Gastrointestinal side effects have prompted Idenix Pharmaceuticals Inc. to reduce its dosing levels of NM283 (valopicitabine) for hepatitis C virus patients in its Phase IIb trials, leaving some investors discouraged about the drug’s prospects.

The company’s stock (NASDAQ:IDIX) plunged 28.3 percent, or $5.73 Friday, to close at $14.52.

NM283 has long been considered the primary value driver for the Cambridge, Mass.-based company.

"It has been the lead program in the field of HCV drug development," said Andrew McDonald, an analyst with ThinkEquity Partners LLC in San Francisco. The setback will delay the start of Phase III trials for NM283, and an eventual market introduction, by six months.

"This is a very competitive space where first-to-market is important," McDonald told BioWorld Today. "I think beyond the delay there are some real questions as to whether or not this drug will even make it to market."

Idenix is reducing the dose for NM283 from 800 mg per day to 200 mg per day or 400 mg per day in both its trials in treatment-na ve and treatment-refractory patients. The change is the result of dose-related GI side effects in which nausea and vomiting of some patients persisted beyond the initial week of treatment. As a result of those side effects, about 16 percent, or 28, of the treatment-na ve patients and 5 percent, or nine, of the treatment-refractory patients have dropped out of the trials.

The biggest question left unanswered is whether the lower doses can provide a high enough efficacy rate to pursue further development. Phase Ib monotherapy data indicated that the lower doses provide about half the antiviral efficacy found in the 800-mg dose, McDonald said. But that might be enough for NM283 to reach the market. The current standard of care is pegylated interferon plus ribavirin.

"The antiviral effects of ribavirin are very poorly understood," McDonald said. "Even with a weak direct antiviral like NM283, it could still displace ribavirin in the treatment paradigm. So it’s a pretty low bar right now to get on the market."

Yet a previous Phase IIb trial of NM283 for 24 weeks showed the 400-mg dose didn’t perform any better than ribavirin. Idenix’s management said in a conference call that data to be presented at the upcoming EASL (European Association for the Study of the Liver) meeting indicate that the lower doses of NM283 offer comparable activity to the higher doses when used with pegylated interferon.

But analyst Joshua Schimmer of New York-based SG Cowen & Co. is doubtful.

"We are skeptical," he wrote in a research note, "of these conclusions based on low patient numbers and previous data which have suggested a clear dose-response."

Kenilworth, N.J.-based Schering-Plough Corp. and Cambridge, Mass.-based Vertex Pharmaceuticals Inc. each have protease inhibitors for HCV that likely will reach the market before NM283. Both Schering’s SCH7 and Vertex’s VX-950 have shown superiority over NM283 and are "phenomenal, but still investigational," McDonald said.

Analysts believe that Novartis Pharma AG, of Basel, Switzerland, which owns 56 percent of Idenix, has not lost faith in NM283, and is likely to opt-in for development rights by the March 29 deadline. If Novartis does opt in, it would trigger up to $70 million through an up-front fee and potential milestones.

But why would Novartis do that, considering this latest change of events?

"For one, Novartis and Idenix have discussed these Phase II results with the FDA, and the outcome is to continue evaluating the compound, albeit at a lower dose, vs. terminating the program altogether," McDonald said. "So that being said, it appears as if both parties believe there is a future for this compound."

In addition, Novartis is well-known for standing by its partners, and it has a "near endless supply of cash," McDonald said, not to mention that its ownership interest in Idenix makes the deal seem like Novartis is paying Novartis.

The deal between Idenix and Novartis was signed in May 2003 and also includes a hepatitis B candidate, telbivudine, for which the companies filed a new drug application in January. (See BioWorld Today, March 27, 2003, and Jan. 4, 2006.)

Idenix’s chairman and CEO Jean-Pierre Sommadossi said he remains "cautiously optimistic" that Novartis will choose to take NM283 through Phase III development and onto the market. "Although we cannot predict what Novartis will do," he said in a conference call, "we do not anticipate any renegotiation."

At best, NM283 could begin Phase III trials at the end of this year instead of in the second quarter as originally planned. A market introduction could occur in the second quarter of 2010, McDonald said, with first year sales reaching $86 million.

The Phase IIb trial in 175 treatment-na ve patients included five randomized arms in which the 800-mg dose was used in four of them, and the 200-mg dose was used in one. All patients were dosed once daily in combination with pegylated interferon alfa-2a (Pegasys) 180 ug per week. Under the new plan, patients in the four 800-mg arms who have serum HCV RNA levels below 600 IU/mL and are tolerating treatment will be randomized to continue treatment with one of the lower doses.

Results in all study arms through week eight indicate marked suppression of serum HCV RNA and viral clearance in a significant percentage of patients. Idenix’s chief medical officer Nathaniel Brown said he is "encouraged by antiviral activity seen to date" in the clinical trials, including results seen in the lowest 200-mg dose group.

The Phase IIb trial in 178 treatment-refractory patients involved three dosing regimens of NM283 at 400 mg and 800 mg once daily in combination with Pegasys and was compared to retreatment with pegylated interferon plus ribavirin. Patients who have serum HCV RNA levels below 1,000 IU/mL and are tolerating treatment will continue therapy on the lower doses.

About 4 million Americans have been infected with HCV, and 2.7 million carry chronic infections, according to the Centers for Disease Control and Prevention in Atlanta.