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http://www.reuters.com/article/marketsNews/idUKBNG28853220070810?rpc=44

UPDATE 2-ViroPharma halts hepatitis C trial; shares plunge
Fri Aug 10, 2007 12:59PM EDT
By Toni Clarke

BOSTON, Aug 10 (Reuters) - ViroPharma Inc. (VPHM.O: Quote, Profile, Research) said on Friday it has halted a clinical trial of its experimental hepatitis C drug because of safety concerns, sending its shares down as much as 27 percent.

ViroPharma, which is developing the drug, HCV-796, with partner Wyeth (WYE.N: Quote, Profile, Research), said some patients developed elevated liver enzymes, a warning signal for liver damage. In two patients, those enzymes have not decreased weeks after being taken off treatment.

The companies said they plan to analyze the data before deciding whether to continue development of the drug, but some analysts believe it is dead.

"Liver toxicity is one of the worst problems you can have in drug development," said Jason Kolbert, an analyst at Susquehanna Financial Group.

The possible demise of ViroPharma's drug is the latest in a series of problems for companies developing drugs for hepatitis C, a blood-borne virus that destroys the liver and affects roughly 4 million people in the United States.

Last month Idenix Pharmaceuticals Inc. (IDIX.O: Quote, Profile, Research) said it had written off its experimental hepatitis C drug after U.S. regulators ruled that the risks associated with it outweighed the benefits.

In the same month, Anadys Pharmaceuticals Inc. (ANDS.O: Quote, Profile, Research) said it was discontinuing its experimental hepatitis C drug because of safety concerns. And shares of InterMune Inc. (ITMN.O: Quote, Profile, Research) have fallen 16 percent over the last three weeks after it said there would be a delay to its hepatitis C drug development program.

"This serves as another reminder of the difficulty of developing drugs for liver diseases," said Karen Andersen, an analyst at Morningstar.

ViroPharma's shares were down $2.04, or 20 percent, to $8.18, in afternoon trading on Nasdaq. They had gone as low as $7.51 earlier in the session.

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