It's been a rough few days for Vertex Pharmaceuticals (Nasdaq: VRTX). Vertex announced yesterday that it was advancing its lead hepatitis C drug, telaprevir, into phase 3 trials. Nonetheless, the market promptly took its shares to lows not seen since 2005.

Many analysts had hoped that strong enough phase 2 data or a shortened phase 3 program would be enough to get the drug past the FDA and onto the market. Unfortunately, those dreams were dashed yesterday, as Vertex announced that it likely wouldn't file for approval of telaprevir in previously untreated hepatitis C patients until after final data from the phase 3 program becomes available in the middle of 2010.

The good news is that Vertex is looking to get combination telaprevir treatment approved as a 24-week regimen for hepatitis C sufferers, which would halve the duration of most patients' current interferon treatments from either Roche or Schering-Plough (NYSE: SGP). Vertex will run one large 1,050-person study with these 24-week treatment groups, plus a backup phase 3 trial with a 48-week group in case the first study doesn't succeed.

Vertex and its former U.S. partner Johnson and Johnson (NYSE: JNJ) both expect to file for approval of telaprevir in previously untreated patients by the end of 2010, which would put U.S. and European Union approval around the middle of 2011 at the earliest. The phase 3 trials are well-designed, so if the greater-than-60% efficacy rates that Vertex has experienced in phase 2 testing hold up, the studies should meet with success.

While some antiviral hepatitis C treatment rivals have closed the lead Vertex had on them to within two years (or less, in the case of Schering-Plough), the possibility remains that we could see telaprevir on the market sooner than 2011. Vertex has held the door open to a regulatory filing for telaprevir as a treatment for patients who have failed the current therapies, if the results of an ongoing phase 2b study known as "Prove 3" are strong enough.

Considering that the current standards of care in treating genotype 1 hepatitis C result in less than 50% of patients being cured, even approval for use in patients who have failed interferon treatment would present a huge market opportunity for telaprevir (not to mention that insurers would probably pay for earlier telaprevir use, even if the label didn't indicate it).

Interim data from the Prove 3 study will be available this year, and it will probably be presented at a major medical conference after the middle of the year. (My guess is the American Association for the Study of Liver Diseases in late October.) It looks like patient long-term investors won't have to wait long to see the stock gain back some of its losses.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Johnson and Johnson is an active Income Investor selection. The Fool has an A+ disclosure policy.