver cancer. Most people have never bothered to get treated, partly because the infection takes years to fully wreak havoc. The other reason is the standard of care with a combination of drugs—pegylated interferon alpha and ribavirin—causes flu-like symptoms that last for almost a year, and usually cures only 30-40 percent of patients. Essentially, most people figure the treatment is worse than the disease.

Vertex Pharmaceuticals changed the equation back in May. The company won FDA approval for a direct antiviral drug, a protease inhibitor called telaprevir (Incivek), that is added to the usual two-drug combo regimen. By adding the Vertex drug, researchers saw the cure rate boom to almost 80 percent of patients, while cutting the treatment time with the other drugs in half. The Vertex drug also significantly raised … Next Page »

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The price of shares at San Diego’s Gen-Probe, Amylin Pharmaceuticals, and Optimer were clipped for various reasons over the past week, but several local startups successfully raised capital. Our good news, bad news briefing begins here.

—Rempex Pharmaceuticals, a San Diego biopharmaceutical startup developing a new approach to antibiotics resistance, said it raised $67.5 million in Series B venture funding—bringing total funding for the company to $76 million since its founding less than five months ago. The startup is on a fast track, and plans to use the capital to accelerate the commercialization of its therapies for treating gram-negative bacterial infections. Rempex said it plans to file a new drug application for its first drug candidate in the second half of 2012. New investors Frazier Healthcare Ventures and Vivo Ventures joined existing investors SV Life Sciences, OrbiMed Advisors, and Adams Street Partners in the latest round.

—Cambridge, MA-based Vertex (NASDAQ: VRTX) has held the high ground in hepatitis C therapies since the FDA approved its protease inhibitor drug telaprevir (Incivek) last year. But two rivals are gaining ground. The price of Vertex shares have fallen with the rise of Alpharetta, GA-based Inhibitex (NASDAQ: INHX) and Princeton, NJ-based Pharmasset (NASDAQ: VRUS). Vertex, which has operations in San Diego, hit a 52-week high of $58.87 on May 12, but it has been trading around $31 in recent days.

—Adding to the competition in hepatitis C drugs, San Diego-based iTherX Pharmaceuticals raised almost $3.2 million to advance its development of a prophylactic treatment for Hepatitis C, according to a regulatory filing earlier this week. The startup said in March that its drug candidate TX-5061 appears to prevent the hepatitis C virus from entering liver cells, and has shown “potent preclinical antiviral activity against all HCV genotypes.” Former UCSD virologist Flossie Wong-Staal is a co-founder and chief scientific officer. The company raised $2.8M in 2010.

—San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) agreed to pay Eli Lilly more than $1.5 billion as it gradually reassumes responsibility for global commercialization of its best-selling diabetes drug in a deal that ends its 10-year partnership with Lilly. Under their agreement, which also ends litigation with Lilly, Amylin will take over sales of exenatide (Byetta) in the U.S. by the end of this month—and global sales of both Byetta and an experimental, extended release version (Bydureon) over the next two years. Amylin shares, which hit a 52-week high of $16.65 on Jan. 27, have been trading around $10 a share over the past few weeks.

—Xconomy east coast biotechnology editor Arlene Weintraub profiled PharmaSecure, a four-year-old startup in Lebanon, NH, with operations in San Diego, Michigan, and India. The company provides machines to drug-makers that print unique bar codes and serial numbers on drug packaging. PharmaSecure raised $3.9 million last month from Innovation Endeavors, Gray Ghost Ventures, Healthtech Capital, and angel investors. The Tech Coast Angels (TCA) participated in … Next Page »

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Drug approvals and advances in new cancer therapies were the prevailing themes in San Diego’s life sciences news over the past week. Our briefing begins now.

—TEDMED, the exclusive medical and healthcare symposium that died in 2004 and was resurrected in 2009, is now the walking TEDMED. The entertaining show with a mix of big ideas, celebrity presentations, humor, and music that played at the Hotel del Coronado for the past three years said it is moving to Washington DC. Playing at the John F. Kennedy Center for the Performing Arts in the nation’s capital will give the $4,000-a-person symposium a bigger stage and a more influential audience, according to Priceline.com founder Jay Walker, who led an investor group that acquired the show in April. About 850 attended last week’s four-day symposium in the San Diego area.

