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Vertex Has a Lot to Prove

Last week, the big news from Rule Breakers pick Vertex Pharmaceuticals (Nasdaq: VRTX  ) was that final results from its upcoming phase 3 trials wouldn't be ready until the middle of 2010.

Shares of Vertex dropped 11% on the news. Investors figured that approval of Vertex's telaprevir -- not just in the United States, but also in Europe with partner Johnson & Johnson (NYSE: JNJ  ) -- wasn't likely until the middle of 2011 at the earliest. This is a far cry from the possible New Drug Application filing in 2008 that Vertex was forecasting for investors as recently as last year.

Approval of telaprevir in new hepatitis-C patients who haven't been treated yet with any drugs (so-called treatment-naive patients) is likely off the table until 2011. But there is still the possibility that telaprevir could be approved as a treatment for hepatitis-C patients for whom previous drugs have failed (so-called treatment-experienced patients). This is because Vertex is running a more than 400-person phase 2 trial -- confusingly dubbed Prove 3 -- testing telaprevir in treatment-experienced patients.

Since there are so few drugs available for treatment-experienced hepatitis-C sufferers, Vertex might file for approval of telaprevir in treatment-experienced patients if the results of the Prove 3 study are good enough.

There are two questions here: What sort of data has telaprevir produced in treatment-experienced patients, and can we use that data as a guide to how the Prove 3 trial will turn out? It turns out that, unfortunately, telaprevir has only been tested in one small phase 1b study in treatment-experienced hepatitis-C patients, and it was a very short 14-day study back in 2005. Also, both treatment-naive and treatment-experienced patients were enrolled in the study, making any extrapolations from its results nearly impossible.

So what sort of efficacy results will telaprevir have to produce in the Prove 3 study to get regulatory approval? Vertex doesn't know for sure. In its most recent conference call last week, the company said the data would have to be "compelling" in order for telaprevir to be approved by the FDA based on the Prove 3 study. Interim data from the study will be available around May of this year, and the study should be completed in May 2009.

In recent clinical trials, pegylated interferons (the current standards of care for HCV treatment) from both Schering-Plough (NYSE: SGP  ) and Roche produced up to 16% cure rates in different studies in treatment-experienced patients who didn't respond to previous hepatitis-C therapies. In phase 2 results announced last year, Schering-Plough's protease inhibitor boceprevir produced up to 14% cure rates, compared to only 2% of patients in a control arm in a study with a similar patient population.

My wishy-washy prediction for the Prove 3 study: Based on the recent interferon retreatment data in HCV non-responders, telaprevir will probably have to reduce the hepatitis-C virus to undetectable levels in at least 30% of patients in order to have a shot at getting approved in late 2009. Considering that the drug produces cure rates in the 60% range in treatment-naive patients, generating that kind of efficacy data in treatment-experienced patients will be tough -- but not impossible.

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DocumentId: 563719, ~/Articles/ArticleHandler.aspx, 10/22/2016 2:37:49 PM

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