Biotech Values

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Vertex Hep-C Drug Shows Promise
By Adam Feuerstein
Senior Writer
http://www.thestreet.com/_yahoo/newsanalysis/biotech/10350400.html?cm_ven=YAHOO&cm_cat=FREE&...

4/15/2007 One of the big knocks against Vertex Pharmaceuticals (VRTX) has been that the data surrounding its hepatitis C drug telaprevir was a bit thin compared with the hype and expectations enveloping it.

But the divide between hype and reality is definitely starting to narrow, especially after Saturday, when researchers presented new clinical data on telaprevir that shows the drug having a profound, and positive, effect in the treatment of hepatitis C.

Vertex shares closed Friday down $1.39, or 4%, to $30.16.

There is still a lot unknown about telaprevir and what its ultimate role in hepatitis C treatment will be, but the weight of evidence is growing to suggest that the drug, at the very least, might cut in half the treatment duration for hepatitis C patients. It might also increase the number of patients cured of the disease.

If one or both of those things happens, telaprevir could be the billion-dollar molecule that Vertex CEO Joshua Boger has long searched for.

Telaprevir is a pill designed to attack hepatitis C by inhibiting the protease enzyme, one of the key enzymes the virus uses to copy itself. This "direct antiviral" approach differs from current hepatitis C drugs, which boost the immune system's ability to tamp down and eliminate the virus.

The current standard of care for hepatitis C patients is a weekly injection of long-acting alpha interferon combined with daily oral doses of a generic drug, ribavirin. A normal treatment course for Type 1 hepatitis C (the most prevalent form) takes 48 weeks to complete. But the standard treatment cures only about half of patients, and many patients find the side effects, such as flu-like symptoms, anemia and depression, difficult to tolerate.

Promising Results
The Vertex phase II studies underway are testing to see whether telaprevir plus various combinations of interferon and ribavirin (the standard treatment) can increase cure rates and/or shorten the duration of treatment. Researchers presented interim results from one of these studies, dubbed PROVE 1, at a European liver disease meeting held in Barcelona.

Of the 175 hepatitis C patients receiving telaprevir plus standard therapy in the PROVE 1 study, 79% reported having undetectable levels of virus in their bloodstream four weeks into treatment. By comparison, 11% of the 75 patients receiving placebo plus standard therapy reported having an undetectable viral load.

Beating back the hepatitis C virus to undetectable levels after just four weeks of treatment is what is known as a "rapid virologic response," or RVR. Previous studies of standard therapy alone have shown that patients who achieve an RVR can be treated for shorter periods of time (24 weeks instead of 48) and are more likely to become cured of hepatitis C.

Side Effects
Telaprevir's ability to greatly increase the percentage of patients who achieve RVR bodes well for the experimental drug. But this efficacy may not come without costs. Through 12 weeks of treatment, 11% of telaprevir patients discontinued the study, vs. 3% of patients in the placebo arm. The most common reason for telaprevir patients to stop using the drug was rash, reported by seven patients. Patients also reported gastrointestinal problems and anemia.

While doctors at the Barcelona meeting said the telaprevir rash was manageable and treatable, anecdotal patient reports have suggested the rash is severe and a significant obstacle to completing treatment.

Michael Partridge, a Vertex spokesman, says the overall dropout rate so far in the Prove 1 study was relatively low. He said the rash reported may not be distinguishable from rash often reported in patients taking ribavirin but added that the company and its researchers continue to monitor it.

As I discussed in a previous column, many investors were anxiously awaiting the results of a particular arm (Arm D) of the PROVE 1 study that gave patients telaprevir plus standard therapy for a relatively short 12 weeks. Researchers then stopped treatment for these patients altogether but followed them to determine what happened to the hepatitis C virus in their systems.

As reported Saturday, 17 patients were enrolled in Arm D, but only nine of them made it through all 12 weeks of treatment. Of these nine, six had undetectable levels of virus measured 20 weeks after treatment stopped.

A 66% "cure" rate at 20 weeks is good, but the small number of patients makes the result difficult to interpret. Furthermore, the high number of patients who either discontinued treatment or relapsed after treatment raises questions about the viability of treating patients with only 12 weeks of telaprevir and standard of care.

It's likely that investors will view the Arm D results as somewhat of a disappointment.

Vertex's Partridge says Arm D is a proof of concept and that more data is necessary before passing judgment. A European version of PROVE 1 -- dubbed PROVE 2 -- is enrolling more patients and will provide a more definitive answer.

As I said above, exactly how long patients will require treatment is one of the unknowns about telaprevir. Additional data to be presented later this year from PROVE 1 and PROVE 2 should clarify this.

As it stands, however, Vertex believes that telaprevir will be dosed for 12 weeks, with standard of care (interferon plus ribavirin) dosing likely to last 12 to 24 weeks. (At its longest, that's 12 weeks of triple combination plus another 12 weeks of standard therapy.) Recall that current standard treatment calls for interferon and ribavirin to be dosed for 48 weeks.

The benefit shown by telaprevir does continue past four weeks, according to additional data presented Saturday.

After 12 weeks of treatment, 70% of telaprevir patients reported undetectable levels of virus compared to 39% of patients in the placebo arm.