UPDATE 3-U.S. FDA panel backs Merck hepatitis drug

Wed Apr 27, 2011 6:43pm EDT

* Advisers vote 18-0 to recommend boceprevir's approval

* FDA to make final decision as early as May

* Rival Vertex drug faces panel on Thursday

* Merck shares up 1.6 pct, Vertex gains 5 pct (Adds panel member, analyst comments)

By Lisa Richwine

SILVER SPRING, Md., April 27 (Reuters) - A Merck & Co (MRK.N) hepatitis C drug moved closer to the market on Wednesday as U.S. advisers unanimously urged approval and called it a major advance against a hard-to-treat disease.

The Merck drug and a rival from Vertex Pharmaceuticals Inc (VRTX.O) are expected to change the treatment of a virus that can destroy the liver. Analysts project blockbuster sales for each of the new pills, with the Vertex drug dominating a multibillion-dollar market. About 170 million people around the world are infected with hepatitis C.

A Food and Drug Administration advisory panel voted 18-0 to urge approval of Merck's drug, boceprevir. The FDA usually clears medicines that win panel support.

"This is a tremendous advance and is going to give a lot of people hope," said Dr. Robert Knodell, a panelist and gastroenterologist at the Veterans Administration Medical Center in Baltimore.

The advisory panel will consider the Vertex drug, telaprevir, on Thursday.

Merck shares rose 1.6 percent to close at $35.63 on the New York Stock Exchange. Vertex shares gained nearly 5 percent to close at $55.54 on Nasdaq.

Industry analysts expect both drugs to win approval as early as May. The Vertex pill is projected to draw more patients after showing a higher cure rate in clinical trials.

Jon LeCroy, an analyst with Hapoalim Securities, said boceprevir had been unfairly overshadowed by the Vertex medicine. "If both drugs get approved, both will be decent sellers," he said.

TWO BIG SELLERS

Doctors say tens of thousands of patients have been delaying treatment in anticipation of the new medicines, which still must be taken in combination with older hepatitis drugs. The new medicines work by blocking a protein called protease that the virus needs to replicate.

In the United States, 3.2 million people have hepatitis C, a blood-borne disease that can lead to chronic liver problems, liver cancer, cirrhosis and death. The infection is spread mainly through sharing needles such as those used for illegal drugs and tattoos, or through blood transfusions before 1992 when screening began. Many people who are infected do not know they have the virus and show no symptoms.

Morningstar analyst Damien Conover predicted a 60-40 sales split in favor of the Vertex drug, a more bullish view for boceprevir than the 70-30 split others have predicted.

Merck's large sales force and its entrenchment in the space because of its pegylated interferon drug for hepatitis will help boceprevir, Conover said. Merck acquired boceprevir and the interferon drug, which must be used in combination with the new antivirals, with its 2009 purchase of Schering-Plough.

Conover sees boceprevir sales quickly hitting $600 million in 2012 and climbing to $1 billion by 2014, with more room to grow. The proposed brand name is Victrelis.

Boceprevir's cure rate reached 66 percent in Merck's studies, an improvement over the 40 percent seen with current drugs, but less than the 79 percent reported for newly treated patients given the Vertex drug, telaprevir.

Both the Merck and Vertex medicines cured some patients in half the time of the current combination therapy of the injectable drug interferon and a pill called ribavirin. The older drugs require almost a year of treatment and often cause flu-like symptoms that are tough to tolerate.

Members of the FDA panel appeared to support shorter treatment for patients who show early responses to boceprevir, Dr. Jeffrey Murray, deputy director of the FDA's antiviral drugs division, told reporters.

Boceprevir's main risk is blood disorders such as anemia, a lack of red blood cells that causes fatigue and other symptoms, FDA reviewers said. Panelists said the problems needed monitoring but were manageable and usually not severe.

The committee was split on whether boceprevir should be given to patients who failed to respond to earlier treatment.

Some voiced concern that patients would find it challenging to stick with the three-times-a-day dosing for boceprevir on top of the two older medicines.

"When it gets too complicated we are shooting ourselves in the foot," said Dr. Lawrence Friedman, medicine department chair at Newton-Wellesley Hospital in Newton, Massachusetts. (Reporting by Lisa Richwine in Silver Spring, Maryland, and Bill Berkrot in New York; Editing by Maureen Bavdek, Carol Bishopric, Phil Berlowitz)

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