—Federal regulators approved a new pain-killing drug intended to put off the post-surgical need for opioids that was developed by Pacira Pharmaceuticals (NASDAQ: PCRX), the Parsippany, NJ-based drug developer with operations in San Diego. The FDA’s approval marked the end to a protracted drug-development saga for the long-acting form of a pain drug called bupivacaine. Pacira plans to begin marketing the drug, branded as Exparel, in January.

—The FDA approved a new diagnostic test that was developed by San Diego-based Gen-Probe (NASDAQ: GPRO) to detect strains of the human papillomavirus (HPV) that pose a higher risk for cervical cancer and precancerous legions. Gen-Probe said regulators approved its Aptima HPV test to run on TIGRIS, a fully automated, high-throughput molecular diagnostic system. Using a Pap smear sample, the company says its test detects 14 high-risk types of HPV, giving patients and doctors information earlier and more accurately.

—Luke’s BioBeat column focused on several cancer drugs the FDA approved in August, which he suggested could be a turning point in the decades-long battle against cancer. Instead of broad-based anti-cancer drugs, Luke says regulatory approval of vemurafenib (Zelboraf), brentuximab vedotin (Adcetris), and crizotinib (Xalkori) signals the … Next Page »

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Dendreon has made its share of mistakes before. But last week, the Seattle cancer drug developer achieved the biotech equivalent of fumbling the ball on the 1-yard line with time running out on the clock. The failure was so painful, so shocking, it erased two-thirds of the company’s stock value—about $3 billion. It even started a “Dendreon flu” that dragged down biotech stock indexes.

There are plenty of reasons for investors to be nervous, with Uncle Sam’s credit rating in question and unemployment running high. Times of anxiety in the market tend to be bad for high-risk sectors like biotech. And sure enough, many biotech investors have run for the exits, worried that Dendreon’s flop is a sign that other high-profile biotechs are doomed to fail. But that would be an overreaction. Investors would be wise to write off the Dendreon story as a case of a fine mess at one company, and not really any great cause for industry-wide concern.

I’ve been covering Dendreon (NASDAQ: DNDN) for 10 years, and have seen some incredible ups and downs. Very little about this story surprises me anymore. But while writing over the weekend, three days after disaster struck, I’m still slack-jawed about this colossal choke. Heading into last week’s second-quarter conference call, the company had forecasted it would generate $350 million to $400 million in sales this year of its immune-booster for prostate cancer, sipuleucel-T (Provenge). But the company recorded $49.6 million in sales in the quarter ended June 30, plus another $19 million in the month of July, which was “substantially” lower than its internal projections, according to CEO Mitch Gold on the call. So Dendreon withdrew its sales forecast and didn’t provide any other financial guidance, other than to say it expects “modest quarter-over-quarter” growth.

If you assume “modest” translates into 5 percent quarter-over-quarter growth the rest of this year, then Dendreon could generate about $185 million in sales this year. That’s a long way from $350 million to $400 million. And the problems leading to the shortfall, Gold said, are expected to last into 2012. It’s anybody’s guess how long it might take to fix Dendreon’s situation, if it ever happens.

Mitch Gold

It’s truly a stunning fall from grace. Dendreon is now planning to cut costs, and make layoffs, in weeks to come. Analysts, who had drawn up models that had Dendreon eclipsing $1 billion in sales, suddenly had to go back to the drawing board. Cory Kasimov of JP Morgan, a Dendreon bull, slashed his 2012 sales forecast from $841 million all the way down to $388 million. “This was obviously a crushing blow to our overweight thesis and one that we certainly did not see coming. We don’t think anyone did,” Kasimov wrote in an Aug. 4 note to clients.

The official explanation for what went wrong makes you slap your forehead in disbelief. Essentially, Dendreon said most of its physician customers are afraid they won’t get reimbursed by Medicare, or they won’t get a timely reimbursement, meaning they’ll be stuck holding the bag on a drug that costs $93,000 per patient.

