This weekend demonstrated what a difference a year makes for Cambridge, MA-based Vertex (NASDAQ: VRTX). At the annual meeting of the American Associaton for the Study of Liver Diseases in Boston Nov 9-13, Abbott Laboratories (NYSE:ABT) and Gilead Sciences (NASDAQ: GILD), along with a few other companies, presented promising data on new paradigms for the treatment of hepatitis C. But none of those presentations came from Vertex, even though the company has dominated the market after its breakthrough drug telaprevir (Incivek) was approved in May 2011.
Vertex won FDA approval for telaprevir, a protease inhibitor, a few days after a similar treatment from Merck (NYSE:MRK) named boceprevir (Victrelis) was okayed. Both drugs boosted the response rate of the standard treatment, injectable interferon, from 40 percent to almost 80 percent, and they were the first new drugs for hepatitis C in more than 10 years. Telaprevir soon dominated the market—but that was then.
At this year’s liver meeting, most of the attention focused on the progress in developing oral drugs that eliminate the need for interferon, but none of those reports came from Vertex, which is far behind on this next treatment paradigm. And while shares of Vertex have been languishing since the company reported on Nov 1 a 25 percent drop in telaprevir sales from the year ago quarter, Gilead’s stock rose almost 14 percent on Monday to close at an all-time high of $73.93 on its data coming out of the liver meeting.
Meanwhile, Vertex’s stock dropped 2.24 percent on Monday to $44. That at least is an improvement over its performance in response to last year’s liver meeting, when Vertex stocks dropped 17 percent over two days as potent hepatitis C rivals started emerging.
The standard treatment for hepatitis C is injections of interferon combined with the antiviral ribavirin, but interferon can cause flu-like symptoms so severe that many patients drop off the treatment. Although Telaprevir doubles the effectiveness of interferon, but the ideal would be to eliminate interferon and injections, all together. About three million people in the U.S. have been diagnosed with hepatitis C, and 170 million people worldwide, so better treatments are desperately needed. Plenty of companies are in the race to come up with one, and industry analysts are projecting the market for oral, non-interferon treatments will reach $15 billion a year in revenues at its peak.
Gilead, based in Foster City, CA, and Abbott, in Abbott Park, IL, are currently leading the race to develop non-interferon oral treatments, but the enthusiasm at the meeting was greatest for Gilead’s results. Its therapy combines two experimental drugs with ribavirin: sofosbuvir, which Gilead acquired when it paid $10.8 billion for Pharmasset in January, and GS-5885. In a 12-week trial with 25 patients who had not previously received any treatment, the company reported on Saturday that the treatment eliminated all traces of the virus in 100 percent of the patients, an unprecedented result. Those results were almost replicated, in a late breaking study presented Monday by Bristol-Myers Squibb daclatasvir (NYSE: BMS). In this 12-week study sofosbuvir was combined with Bristol-Myer’s experimental hepatitis C drug, daclatasvir , without ribavirin, and produced a 98 percent response rate.
The Abbot regimen, developed in partnership with Enanta Pharmaceuticals of Watertown, MA, combines ribavirin with three experimental drugs instead of Gilead’s two, and some biotech analysts have already said the fewer pills gives Gilead an edge. At the liver meeting Abbott reported a 97 percent response rate with its combination in patients who have not been previously treated, and a 93 percent response rate in patients who had failed all other treatments. A year ago, Abbot’s results would have been considered outstanding, but now the company must contend with Gilead’s perfect game. Gilead is already in a Phase 3 trial with its regiment, while Abbot is enrolling patients for its own Phase 3 trial.
Merck, based in Whitehouse Station, NJ, also reported promising data about MK-5172, meant to be a more potent successor to boceprevir, its drug that was approved in 2011. The company said that patients given MK-5172 with interferon had a 96 percent response rate after 12 weeks, compared with 54 percent for boceprevir alone. Although the response rate was impressive, the combination still required interferon. Merck said it will next test the treatment without interferon.
But Germany’s Boehringer Ingelheim beat Merck to it, announcing at the meeting a response rate of up to 85% in an interferon-free regimen involving its experimental drugs faldaprevir and BI 207127. Boehringer said that, based on those results, it is starting a Phase 3 clinical trial that will enroll 1,200 patients.
As my colleague Luke Timmerman wrote last December, “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.” But the liver meeting demonstrated that all that maneuvering may allow millions of hepatitis C patients to throw away their needles in just a few years.
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