Analysts see Vertex as top hepatitis C drug developer

Vertex Pharmaceutical Inc.'s hepatitis C drug telaprevir will likely dominate the market and its rival, Schering-Plough Corp.'s boceprevir, according to several analysts.

The companies presented dueling data on each of their developing hepatitis C drugs at the 43rd annual meeting of the European Association for the Study of the Liver last week. Analysts said telaprevir showed the most promise.

"We maintain that boceprevir should eventually be approved but its potential to garner significant market share is unclear due to an inferior profile and uncertainties about the timing of Phase III (clinical trial) initiation," Cowen and Co. analyst Steve Scala said in a note to Schering-Plough investors.

On Saturday, Schering-Plough said an interim analysis of midstage study results showed the drug candidate prompted an immune response in patients. But, earlier in the week, Vertex showed that telaprevir prompted a higher response rate.

"Following underwhelming competitor clinical data we believe Vertex's telaprevir will play a dominant role in the treatment of hepatitis C," Wachovia Capital Markets analyst George Farmer said in a note to Vertex investors.

Hepatitis C is a blood infection that can cause liver inflammation and possibly liver cancer. Both companies plan to move their respective drug candidates into late-stage development, where effectiveness will be tested on larger groups of patients. Though Wall Street is leaning toward telaprevir as the market leader, it is the Phase III, or late-stage, study that will really prove a drug's effectiveness.

Though telaprevir's recent results set it up as the likely top drug, said Oppenheimer & Co, analyst Dr. Brian Abrahams, boceprevir could still pose a threat.

"We believe boceprevir's clear activity and reasonable safety do warrant further development," he said, adding that the Schering-Plough data substantially reduce, but do not completely eliminate, a long-term competitive overhang on Vertex.

Shares of Kenilworth, N.J.-based Schering-Plough Corp. rose 8 cents to $18.72, while shares of Cambridge, Mass.-based Vertex Pharmaceuticals Inc. rose 15 cents to $25.87 in afternoon trading.