Well, I suppose we'll have to see what comes out in terms of analyst/media coverage on this whole Vertex/Schering situation.
I agree with Dew on the point that the most important part - still remains the fact that the timing got pushed out.
I'm sure we'll get some clarification soon.
some excerpts from analyst reports from today:
CITIGROUP analyst report:
Vertex Pharmaceuticals Inc (VRTX)
Too Much Competition and No Catalysts, Downgrading to Hold
Conclusion(s) — We are downgrading Vertex to Hold (2S) based on the lack of
catalysts in '08 and the encroaching competition to telaprevir that should make
HCV a crowded market. Even though we are encouraged by the announcement
to start ph 3 by March, we are concerned that a launch is only likely in H2:11,
and near-term financing needs could continue to pressure the stock. In
addition, the need for a 48-wk dosing ph 3 study may lead to investor concern
surrounding what treatment regimen will be approved for telaprevir.
What's New — Vertex announced plans to advance telaprevir into two ph 3
studies by March without conducting any further ph 2 studies. One study will
test 24 wks of treatment of telaprevir with standard of care (12 wks+12 wks or
8 wks+16 wks) followed by another 24 wks of the standard of care alone. The
second study will test 48 wks (12 wks+36 wks) with telaprevir and the standard
of care. Vertex also announced that SVR12 for the control arm in PROVE 1 was
37%, vs. 61% for the 12+12 week telaprevir arm.
No Catalysts — Besides PROVE 3 results, we see no catalysts ahead for Vertex
and a flood of competitor data later in the year. This includes SGP's boceprevir
ph2, Tibotec's TMC435350 ph1b and ph2a, Intermune's ITMN-191 ph1b,
Roche's R1626 ph2b and Pharmasset/Roche's R7128 complete ph 1b.
Changes to Our Model — We are reducing our telaprevir U.S. penetration in '11
to 10% and in '12 to 25% (from 20% and 30% previously) to reflect a delay in
launch. We further modified our estimates for the outer years to include
promising new competitors. Our new target price is $25 ($52 previously).
This is what Bear Stearns published today:
EXPECT LAUNCH IN 2011. Depending on competitor filing timelines & ph 3 designs, a
2011 launch for Telaprevir could erode any lead-to-market advantage we had envisioned. We
believe concerns about a delayed launch & increased competition could remain as overhangs
in near term, though the possibility of an earlier filing for TVR exists based on robust PROVE
3 data (expected around mid-08).
Baird Capital report today:
Telaprevir is not alone, however, and it has yet to get through Phase III. Vertex's
protease inhibitor, telaprevir, is not alone in targeting HCV, with the most notable
competition coming from SGP's Phase II boceprevir
A second trial comparing a "12+36" telaprevir-based regimen to 48 weeks
standard-of-care will also be required, which may create new questions for investors
Merrill Lynch report today:
Timeline represents a one-year delay to our model
The program is not meaningfully different from our expectations. However, the
phase III development program timeline puts an NDA filing in the latter half of
2010, with a potential launch in H2/2011. We had previously been modeling a
launch during 2010. We expect the company to raise additional capital to fund the
phase III program (2007E YE cash of >$450mn). Assuming a $500mn (ML
assumption based on pro forma model) equity raise during 2008 and a one-year
delay, we estimate a valuation range of $21-25 based on 25-30x our 2013E EPS
of $2.03. Our Neutral rating remains unchanged.
For all of you out there that needed a refresher, here was the original Pharmawire article:
17-Jan-08 03:12
Vertex Pharmaceuticals' lead drug telaprevir may not be first-to-market; Schering's boceprevir may take market advantage – sources
Story
by Sasha Damouni and Kimberly Ha
Vertex and Johnson & Johnson's telaprevir drug are widely anticipated by the market to be the first Hepatitis C (HCV) protease inhibitor to reach the market. However, industry executives have said that telaprevir will now reach the market much later than anticipated. Vertex shares have lost at least 40% of their value in the last three months.
Telaprevir was previously anticipated to be on the market by 2009 - at least one year ahead of closest competitor Schering-Plough's drug boceprevir. According to industry sources, Vertex's telaprevir may now reach the market later than Schering's drug.
An executive at Chimerix, a biotech company developing orally available antiviral therapeutics, said telaprevir "would likely see approval" in 2012 or 2013 – and no sooner. He speculated that the FDA would ask Vertex to conduct another, larger Phase II study. A second industry executive concurred with this view.
