Staff Writer

Much-anticipated data from Vertex Pharmaceuticals Inc.'s first Phase III trial of hepatitis C virus (HCV) protease inhibitor telaprevir lived up to investors' high expectations.

That's likely the reason Vertex's stock (NASDAQ:VRTX) gained just 79 cents, or 2.3 percent, to close at $34.74 on Wednesday. The Phase III data were solid indeed, but investors had expected nothing less. Even so, telaprevir is now the first direct-acting antiviral agent to succeed in Phase III HCV trials, so Vertex Chief Medical Officer Robert Kauffman was justified in saying the "groundbreaking" data will fundamentally change the treatment of HCV.

The HCV standard of care (SOC), ribavirin plus pegylated interferon, often comes under fire for its 40 percent to 50 percent cure rate and significant side effects.

In Vertex's Phase III trial, 75 percent of patients achieved a cure, or sustained viral response (SVR), after receiving 12 weeks of telaprevir plus SOC followed by SOC alone, compared to just 44 percent of patients receiving only SOC (p < 0.0001).

Additionally, 69 percent of patients receiving the same regimen but with only eight weeks of telaprevir also achieved an SVR (p < 0.0001).

Analysts said the eight-week data could reassure doctors of telaprevir's benefit even if a patient doesn't comply with the full course of treatment or if treatment must be stopped early to control side effects.

Yet side effects were not a significant problem in Vertex's Phase III trial. Adverse events leading patients to drop all study drugs occurred in 6.9 percent of patients in the 12-week telaprevir arm, 7.7 percent of patients in the eight-week telaprevir arm and 3.6 percent of patients in the control arm. The most common side effects were fatigue, rash, pruritus, nausea, headache and anemia, and Vertex reported that most cases were mild to moderate.

Some analysts had been concerned about rashes, particularly after rumors surfaced of patients being hospitalized with severe rashes. Vertex said one patient did develop Steven Johnson syndrome, a potentially life-threatening rash, but the patient recovered completely after hospitalization and the experts agreed that telaprevir was not to blame.

Overall, the incidence of rash was about 50 percent for telaprevir patients vs. 30 percent for controls, but discontinuation rates due to rash were low: 1.4 percent for the 12-week telaprevir group and 0.5 percent for the eight-week telaprevir group compared to none for the control group.

Viral relapse rates were 8.6 percent for the 12-week telaprevir group and 9.5 percent for the eight-week telaprevir group compared to 28 percent for the control group. Those data "suggest we evaluated the right dosing regimens," Kauffman said.

All of which sets a high bar for competing protease inhibitors, including Merck and Co. Inc.'s boceprevir, which is also expected to deliver Phase III data soon.

Leerink Swann Research analyst Seamus Fernandez noted that although boceprevir did achieve a 75 percent SVR rate in one of its Phase II dosing regimens, he doubts the drug will be able to show superiority to telaprevir. Additionally, analysts estimated that just over half of the patients in Vertex's telaprevir trial achieved SVR after a 24-week drug regimen, while they expect boceprevir, like the current standard of care, to be part of a 48-week regimen.

"While we believe boceprevir can capture 10 percent to 20 percent market share assuming comparable efficacy, telaprevir's seemingly manageable . . . safety profile suggests that boceprevir will have a tough time delivering a better outcome that would drive upgrades to our peak sales forecast of $500 million," Fernandez wrote in a research note.

Meanwhile, Cowen and Co. analyst Phil Nadeau is modeling peak telaprevir sales of about $3 billion in the U.S. and another $1 billion or so overseas. Yet he noted that the forecast assumes Vertex will be able to expand the current HCV market.

An estimated 75 percent of the 3.9 million Americans with HCV don't know they have it. Kauffman explained that's partially because of a lack of screening and partially because patients may not see much incentive to get diagnosed and treated if the existing drugs have harsh side effects and less than a 50 percent chance of curing them anyway.

A drug that offers a better chance of cure, potentially in a shorter period of time, could motivate more patients to get treated. Additionally, Vertex used four-week rapid viral response rates in the trial to predict if patients could get by with the 24-week treatment regimen or if they needed the full 48 weeks.

Vertex Chief Commercial Officer Nancy Wysenski said that having a better understanding of how well you'll respond to treatment after just one month could further drive patients to explore diagnosis and treatment.

Vertex's randomized, double-blind, placebo-controlled Phase III trial, dubbed ADVANCE, enrolled 1,095 treatment-naive patients with genotype 1 HCV.

Two additional Phase III trials are expected to deliver data in the third quarter. ILLUMINATE is a treatment-naïve trial exploring whether rapid viral responders would benefit from 48 weeks rather than 24 weeks of treatment. REALIZE involves treatment-experienced patients who have failed or not responded to the standard of care.

Cambridge, Mass.-based Vertex expects to file a new drug application for telaprevir in both treatment-naïve and treatment-experienced patients by the end of the year.