Better-than-expected Phase II data from Schering-Plough Corp.'s oral hepatitis C protease inhibitor sent shares of Vertex Pharmaceuticals Inc., which is developing a potentially competing product, falling 13.2 percent.

Initial data from the ongoing study in treatment-naïve hepatitis C patients showed that Schering's boceprevir in combination with Pegintron (peginterferon alfa-2b) and Rebetol (ribavirin) achieved a high rate of early virologic response, with up to 79 percent of patients having undetectable virus (HCV-RNA) at week 12 compared to 34 percent of patients receiving Pegintron and Rebetol alone.

That compares to interim data presented in April from Vertex's telaprevir (VX-950), in combination with pegylated interferon and ribavirin, which showed that 70 percent of patients had undetectable HCV-RNA at 12 weeks.

Wall Street clearly had a few concerns, especially since telaprevir appeared to have gained an early edge in the HCV protease inhibitor space. Shares of Cambridge, Mass.-based Vertex (NASDAQ:VRTX), trading at more than eight times their normal volume, lost $4.72 Thursday to close at $31.10. A head-to-head preclinical study, reported last year, showed that Vertex's drug demonstrated superior pharmacokinetics to Schering's boceprevir.

But it's early yet. Vertex anticipates releasing further data from its Phase II trial at a scientific conference next month, and Kenilworth, N.J.-based Schering continues its Phase II studies, including the one evaluating boceprevir in treatment-naïve patients, as well as a second trial testing the drug in patients who were nonresponsive to previous peginterferon and ribavirin combination therapy.

Schering also reported top-line results from a completed Phase II study evaluating boceprevir dose response and the need for ribavirin in patients chronically infected with HCV genotype 1 who were nonresponders to previous peginterferon and ribavirin therapy.

Overall, 7 percent to 14 percent of patients in the boceprevir crossover arms (patients who demonstrated a substantial antiviral response at the lower doses of boceprevir and were crossed over to receive boceprevir 800 mg TID in combination with Pegintron and Rebetol for an additional 24 weeks) achieved sustained virologic response compared to 2 percent in the control arm.