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Abbott Laboratories Rises to Record High on Hepatitis Drug Study

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A company study shows more than 90% cure rates with an experimental pill, solidifying Abbott's place in a crowded field of drug developers.

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Abbott Laboratories (ABT) is making a case that it's a serious contender to develop a better drug to treat the liver-destroying virus hepatitis C.

In a pair of small studies, Abbott showed that its experimental pills taken with other drugs can cure more than 90% of patients with the virus. In one trial closely watched by investors, dubbed Co-Pilot, two groups of patients showed 95% and 93% cure rates when given the Abbott drugs. Abbott said the study also showed a 47% cure rate for another group of people who couldn't be treated by medicines already approved for sale.

"The Abbott data is clearly impressive from an efficacy standpoint," ISI Group analyst Mark Schoenebaum says. But he notes that more data is needed to get a clear impression of the treatment.

Abbott is in the second of three phases of study usually needed to win US approval for drugs. The study results will be presented at a major medical conference focused on liver diseases, held in Spain later this month.

The news was good for Abbott and the company's shares rose 1% to $61.54 in midday trading. (The stock was above $62 in morning trading.)

Abbott is in a race with a crowd of rivals, including Bristol-Myers Squibb (BMY), Gilead Sciences (GILD), Merck (MRK), Vertex Pharmaceuticals (VRTX), Indenix Pharmaceuticals (IDIX), and Roche (RHHBY.PK).

Shares of some of those companies dropped today. Gilead fell 2% to $47.26 in midday trading, while Vertex dropped 1%, and Bristol-Myers slid less than 1%. Idenix fell 12% to $9.

The goal for the next generation of hepatitis C drugs is to develop an all-oral drug regimen that doesn't require an injection of the drug interferon, which can cause nasty side effects.

Demand for hepatitis treatments is expected to rise as many people infected years ago may have the virus and not realize it. As many as 170 million people worldwide have chronic infections and more than 350,000 people die from the virus each year, according to estimates by the World Health Organization. More than 3 million people in the US have chronic infections, according to the Centers for Disease Control and Prevention.

The payoff for the company that successfully brings a new treatment to the market is potentially billions of dollars. Some of Abbott's competitors spent big bucks to try to get ahead in the race. Most recently, Bristol-Myers acquired drug developer Inhibitex following Gilead's whopper $11 billion deal for Pharmasset. (See Bristol-Myers Enters Hepatitis Drug Race with $2.5 billion takeover of Inhibitex)

Abbott is actually in the midst of spinning off its drug business into a new company that will be called AbbVie. The process is supposed to be complete by the end of the year.

More study data from Gilead and Bristol-Myers will be coming out of the conference in Spain, which begins April 18.

Twitter: @brettchase

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