Pharmasset jumps on promising hepatitis C trial data

Jan 8 (Reuters) - Shares of Pharmasset Inc (VRUS.O) rose 38 percent on Tuesday, a day after the pharmaceutical company said preliminary results from an early stage trial of its hepatitis C treatment showed promise.

Tuesday's jump marks the second straight day the stock has risen significantly. On Monday, it had closed up more than 44 percent.

Pharmasset said on Monday its treatment, R7128, showed strong short-term antiviral activity and was generally safe and well-tolerated in 50 patients chronically infected with hepatitis C virus.

R7128 is a chemically modified form of a drug called PSI-6130. It is designed to enhance the absorption, distribution and metabolic properties of PSI-6130, which inhibits the hepatitis C virus from replicating.

In the trial, R7128 was given along with Pegasys and Copegus, the current standard of care for hepatitis C made by Swiss drug company Roche (ROG.VX). Pharmasset is developing R7128 in collaboration with Roche.

Stifel, Nicolaus & Co analyst Edward Nash said R7128's clean safety profile is a significant benefit over R1626, another polymerase inhibitor being developed by Roche and U.S.-based drug company Intermune (ITMN.O).

However, Nash cut his rating on the stock to "hold" from "buy," citing the need to see additional corroborating data.

"These (Monday's) data support our view that R7128 has the potential to become a best in class polymerase inhibitor, however, we believe that the stock has gotten ahead of itself on Phase I data," Nash wrote in a note to clients.

Shares of Princeton, New Jersey-based Pharmasset were up $7.70 at $27.94 in morning trade, making them the top gainer on the Nasdaq. The stock had touched a new year-high of $33.904 earlier.

Pharmasset said the final safety and antiviral activity data for this treatment may be available in the second calendar quarter of 2008.

(Reporting by Varsha Tickoo in Bangalore; Editing by Deepak Kannan)

((varsha.tickoo@reuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: varsha.tickoo.reuters.com@reuters.net)) Keywords: PHARMASSET/SHARES

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