A Vertex spokesperson said the company is discussing its existing Phase II data with regulatory authorities worldwide and we have proposed a Phase III design. “We look forward to concluding discussions with regulatory authorities and initiating Phase III,” he said. Vertex management has given a fairly aggressive timeline regarding the drug’s development progress. Phase III trials were supposed to start last year - but have been delayed until 1H08.
Successful treatment in HCV is called a Sustained Virologic Response (SVR) – which means that the HCV is no longer detectable in blood tests for at least five months after the 48-week treatment.
Kurt Graves, Vertex's executive vice president, chief commercial officer said Schering's boceprevir is at least one year behind telaprevir's development. "There are a second group of competitors much earlier in development," he added.
Graves added that PROVE III results should be available this year. PROVE III is a Phase IIb clinical trial of telaprevir-based combination therapy in patients with genotype-1 HCV who have not achieved a SVR with a previous pegylated interferon-based treatment.
The timing of Schering's drug boceprevir really depends on the profile of the drug, as we do not know the Rapid Virological Response (RVR) data. Schering will likely conduct a 48-week therapy with the drug, added Graves.
Robert Consalvo, a spokesperson for Schering, said based on current estimates boceprevir should reach commercialization in 2010. Phase II results showed that patients on boceprevir had a dramatic improvement over the control arm. Up to 79% of patients had undetectable virus at week-12 of treatment compared to 34% of patients in the control arm.
"What kind of sustained virologic response remains to be seen," said Consalvo. Schering will present boceprevir SVR data this year.
Two large Phase II trials of Vertex's drug telaprevir dosed in combination with Pegylated Interferon and Ribavirin showed SVR rates of 61% and 65%. These rates were lower than what was expected by the market.
Dr Sonal Singh, an internist at Wake Forest University School of Medicine, said “we need data from the Phase II designs as well as assurance that SVR will be maintained for 48-weeks before embarking on the Phase III design. I hope the FDA adopts the more prudent and cautious approach.”
Vertex has submitted a Phase III protocol to the FDA for review. The submitted Phase 3 trial design includes a 48-week control arm and both 8 and 12 weeks of telaprevir treatment as part of 24-week combination treatment regimens. It plans to use rapid viral response (RVR) criteria to determine which patients stop all treatment at 24 weeks.
There has been no new HCV drugs on the market since the FDA's approval of Schering's interferon drug, Pegintron in 2001 - and Roche's interferon product Pegasys in 2002. There is therefore a clear unmet need for new drugs to treat Hepatitis C, as the current treatment regimen is 48-weeks of therapy with ribavirin and interferon products - which cause significant side-effects such as anemia, rash, and nausea.
Schering's Consalvo said that obviously these new protease inhibitors will have to show benefit and shortened treatment timeframes - but SVR is ultimately the goal.
"The idea of shortening therapy is good, but if there is meaningful SVR with longer therapy, then more patients will choose that," said Consalvo. The general belief is that if you can increase efficacy with a shorter treatment duration, then more people will be encouraged to seek therapy - as a large population of HCV patients still remain undiagnosed. Rachel McMinn, an analyst at Cowen and Co. believed that as long as SVR rates are 10%+ points higher than standard of care alone, physicians would absolutely layer on another drug, based on feedback she has received from physicians.
In Schering's boceprevir trials, patients that had the best response rates were on higher doses (800mg) and had at least 36-weeks of therapy, said Consalvo. "Vertex did a similar thing, one trial arm is without ribavirin. The response isn't as good, so [we're] not exploring that potential," said Consalvo.
An investor from Healthcor added that Medivir is a competitor, but Vertex's Graves remained skeptical on whether the FDA would seriously consider Medivir's HCV drug without a definitive Phase II study results over a 48-week treatment duration.
Tibotec is currently partnered with Vertex in developing telaprevir overseas, but also has a partnership with Medivir. Swedish pharmaceutical Medivir also has a Phase II HCV protease inhibitor in development.
Graves said Vertex is doing two fundamental studies with telaprevir: “In the first 12 weeks, 6-7% of patients discontinued use of the drug as a result of developing a rash.”
If Vertex faces any developmental delays from the FDA, this will have a huge impact on the first-to-market advantage that telaprevir supposedly has over the dozen pharmaceutical companies developing HCV protease or polymerase inhibitors, which includes Idenix, Novartis, Gilead Sciences.
Vertex expects to provide an update no later than 11 February 2008 in an investor conference call.