The End for (Another) Hepatitis C Drug Candidate

The Tufts Center for the Study of Drug Development estimates that only one out of every five drugs that go to phase 1 clinical trials is ever approved by the Food and Drug Administration. On Wednesday, ViroPharma (Nasdaq: VPHM) and Wyeth (NYSE: WYE) announced that HCV-796 joined the long list of compounds that have failed in clinical testing.

HCV-796 was the two companies' antiviral non-nucleoside polymerase inhibitor that was intended to treat hepatitis C. Last year, the partners reported mixed phase 2 results for the drug: The HCV-796 combination therapy produced solid benefits for patients, compared with using only the currently approved hepatitis C standards of care. The problem was that the drug also elevated some patients' liver enzyme levels (which could indicate future liver problems if not corrected), so ViroPharma and Wyeth decided to halt continued dosing of the drug but continued to track patients in the study.

Apparently, ViroPharma and Wyeth weren't impressed enough to go forward with HCV-796, deciding to cancel any more testing and shut down their hepatitis C collaboration. Along with changes in a patient's QT interval (a portion of heart rhythm), raised liver enzymes are a top reason why many drugs fail in clinical testing.

The story of HCV-796 and other antiviral compounds like Idenix's (Nasdaq: IDIX) valopicitabine or Boehringer Ingelheim's protease inhibitor should serve as a reminder of the risks involved in drug development and the safety issues that many antiviral hepatitis C compounds in development have experienced.

It's easy to forget that a drug that is shown to be effective can still be a clinical or commercial failure if there are other, adverse effects. This is something that all investors and analysts (like myself) should keep in mind when getting excited about some of the blowout short-term data seen in other hepatitis C antiviral compounds like InterMune's (Nasdaq: ITMN) ITMN-191 or Pharmasset's (Nasdaq: VRUS) R7128.