It is shocking to hear Dendreon say this in August 2011, given how much time it had to methodically block and tackle on this fundamental question. From the minute that Dendreon won FDA approval of this new product in April 2010, it had two mission-critical tasks in front of it—manufacturing and marketing. The first challenge was about proving it could manufacture enough of its first-of-a-kind treatment—which stimulates a patient’s own immune cells—to meet the demand from thousands of prostate cancer patients around the U.S. Dendreon had time to work on building up manufacturing capacity, because the market recognized it would have been irresponsible to spend hundreds of millions on that prior to FDA approval. The second challenge, sales and marketing, was mainly about persuading legions of urologists and oncologists to prescribe the groundbreaking new therapy. Processes needed to be established to ensure the company would get paid in an efficient and timely way, doctors would get reimbursed from insurers, and patients would have easy access even when they couldn’t afford the co-pays.

The sales and marketing effort ran into trouble right away, when Dendreon overreached and set the price for its product too high—at $93,000 per patient. Analysts at the time of approval were only expecting a price of about $62,000, so Dendreon didn’t need to go that high. The company argued, … Next Page »

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If there’s a common thread in San Diego’s biotech news over the past week, it would be perseverance. If you can persist with our briefing, you’ll see what I mean.

—Cambridge, MA-based Vertex, (NASDAQ: VRTX), which has a sizable presence in San Diego, said it generated $74.5 million in second-quarter sales of telaprevir (Incivek), its new drug for treating hepatitis C. Wall Street analysts had expected the number would be less than half that.

—San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN), Indianapolis-based Eli Lilly (NYSE: LLY), and Waltham, MA-based Alkermes (NASDAQ: ALKS) re-submitted an application to the FDA to market exenatide, its new, once-a-week version of Bydureon.

—San Diego-based Arena Pharmaceuticals, (NASDAQ: ARNA), which sustained a major setback last October when the FDA refused to clear its obesity drug, reported results from a recent study that could address part of the FDA’s objections. Arena said its weight-loss drug lorcaserin (Lorqess) was found in cerebrospinal fluid at much lower concentrations in human beings than in rats. The company plans to address each of the concerns raised by the FDA about its drug.

—San Diego-based BrainCells Inc., which has raised at least $77 million in venture capital since it was founded in 2003, has raised nearly $1 million in a planned financing of $14 million. But BrainCells is moving forward without CEO James Schoeneck, who joined the company more than five years ago, and Carrolee Barlow, who was the chief scientific officer. Consultant Robert Williamson has been serving as the company’s acting CEO.

—There’s a new venture firm in town, called Moore Venture Partners. Terry Moore told me he can make a difference in helping San Diego’s underserved startup community with even a small fund of $10 million to $15 million. Moore plans to invest in both tech and life sciences startups, and participated in last year’s $26.5 million Series B financing at San Diego-based Astute Medical.

—San Diego-based Illumina (NASDAQ: ILMN) said it is working with the University of Oxford to sequence the whole genomes of 500 people with a range of life-threatening genetic diseases or disorders that pose major challenges in diagnosis, treatment, and care. The team plans to recruit patients from Oxford’s clinical community in an effort to identify genetic mutations that could be used to diagnose their diseases and optimize treatment.

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Vertex Pharmaceuticals is off to a running start in the marketplace with its brand new hepatitis C drug.

The Cambridge, MA-based company (NASDAQ: VRTX) said today that it generated $74.5 million in sales of telaprevir (Incivek) in the quarter that ended June 30. That’s an especially big number as far as new pharmaceutical rollouts go—Wall Street analysts were only expecting about $31 million, according to TheStreet.com. It also should be noted that Vertex’s performance came in just six weeks of work, since the drug was first cleared for sale by the FDA on May 23.

Vertex’s sales number is the most important figure in today’s earnings report, since this product has been hotly anticipated for years. The product has shown in clinical trials that when it is added to a couple standard treatments, it can double the cure rate to about 80 percent of patients, while cutting the course of treatment in half, to about six months. Vertex’s drug, along with a competitor from Merck, has created new demand for treatment among the estimated 3 million Americans with hepatitis C infections.

