Macro Tsimmis

intelligently hedged investment

Vertex (VRTX) update #13

Posted by intelledgement on Tue, 24 Jun 08

We got some details from our development-stage biotech company, Vertex (VRTX), today with respect to their forthcoming phase 3 trial for telaprevir, the company’s anti-hepatitis C candidate drug…and the market was not happy.

Vertex already have one Phase 3 trial ongoing for telaprevir, focusing on treatment naïve patients. This second phase 3 trial is for patients who have tried and failed to cure their infections using the current standard of care (SOC) treatment—48 weeks of nausea-inducing interferon plus ribaviron—and the problem is that the design of the study differs significantly from the phase 2 study, even though the latter produced great results.

As reported here earlier this month, Vertex reported excellent results for patients administered an experimental 24-week treatment including telalprevir for the first twelve weeks (and interferon plus ribaviron for the whole 24 weeks):52% were still virus-free twelve weeks following the end of the treatment. Typically when such patients undertake the SOC treatment a second time, it cures them 10%-to-15% of the time.

However, the new Phase 3 trial includes tests of regimens of telaprevir for a full 48 weeks, plus another 48-week test where patients get interferon and ribavirin alone before getting any telaprevir. The focus on 48-week treatment cycles in the phase 3 trial implies that the FDA are not likely to consider accelerated approval of telaprevir based on the phase 2 results (24-week treatment cycles were employed in the phase 2 trials).

Some investors had hoped that the excellent phase 2 results—given the fact that those trials included unusually large numbers of patients—might lead the FDA to grant limited approval for the use of telaprevir in 2009 for patients whom the SOC failed to cure, which population is sorely in need of better options. The new study design appears to quash those hopes, and consequently, the stock closed down 5% today.

For our part, we remain confident that telaprevir will—sooner or later—become a critical component of the SOC for hepatitis C treatment, and that the potential there justifies hanging in here.

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