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Biotech and Pharma Focus on Hepatitis C


At an international conference on the liver, Merck and others highlight their HCV treatments.

While hepatitis C is certainly a disease that you would want to avoid, biotech and Big Pharma have both caught the bug. A slew of data on hepatitis C drugs has been trickling out of Vienna, Austria, this week as the European Association for the Study of the Liver holds its annual Liver Congress. The conference began on Wednesday and wraps up on Sunday, but investors already have plenty to consider.

Merck (MRK) is trying to make itself a major player in the hepatitis market. The Big Pharma inherited Schering Plough's boceprevir, which is in late-stage trials and is expected to face review by the FDA before the end of the year. The company also markets the combined treatment regimen of Pegintron and Rebetol. Merck has vaniprevir in mid-stage development and MK-5172 in early development.

"Today, with our combined portfolio, the new Merck is committed to continuing this legacy and to being a leader in the development of vaccines and pharmaceuticals to both prevent and treat viral hepatitis," said Patrick Bergstedt, senior vice president and general manager, Merck Infectious Diseases.

Hepatitis C, or HCV, is a disease that leads to swelling of the liver. The disease is asymptomatic and most people don't know that they have it until severe liver damage is discovered. It's the leading cause of liver cancer, cirrhosis, and the main reason that people in the US need a liver transplant. According to the CDC, 3.2 million Americans are living with chronic hepatitis C and another 1.2 million Americas have chronic hepatitis B.

Investors are keeping a close eye on Idenix Pharmaceuticals (IDIX), which has added more than 7% to its share price since announcing interim trial data for its HCV drug IDX-184 this morning. Patients on the 100 mg dose of '184 showed antiviral activity after 14 days of treatment. The company is testing several different doses of the drug for safety and efficacy.

"The data are consistent with our thesis that nucleoside-based agents tend to demonstrate good data in combination with peginterferon and ribavirin and, in our view, should help to address concerns about the efficacy of the compound," wrote Leerink Swann analyst Howard Liang concerning '184. "Despite the recent run in the stock ahead of EASL, we believe there is further upside in the stock and our 12-month valuation is $6."

The company is hoping to gain a partnership on the drug sometime during 2010, once phase II data begin to come out.

Anadys Pharamceuticals (ANDS) has been attracting attention with the results of its phase II study of the HCV drug ANA598. The company says that 72% of patients taking the 400 mg dose twice daily plus the standard of care showed undetectable levels of the virus at eight weeks, compared to 38% of people taking a placebo.

While these are some of the more minor players at the conference, investors are looking at Pharmasset (VRUS), Gilead (GILD), InterMune (ITMN), and Vertex Pharmaceuticals (VRTX) -- some of the more prominent companies in the more than $2 billion market.

Vertex announced results of early stage trials of VX-222, which showed tolerability with all adverse reactions being only mild to moderate in severity after three days of treatment. The company is expected to complete enrollment of a phase II trial by the end of the second quarter.

On Wednesday InterMune announced midstage data on its HCV treatment danoprevir, also known as ITMN-191. The drug is partnered with Roche. The company called the results "among the very best reported by any DAA compound to date," and expects that danoprevir will "play a meaningful role in the treatment of HCV patients."

"The key for '191 is safety, and that remains unresolved," wrote Robert W. Baird analyst Tom Russo. "The safety data disclosed essentially confirms what we already knew about the 900 mg dose cohort. Full details for this trial will be presented at an upcoming major medical meeting."
No positions in stocks mentioned.

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