Many are lining up to get treatment for the first time for this chronic liver damaging disease, since the cure rate is so much higher, and the Vertex drug enables patients to shorten the time they must endure the flu-like side effects of the standard drugs.

Shares of Vertex climbed $1.52, or about 3 percent, to $49.50 in after-hours trading following the earnings report. Vertex will host a conference call and webcast today at 5 pm ET/2 pm PT to discuss the second quarter, and take analysts’ questions.

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Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX) said today it has agreed to pay $60 million upfront, as much as $715 million in development milestone payments over time, and potentially $750 million in sales milestones, to obtain a worldwide license to a couple new hepatitis C drug candidates from South San Francisco-based Alios Biopharma. The two drugs are nucleoside analogues which Vertex hopes to put into a hepatitis C cocktail regimen that is entirely oral, and would eliminate the standard interferon that causes flu-like symptoms. Vertex won FDA clearance last month for its pioneering new protease inhibitor, telaprevir (Incivek), which raises cure rates to almost 80 percent for hepatitis C patients, but which must be given in tandem with standard interferon.

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This week was full with news of progress from New England drug developers.

—Waltham, MA-based antibody drug maker ImmunoGen (NASDAQ: IMGN) sold 7 million shares of stock at $12 apiece. The company had $115.8 million in cash on hand at the end of March, a quarterly report showed.

—Biogen Idec (NASDAQ: BIIB) of Weston, MA, said it received a positive opinion from the committee of the European Medicines Agency, which could help pave the way sales in Europe of fampridine (Fampyra) as a new treatment for multiple sclerosis. The drug is expected to be cleared in about two months, Biogen said.

—My colleague Luke took a look at Cambridge, MA-based Bluebird Bio, a developer of gene therapies that is getting a lot of attention for its two lead programs. One is a drug focused on beta-thalassemia, a genetic disorder in which patients don’t produce enough hemoglobin; the other is a treatment for the brain disorder childhood cerebral adrenoleukodystrophy.

—Cambridge-based Vertex Pharmaceuticals (NASDAQ: VRTX) nabbed FDA approval to market its drug telaprevir (Incivek) in the U.S. as a treatment for hepatitis C. The protease inhibitor can be used as a first-line treatment or for patients who haven’t responded well enough to other treatments. Earlier this month, the FDA approved a competing treatment from Merck  for the liver-damaging disease, which affects 3 million people in the U.S.

—Radius Health of Cambridge took in $91 million in new financing to help advance pivotal Stage 3 clinical trials of its osteoporosis treatment, and merged with an unlisted shell company (“MAC”), to take on the status of an SEC-reporting company and apply to be listed on a national stock exchange. The deal included $66 million in equity funding for Radius, which is developing a bone-building drug, called BA058, modeled after human parathyroid hormone-related protein.

—Casenet, a Bedford, MA-based healthcare software maker, added $3.3 million in equity funding and increased the size of its current financing round to a targeted $15.8 million.

—Cambridge-based drug developer Proteostasis inked a strategic alliance with Ireland-based Elan Pharmaceuticals to develop treatments for neurodegenerative diseases like Parkinson’s, Huntington’s, and multiple sclerosis. Elan gave $20 million initially and could put another $30 million into Proteostasis over the next five years. in return for a 24 percent stake in Proteostais, a seat on its board of directors and scientific advisory board, and the first chance to exclusively license new drug compounds from the collaboration.

—Xconomy New York editor Arlene Weintraub talked to  Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) CEO John Maraganore, who said the company’s drug for treating liver cancer could make a big splash at this year’s American Society of Clinical Oncology (ASCO) conference on June 4. The company has more safety data on the drug than it did last year, with one of the patients in the trial having been on the drug for a year.

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We’ve been seeing some big life sciences deals in recent weeks, the latest being Nestlé’s acquisition of San Diego’s Prometheus Labs. Here’s our wrap-up of the past week.

