West Coast Editor

The start of Pharmasset Inc.'s Phase III trial with its once-daily pyrimidine nucleoside analogue, clevudine, puts $1 million in the bank as a milestone payment from the firm's Korean partner, and could mean a share of the market in hepatitis B, for which the compound (sold as Levovir capsules) already is cleared in South Korea.

Pharmasset's stock (NASDAQ:VRUS) closed Monday at $12.25, up 9 cents.

Studies in the Phase III program will be conducted in 856 nucleoside treatment-naïve patients at about 140 sites to support registration in the Americas and Europe, where Pharmasset licensed rights to clevudine from Bukwang Pharm Co. Ltd., of Seoul, South Korea.

Schaefer Price, president and CEO of Princeton, N.J.-based Pharmasset, said the firm aims to report results in about two years. "We're hopeful [enrollment] could be nine months, then a year on the drug, and a month or two thereafter until we have all our data together," he said.

Two 48-week trials are designed to show the superiority of clevudine 30 mg over Hepsera (adefovir dipivoxil, Gilead Sciences Inc.) 10 mg, each administered once daily as monotherapy. Study 305 will enroll about 376 chronic HBV e-antigen positive patients (HBeAg+), and Study 306 will sign up about 480 chronic HBV e-antigen negative patients (HBeAg-).

Pharmasset plans to use the 48-week data to seek approval by the FDA, though the studies will keep going to week 96 for more data, while measuring sustained virologic response (SVR, defined as undetectable virus 24 weeks after stopping therapy, where clevudine proved strong in Bukwang's studies). SVR has been the endpoint of choice in drugs for hepatitis C virus.

"Unlike all the other hepatitis B drugs, you can actually stop and look for that durable potency," he said.

At week 72, the HBeAg- patients in Study 306 treated with clevudine who show suppressed HBV DNA as well as normalized levels of alanine aminotransferase (ALT, high levels of which typically go with HBV) will be randomized to continue with clevudine or placebo.

The HBeAg+ patients in Study 305 who have been treated with either clevudine or Hepsera and undergo eAg seroconversion (loss of eAg with suppressed HBV DNA plus normalized ALT) will stop therapy at week 72, and their SVR will be assessed for clevudine and Hepsera 24 weeks after stopping treatment, at week 96.

Foster City, Calif.-based Gilead reported second-quarter sales of Hepsera reached $75.2 million, up 32 percent from a year ago, and the product sold $231 million worldwide in 2006. A competitor in the space is New York-based Bristol-Myers Squibb Co.'s Baraclude (entecavir), approved in March 2005, which sold $83 million last year.

Pharmasset also has R7128 for HCV. Positive Phase I results last month prompted the company and partner F. Hoffmann-La Roche Ltd., of Basel, Switzerland, to plan a 28-day study of R7128 with Pegasys and ribavirin in treatment-naive patients later this month.

R7128 is a prodrug of PSI- 6130, an oral cytidine nucleoside analogue HVC polymerase inhibitor.

"We've just seen an abstract coming out from Roche on their [nucleoside] molecule," in development outside of the Pharmasset deal, Price said. The drug, which has reached the Phase IIb stage, showed good results when used with pegylated interferon and ribavirin, the standard of care. "We're looking to see a similar kind of synergy with our nucleoside," he said.

Pharmasset has another HCV nucleoside apart from the Roche program as well, and it appears 100-fold more potent than the molecule partnered with the pharma giant, with a "very high genetic barrier to drug resistance," Price said. "We did not see any virological rebounders" after 14 days, he added.

"We haven't yet committed it to GLP toxicity studies [with the second HCV nucleoside]," and whether the firm will seek a partnership before moving the compound into the clinic is undecided, Price said. "That's an excellent strategic question, something I struggle with," he said. "It's a very pleasant thing to be thinking about."

The HCV road is strewn with roadblocks and outright failures, Price acknowledged, but "other problems in the clinic have come from molecules with less history as chemical templates [than nucleosides]. Regulatory agencies know them well; the market knows them well."

Pharmasset's pipeline includes a Phase II HIV therapy as well - Racivir, a cytidine nucleoside analogue for use in combination with other approved HIV compounds.

Results so far show Racivir is "very good at having potency against a drug-resistant mutation" that stymies other HIV drugs, Price said.

"That one we'll be partnering," he said, noting that it's "all about combinations in the marketplace," so Pharmasset will be watching for a potential hookup with a company holding a compatible drug.

"We're always trying to be better than predecessor molecules," he said, hence the bid to prove clevudine is better than Gilead's Hepsera. Pharmasset might even be considered a young Gilead.

"In some cases, we have molecules with advantages, but they've been around for a lot longer than we have," Price said. "We're pushing on a number of fronts. [The pipeline] looks comparable to some big pharma antiviral pipelines, and yet we're only 37 employees." Pharmasset is hiring.

The firm's initial public offering in late April sought $75 million, which would have paid for clevudine all the way to a regulatory submission. "We fell about $30 million short," Price said, and the firm is exploring ways to raise the remainder. (See BioWorld Today, April 30, 2007.)