Careers can be made in the drug development business on a single drug like telaprevir, the hepatitis C treatment from Vertex Pharmaceuticals (NASDAQ:VRTX). If it gets approved, the drug has the potential to become a leading treatment for the chronic liver disease—and to make a multibillion-dollar fortune for Cambridge, MA-based Vertex—within the next few years.
So it’s a bit of shocker to people when they find out that the pharmaceutical powerhouse Eli Lilly (NYSE:LLY), which collaborated with Vertex to discover telaprevir, gave away almost its entire stake in the drug back in December 2002. Indianapolis-based Lilly began working with the smaller Vertex to discover drugs for hepatitis C virus in 1997, and telaprevir emerged as the two companies’ lead compound in the program in 2001.
Jump ahead to this spring. Vertex, which has West Coast operations in San Diego, reported in May that telaprevir passed a pivotal test, curing three out of four patients with the disease in a Phase III clinical trial, a major hurdle in its bid to gain FDA approval of the drug. The drug, known as a protease inhibitor, is considered by some a breakthrough because it has shown that it can cure patients at the twice the rate of existing therapies. Company executives say they hope to garner permission to begin sales of the drug in 2011.
While those results have helped Vertex build up a $7 billion market capitalization, hardly anybody remembers who could have been its early collaborator. Lilly played a key part in developing and funding early research of the drug, which analysts now project could become a $2 billion annual seller in the U.S. alone within two years of its potential launch. It’s a decision that Lilly has to regret, given that telaprevir’s potential has made Vertex the third most valuable biotech company based in Massachusetts, behind only Genzyme (NASDAQ:GENZ) and Biogen Idec (NASDAQ:BIIB).
“Telaprevir would not exist if Lilly hadn’t been … Next Page »
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