—Switzerland’s Nestlé Health Science agreed to acquire San Diego’s Prometheus Laboratories in what one analyst estimated as a $1.1 billion deal. The Nestlé subsidiary has been on a buying spree, acquiring CM&D Pharma, which is focused on cancer and inflammatory bowel diseases, in February; and Vitaflo, which develops treatments of inherited metabolic diseases, last August. San Diego’s Prometheus, which has been in registration for an IPO since late 2007, also is a specialty pharma and diagnostics company focused on cancer and gastrointestinal disorders.

—San Diego-based Trius Therapeutics (NASDAQ: TSRX), which is developing a new generation of antibiotics for treating multi-drug resistant infections, surprised me yesterday by disclosing plans to raise $30.2 million through a private stock placement. I recently talked with Trius CEO Jeff Stein about the company’s travails in raising capital through an IPO last year, and how government R&D contracts are supporting the biotech’s early stage drug development.

—La Jolla Pharmaceutical has been an icon of San Diego’s biotech community, but preliminary data from a preclinical study of a compound the company has been studying for repairing scar tissue could spell the end of the company’s 21-year run. In a statement Monday, the biotech says its LJP1485 compound will not show a statistically significant improvement compared to a placebo. CEO Dierdre Gillespie told me in an e-mail yesterday that it will still be a few days before another update is available. The biotech has raised $428.1 million without producing any commercial therapies, according to The San Diego Union-Tribune.

—San Diego-based ResMed ( NYSE: RMD), which provides technology for treating … Next Page »

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[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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Oddball product names are one of the occupational hazards of biotech writing. Drugs in particular can be hard to spell, and often hard to pronounce. While I can practically type telaprevir, telaprevir, telaprevir in my sleep at this point, I can almost feel the reader reaction when that scientific name flows from my keyboard.

ZZZ….

Alas, there’s no Steve Jobs-style marketing whiz in this business, handing down tablets from the heavens, and bestowing upon them a magical name like “iPad.” But lately, the business of giving brand names to prescription drugs seems to have gone from boring to weird.

Check a few of the newly-coined drug names—Incivek, Adcetris, Yervoy, Viibryd, Zytiga, Xgeva. Somewhere, the folks who sell Coca-Cola must be giggling at their friends who went into pharmaceuticals. How are you supposed to create an identity for a product, when people can’t even spell or pronounce it, much less have any sense of what it means?

There’s a reason so many drug names look so weird. A good drug name is supposed to check lots of boxes. It should be easy for doctors to spell accurately when they scribble it down on a prescription pad. It should be memorable. It should be used in every country around the world without triggering some cultural confusion or sensitivity. It ought to be consistent with the science or clinical application that distinguished the product through years of development, yet the brand name shouldn’t be so geeky that it’s obtuse for patients. Ideally, you’d want it to trigger some relevant connection to your product.

It’s all easier said than done, says Vince Budd, the senior vice president at Addison Whitney, a brand consulting firm in Charlotte, NC. Besides the creative challenge of doing all that, there are legal and regulatory barriers for pharma companies. Lawyers for the drug companies watch carefully to make sure no one is infringing on any of their thousands of brand trademarks, to make sure nobody can ride the coattails of a consumer hit like Pfizer’s sildenafil (Viagra). Once a name can be shown to be unique from a trademark perspective, it’s still got a long way to go. Companies can easily spend more than a year, sometimes two years, getting through the creative process, the trademark process, and then FDA approval process.

The FDA is getting particularly tough, rejecting about four out of every 10 name proposals, because it wants to avoid medication mix-ups that can lead to dangerous—sometimes deadly—adverse reactions, Budd says. The poster child for brand confusion is Celebrex (a pain medication) getting mixed up with Celexa (an anti-depressant).

“If you want to name a potato chip, all you have to know is whether you can own the trademark,” Budd says. The effort to become uber-differentiated from everything else in pharmaceuticals, Budd says, leads to some of those new names you see. “You’re getting names that are crazier and crazier,” he says.

