Vertex Doesn't Disappoint

Vertex Pharmaceuticals (Nasdaq: VRTX) has been on a roll with its recent drug data. Yesterday, the Rule Breakers newsletter pick presented even more good news with its latest study results from a phase 2 trial of its hepatitis C compound, telaprevir.

The company's issued many telaprevir data releases in the past couple of months, but the interim results announced yesterday were the first from the drug's third and final big phase 2 study.

In this study, labeled PROVE-3, telaprevir was tested as a treatment for hepatitis C patients who weren't cured of their disease after taking other therapies. This is a huge market opportunity for any hepatitis C drug, because the current standard-of-care treatments from Roche and Schering-Plough (NYSE: SGP) only succeed in around 50% of patients.

In this peek at the PROVE-3 data midway through the trial, 52% of patients who received telaprevir had undetectable levels of hepatitis C in their bloodstream 12 weeks after treatment ended. In the drug's other phase 2 clinical trials, this 12-week post-treatment result has held up in the long run, so it's probably safe to say that telaprevir will have cured most (if not all) of these 52% of patients' hepatitis C infections.

In past studies, other compounds like the pegylated interferons from Roche and Schering have been less than half as successful (at most) in similar patient groups. Vertex likely won't say what the next step for telaprevir is until after this phase 2 study finishes next year, but it wouldn't surprise this Fool if Vertex tried to get telaprevir on the market for so-called "treatment-experienced" patients even before it completes its phase 3 program.

Vertex has already made plans to start phase 3 testing of telaprevir in multiple different hepatitis C patient groups; the results of these studies will be available around 2010. If Vertex doesn't try for early telaprevir approval and waits for the completion of its phase 3 program, its earliest possible approval date in the U.S. for Vertex, and for marketing partner Johnson & Johnson (NYSE: JNJ) in the European Union, would be sometime in 2011.

While competition from Schering's hepatitis C compound, boceprevir, and rival drugs from other hep C drug developers like InterMune (Nasdaq: ITMN) may eventually be more intense than currently expected, telaprevir's efficacy and safety data has failed to disappoint through numerous clinical trials. PROVE-3 seems set to be another successful study for telaprevir when it's completed next year.