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Schering starts hepatitis C trials, Vertex falls
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Reuters, Wednesday May 21 2008
By Ransdell Pierson
NEW YORK, May 21 (Reuters) - Schering-Plough Corp said on Wednesday it has begun two late-stage trials of its experimental boceprevir treatment for hepatitis C, lifting its shares and bringing down those of rival drugmaker Vertex Pharmaceuticals Inc.
The new medicine works by blocking the so-called protease protein that the hepatitis C virus requires to reproduce itself, the same mechanism used by Vertex's experimental drug telaprevir, which is further along in development.
Schering-Plough and Swiss drugmaker Roche Holding AG sell similar pairs of standard treatments for the liver-harming disease -- an injectable form of interferon and an antiviral pill called ribavirin. Those drugs often produce hard-to-tolerate flu-like symptoms.
The protease inhibitors, when combined with standard treatments, hold the promise of eliminating the virus from the bloodstream in substantially less time than the current 48 weeks, potentially halving the time patients must deal with the difficult side effects.
Schering-Plough said its phase III trials will study boceprevir in combination with PegIntron -- the company's widely used interferon -- and ribavirin. That triple-drug combination will be tested against PegIntron and ribavirin alone.
The trials will involve a total of more than 1,400 patients infected with the genotype 1 strain of hepatitis C -- the most common and most difficult to treat form.
Vertex began its own phase III trials of telaprevir in March, and data are expected to be available by mid-2010.
Cowen and Co analyst Rachel McMinn said Vertex shares fell because Schering-Plough's trials would begin sooner than expected, meaning Vertex would not have as big a head start as Wall Street had assumed.
"We had thought the boceprevir phase 3 trials would start in early 2009. They're still theor etically a couple of months behind telaprevir, but in the grand scheme of things not as far behind as some people had believed," she said.
Thomas Russo, an analyst with Robert W Baird, recommended buying Vertex on the stock's sell-off.
"Schering-Plough's surprise announcement changes the expected timeline but does not change the story," he said.
"In our view, Vertex's telaprevir is the superior best-in-class product and the timeline for boceprevir is not critical to telaprevir's commercial success."
The largest of the planned boceprevir studies will enroll more than 1,000 patients that have never previously been treated for the virus, who will receive either 28 or 48 weeks of treatment. The smaller trial -- involving either 36 or 48 weeks of treatment -- will enroll patients who have failed to eliminate the virus with prior treatment.
All patients in the two trials will receive four weeks of treatment with PegIntron and ribavirin before boceprevir is added to their drug regimen.
The main goal of the trials will be achievement of sustained virologic response -- meaning elimination of all traces of hepatitis C, without evidence of the virus returning.
The virus is believed to infect more than 2 million Americans and in past decades was spread mainly by blood transfusions. Now more commonly spread by sharing of needles and sexual contact, it typically harms the liver for decades before symptoms emerge.
Damage from the virus is the main reason for liver transplants.
Shares of Schering-Plough were up 16 cents, or 0.8 percent, to $19.42 on the New York Stock Exchange. Vertex shares were off $1.63, or 5.9 percent, to $25.85 on Nasdaq after sinking as low as $25.01 in earlier trading. (Additional reporting by Bill Berkrot) (Reporting by Ransdell Pierson, editing by Gerald E. McCormick, Richard Chang)
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