There are really two different of drugs to think about for naming purposes. There are drugs that are trying to reach mainstream consumers, and drugs that really only need to connect with physicians. Budd, whose firm helped name a new drug for depression, Viibryd, was hoping to convey … Next Page »

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Cambridge, MA-based Vertex Pharmaceuticals will be known as Boston-based Vertex Pharmaceuticals in the not so distant future. The biotech company (NASDAQ: VRTX) said today it has signed a 15-year lease to occupy new labs and offices being built at Boston’s Fan Pier, according to a regulatory filing. The lease will take effect when the buildings are completed, which is expected in late 2013, the company said. Vertex agreed to pay $72.5 million a year in rent for the new space, which totals about 1.1 million square feet. The lease will be terminated if Vertex fails to win FDA approval of telaprevir (Incivek) by the end of this year, although that appears unlikely. An FDA advisory panel recommended last month that it be cleared for sale, in a unanimous 18-0 vote.

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Much of the local biotech news over the past week was focused on several early stage companies, which are busily raising money and building their leadership teams. We have the latest news for you here.

—A new San Diego health IT startup, Cognitive Medical Systems, recruited a veteran software CEO to serve as president and employee No. 4. Douglas Burke joins founder Mary Lacroix, a longtime health IT executive, as the company develops services for military health IT programs that include consulting, program administration, project management, software engineering, and database design.

—San Diego’s Allylix, which is using the tools of industrial biotechnology to make complex chemicals for the flavor and fragrance market, stands to benefit from a push by the Centers for Disease Control and Prevention to develop nootkatone as a natural insect repellent. Allylix CEO Carolyn Frtiz told me her company is one of two with exclusive rights to a CDC patent on the use of nootkatone as a repellent. Allylix is already making nootkatone for the food industry. So you can rub it on or drink it! Nootkatone works wonders!

—If the college of engineering at the University of Washington is any guide, students who graduate with a degree in computer science have a better chance of landing a high-paying job than those with a degree in bioengineering. Luke discusses biotech career prospects in his BioBeat column.

—Vertex Pharmaceuticals (NASDAQ: VRTX) has given a trade name to telaprevir, the Cambridge, MA-based company’s three times a day pill for treating hepatitis C. It is Incivek (pronounced in-see-veck). Vertex is expected to win FDA approval on its new drug application by May 23.

—One of San Diego’s hottest life sciences startups is NeuroVigil, which has developed a wireless sensor and related technology to analyze human brainwave patterns. The company announced its first round of seed-stage financing, but wouldn’t disclose the amount of funding or investors.

—San Diego’s Biocept, which is developing advanced technologies for diagnosing cancer, is rapidly building its leadership. The company, which plans to launch a diagnostic test for breast cancer later this year, recruited Hybritech veterans Ivor Royston as a board member and David Hale as executive chairman. Biocept also named Lyle Arnold as a senior vice president and Chief Scientific Officer and Michael Dunn as the senior vice president for corporate development.

—On a tragic note, Christina Donaghy, the communications director for San Diego’s Optimer Pharmaceuticals, was killed in a car wreck about 25 miles north of San Diego Sunday.

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New England biotechs made news this week with approvals from FDA advisory panels, licensing deals, collaboration agreements, and lawsuits.

—An FDA advisory panel unanimously recommended the FDA approve telaprevir, the thrice-daily pill for hepatitis C from Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX). The FDA, which usually takes the recommendations of these panels, is scheduled to make its final decision on the drug on May 23.The NASDAQ halted trading of Vertex’s common stock on Thursday while the advisory committed reviewed the application. The day before, an FDA panel voted unanimously to approve Merck’s (NYSE: MRK) rival hepatitis C pill, boceprevir.

—Proteostasis Therapeutics, a Cambridge-based developer of technology to fight neurodegenerative diseases by keeping proteins in balance, said it obtained two exclusive licenses from Harvard, pertaining to the ubiquitin-proteosome pathway. It did not disclose financial terms.

—Cambridge-based Dyax (NASDAQ: DYAX)  said it will collaborate with South San Francisco-based FivePrime to discover new antibody drugs. Dyax will get technology license fees and research support and is eligible for milestone payments and royalties if FivePrime successfully develops drugs using Dyax’s phage display technology.

—My colleague Ryan wrote about KEW Group, the new Concord, MA-based cancer care startup that’s been in the formative stages for about a year and is working on raising venture money. KEW is led by Boston biotech veterans and Harvard scientists, and is working to open up a network of oncology clinics that make IT and evidence-based medicine, like genetic testing, more accessible to patients get treated at community clinics.

