BioWorld Today Contributing Writer

For those to whom much is given, much is expected. So it is with Vertex Pharmaceutical Inc. as several analysts upped their sales estimates for just-launched hepatitis C treatment Incivek (telaprevir) after the company reported second quarter sales of about $75 million – more than doubling previous Street estimates and more than tripling second quarter sales of $21 million for Merck & Co. Inc.'s competing Victrelis (boceprevir).

Cambridge, Mass.-based Vertex said it ended the quarter with about $593 million cash and expects to begin reporting positive earnings in 2012. The company reported a non-GAAP second quarter loss of $136.4 million, or 67 cents per share, compared to $142.5 million, or 71 cents per share for the same quarter last year. Total revenues for the quarter were $114.4 million compared to $31.6 million in for the second quarter of 2010, an increase driven by Incivek sales since its approval by the FDA on May 23.

Vertex execs said they also were buoyed by completion in the second quarter of a Phase III trial of VX-770, the company's cystic fibrosis transmembrane conductance regulator protein, and said that they plan to submit new drug and marketing authorization applications in October for treatment of people with the G551D mutation. Vertex said it also is preparing several other cystic fibrosis studies, two later this year, which will evaluate combinations of the company's investigational medicines and three VX-770 studies expected to begin in the first half of 2012.

Shares (NASDAQ:VRTX) were up $3.88, to close at $51.86 Friday.

During a conference call following the release of the second quarter results, Vertex CEO Matt Emmens called the Incivek approval and launch and completion of the VX-770 Phase III program "defining events" that have established a foundation for the company's future growth.

Emmens noted that the company was so launch-ready that the first person was able to begin treatment with Incivek just three days after approval. That may account for the jump that Vertex got on competitor Merck, whose Victrelis hepatitis C treatment was approved by the FDA 10 days earlier. (See BioWorld Today, May 17, 2011, and May 24, 2011.)

Wells Fargo Securities analyst Brian Abrahams wrote that Merck reported second quarter Victrelis sales of $21 million, which Merck said "entirely reflected several months of wholesaler inventory stocking." That compared to Vertex's $75 million in ex-factory sales of Incivek, only half of which was inventory stocking, Abrahams said.

While noting that it is difficult to compare sales of Victrelis and Incivek this early, Abrahams said that the bottom line is that "after a strong showing by VRTX's Incivek, MRK's Victrelis appears to be lagging."

Abrahams was one of several analysts who raised sales estimates for Incivek, increasing his second-half 2011 expectations to $668 million adding, "the Street will likely considerably increase Incivek sales estimates for the back half of the year."

Calling the Incivek results "a huge beat" of consensus estimates in the $30 million to $31 million range, Canaccord Genuity analyst George Farmer increased 2011 sales estimates from $601 million to $734 million. Phil Nadeau of Cowen and Co. wrote that, based on prescription trends, Street estimates of third quarter Incivek sales of $176 million and 2011 sales of $545 million "would appear to be quite low." He raised his third quarter estimate from $150 million up to $250 million and his 2011 estimate from $600 million to $675 million.

Piper Jaffray & Co. analyst Edward Tenthoff stayed his earlier course, continuing to forecast a strong U.S. product launch with sales of $189 million in the third quarter, $356 million in the fourth quarter and a total of $619 million for 2011.

While not estimating sales, Leerink Swann's Howard Liang wrote that Incivek's "excellent start . . . positions this as a biotech launch to watch. While it is still the early days, the current script trends coupled with the initial actual reported sales seem to suggest that Incivek launch has the potential to well exceed expectations and position it as one of the highly successful biotech product launches." Liang said.

Vertex partner Tibotec Virco-Virology BVBA, of Beerse, Belgium, part of Johnson & Johnson's Janssen Pharmaceutical unit, announced last week that the European Committee for Medicinal Products for Human Use recommended approval of telaprevir in combination with pegylated interferon and ribavirin in chronic genotype-1 hepatitis C virus. Vertex said it expects Tibotec will receive a response from the European Commission on its application for approval in the third quarter and following approval, telaprevir will be marketed in the European Union under the brand name Incivot by the Janssen companies.