From the drop in Vertex Pharmaceuticals' (NASDAQ:VRTX) share price yesterday, you'd think that drug development in the hepatitis C space was a zero-sum game. Shares of Vertex fell 13% after the announcement of strong results in clinical trials from rival Schering-Plough (NYSE:SGP).

The data Schering posted yesterday were phase 2 clinical trial results of its hepatitis C virus (HCV) drug candidate boceprevir. Vertex shares slumped because boceprevir is in the same class of therapies that Vertex's telaprevir is in. Both are protease inhibitors being tested as treatments for genotype 1 HCV, the most common subtype in North America.

I won't go into the study details here; more important for investors is what the positive results -- for Schering or any other competitor -- mean to Vertex. The FDA approved Schering's interferon drug, Pegintron, in 2001, and approved Roche's similar interferon compound, Pegasys, in 2002. But since then, no new, effective treatments for hepatitis C have entered the market.

This is all about to change. More than a dozen drugmakers have been working on oral antiviral drugs for the disease, including ViroPharma, Achillion, Gilead Sciences (NASDAQ:GILD), Idenix, Pharmasset (NASDAQ:VRUS), Roche, InterMune (NASDAQ:ITMN), Abbott Laboratories (NYSE:ABT), Novartis, and Boehringer Ingelheim, as well as Schering and Vertex.

With nearly every major pharmaceutical firm working on developing an antiviral compound, there will be new hepatitis C treatments on the market in the next decade, perhaps sooner. Anyone wanting to know how the hepatitis C treatment landscape will look in 10 years only has to realize what has happened to the HIV treatment space over the past decade, thanks to antiviral treatments.

Several antiviral treatments are on the market for HIV, and many are used in combination therapies. This will likely be the case for HCV drugs as well. Based on how they perform in the clinic, the top hepatitis C protease inhibitors -- like Vertex's telaprevir -- will likely be combined with synergistic polymerase inhibitors like Pharmasset's R7128, Roche's R1626, or the currently approved interferons.

In the race to develop the first antiviral compound, Vertex and Johnson & Johnson's (NYSE:JNJ) telaprevir is still in the lead by at least a year. Even if other antiviral drugs are approved, there will be plenty of room for competitors thanks to the size of the HCV market and the viral resistance that occurs in some patients.

Just as there is for HIV treatments, there will be room for multiple billion-dollar blockbuster combination HCV therapies. Would boceprevir's appearance on the market hurt Vertex? Perhaps somewhat, but Vertex will do just fine as long as telaprevir continues to perform so strongly in the clinic.

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