—Genzyme, the Cambridge-based biotech now owned by Sanofi-Aventis (NYSE: SNY), amended its patent infringement lawsuit against Anika Therapeutics (NASDAQ: ANIK) surrounding Anika’s osteoarthritis treatment, Monovis. Genzyme also filed a new complaint in U.S. District Court in Boston that includes a newly issued patent.

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Vertex Pharmaceuticals’ bid for FDA approval of its new drug for hepatitis C has been treated by most observers as a slam dunk, and the company, as expected, nailed its high percentage shot on goal today.

Cambridge, MA-based Vertex (NASDAQ: VRTX) received a unanimous 18-0 endorsement from an FDA advisory panel, which said the company’s new telaprevir thrice-daily pill deserves a spot on the U.S. market. The FDA, which usually follows the advice of its panels, is scheduled to make its final determination by May 23.

Advisors to the FDA weighed the evidence today, which said that cure rates for the chronic liver infection shot up from 40 percent to almost 80 percent when the Vertex treatment was added to a regimen of two standard therapies, as noted by Matthew Perrone of the Associated Press. Panelists paid close attention to side effects of the new drug—primarily rash—although they said the issue could be managed by educating patients and doctors through materials and a toll-free hotline.

If Vertex goes on to win FDA approval of the new drug, it will be in position to change the standard of care for a virus that infects about 3 million people in the U.S. Analysts have forecast the drug could generate more than $2 billion a year in U.S. sales within a couple years.

“Hepatitis C is a curable disease with potentially devastating consequences if left untreated, so we are pleased by the committee’s unanimous recommendation to approve telaprevir for a broad group of people with hepatitis C,” said Peter Mueller, Vertex’s chief scientific officer, in a statement. “We look forward to working with the FDA as it prepares to make its decision next month.”

The FDA’s antiviral drug advisory committee also endorsed a competing hepatitis C drug from Merck yesterday, by the same 18-0 vote. Panelists today, according to Perrone, talked about how Vertex’s treatment offered cures to a higher percentage of patients than the Merck drug did, and the opportunity to shorten courses of treatment by half. Shortening the duration of therapy is important, because it means patients will have to endure less of the flu-like symptoms that are associated with the two standard meds.

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Vertex Pharmaceuticals (NASDAQ:VRTX) faces a test today for its experimental drug for hepatitis C virus, telaprevir, as the FDA Antiviral Drugs Advisory Committee meets today in Silver Springs, MD, to review the firm’s application for approval of the treatment. NASDAQ has halted trading of the Cambridge, MA-based firm’s common stock today, according to Vertex. Yesterday the same FDA panel voted unanimously in favor of recommending approval of Whitehouse Station, NJ-based Merck & Co.’s (NYSE:MRK) hepatitis C pill boceprevir, and many industry watchers are expecting Vertex to have similar success today. An FDA staff review released on Tuesday gave Vertex’s hepatitis C pill some high marks as a treatment for the liver disease.

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Is sentiment coming together to push for FDA regulatory reform? Luke’s BioBeat column described industry efforts to shake up the FDA, and U.S. Rep. Darell Issa convened a hearing in San Diego last to collect life sciences testimony on needed reforms. We have details on all that and more.

—In a run-up to an FDA public advisory meeting today in Silver Springs, MD, Luke reported that an FDA staff analysis of data submitted for a new hepatitis C drug under development at Cambridge, MA-based Vertex shows a cure rate as high as 79 percent among patients getting their first-round of treatment. That’s better than the 75 percent cure rate reported by Vertex, which has substantial operations in San Diego. The question lingering today is whether two side effects cited by the FDA—rash and anemia—will affect the advisory panel’s recommendation concerning the Vertex drug, telaprevir.

—Dow Jones VentureSource provided more details about first-quarter venture capital activity in San Diego, including data about local life sciences deals. In contrast to the MoneyTree Report, which shows a sharp decline, Dow Jones says venture funding in San Diego was relatively flat, with $213.9 million invested in 26 deals. That includes $119.6 million invested in 13 healthcare companies in San Diego, which is almost even with the $121.6 million that was invested in 12 healthcare companies during the same quarter of 2010.

—San Diego’s Polaris Group, which seemed to spring out of nowhere, is moving to begin a late-stage clinical trial of ADI-PEG 20 for treating the most common type of liver cancer. The drug, also known as pegylated arginine deiminase, is intended to deprive tumor cells of arginine, an essential amino acid they need to survive and grow.

—San Diego’s Fate Therapeutics, which is developing stem cell therapies, has increased the size of its current equity round to $36 million and arranged for $1 million in debt financing, according to a couple of recent regulatory filings. Fate said in February that chairman John Mendlein was stepping in to run the company following the departure of CEO Paul Grayson, who is leaving to … Next Page »

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The FDA often finds a few flies in the ointment when it digs through new drug applications, but in the case of Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX), its new hepatitis C drug looks a bit better under close scrutiny. Shares of Vertex climbed more than 10 percent after FDA briefing documents on the new treatment were posted online this morning.

The U.S. drug regulator said today that its analysis of data submitted from Vertex said the cure rate climbed to as high as 79 percent among patients getting their first-round of treatment with Vertex’s telaprevir and two standard drugs—a smidge higher than the 75 percent cure rate previously reported by the company. That finding, from a study known as Advance, was released in a briefing document posted online by FDA staff ahead of a public advisory committee in Silver Spring, MD this Thursday. The FDA did, however, cite two main side effects—rash and anemia—in its safety review, and a question about the rash side effect is the first one that FDA is asking its expert advisory panel on Thursday.

The FDA’s detailed review, and the input from the advisory panel, are pivotal events in the history of Vertex, which has spent more than 20 years on its fabled quest to create what one author famously described as a “billion-dollar molecule.” If Vertex can persuade the FDA that its new medicine for hepatitis C deserves a spot on the market—and most analysts predict it will—then it will be in position to make billions of dollars and change the standard of care for this chronic liver infection that affects an estimated 3 million people in the U.S. Vertex has studied telaprevir in more than 40 studies involving 4,000 patients. It lost more than $700 million last year as part of its pre-launch push, which analysts expect will yield more than $2 billion in U.S. sales within a couple years.

Vertex shares rose $6.28, or about 13 percent, to $54.32 a share at 10:50 am Eastern time today after the FDA documents were made public. The FDA has until May 23 to make its decision on whether to clear the Vertex drug for sale in the U.S., so investors are clearly wagering based on the staff review that the new drug will soon get the green light.

The agency did hone in on side effects, but not in nearly as harsh a way as it often does with applications from other companies. Rash was reported in 56 percent of patients on the Vertex drug and a combination of two other standard meds, while only 32 percent had rash on the other two drugs alone, the FDA said. The rash was mostly mild to moderate, the FDA said, although it was severe 1 percent of the time, and caused 6 percent of patients in clinical trials to quit taking the new therapy. Many patients took antihistamines or topical steroids to manage the rash effect, but there wasn’t really data to assess how well that worked, the agency said. Researchers still don’t know why the drug is associated with rash.

Anemia, a condition which causes weakness and fatigue, was found in 36 percent of patients on the Veretx drug in tandem with the standard meds, while that effect was seen in just 15 percent of patients on the two standard treatments alone, the FDA said. The effect was mostly managed through reducing the dose of one of the standard medications—ribavirin—the agency said. Researchers also said patients on the new drug had a higher incidence of rectal side effects, like hemorrhoids and inflammation. Patients also experienced fatigue, nausea, headache, and diarrhea at higher rates on the Vertex drug—all pretty common stuff for many new drugs.

The FDA staff’s conclusion was about as kind as these documents get. It said Vertex submitted “substantial” evidence for its drug’s toxicology, clinical pharmacology, clinical virology, and clinical trial data. “We look forward to an interactive and productive discussion of the data,” FDA staff said.

The agency plans to webcast the public advisory committee on Thursday, one day after it completes a hearing for a rival hepatitis C drug from Merck. You can check the briefing document relevant to Vertex here, the agenda, and see who’s on the committee.

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