August 4, 2008 / 1:57 PM / 11 years ago

Schering-Plough drug results pressure Vertex stock

BOSTON (Reuters) - Schering-Plough Corp SGP.N said on Monday that results from a study of its experimental hepatitis C drug showed promising results, sending the shares of rival Vertex Pharmaceuticals Inc (VRTX.O) down nearly 11 percent.

Schering’s drug, boceprevir, is the closest competitor to Vertex’s experimental hepatitis C drug telaprevir and, although

Vertex is further ahead in development, investors are closely watching the competitive landscape.

Analysts said data from the mid-stage boceprevir trial was better than expected in patients who have not received previous treatment and a reminder that Vertex, while still in the lead, has rivals nipping at its heels.

Schering-Plough’s shares rose nearly 3 percent to $20 in afternoon trading.

The company said interim analysis of a mid-stage trial showed that at 48 weeks, 74 percent of patients receiving boceprevir in combination with standard treatment had undetectable levels of the hepatitis C virus in their blood for a sustained period of time, compared with 38 percent of patients receiving standard treatment alone.

The results were achieved by first giving patients a four- week “lead-in” time where they received the standard current treatment alone.

The company also tested a group of patients who did not receive “lead-in” treatment. In those patients, 66 percent saw the virus eliminated from the blood-stream.

Analysts said the results were solid, but most held to their view that Vertex’s drug holds the commercial advantage since telaprevir requires a shorter period of treatment and appears to be more effective in patients who have failed previous therapies.

“Our model assumes telaprevir will face increased competition one to two years after launch,” said Geoffrey Meacham, an analyst at JP Morgan, in a research report. “However, we believe telaprevir’s profile is superior.”

Hepatitis C is a viral infection of the liver. An estimated 170 million people worldwide are chronically infected with the virus, according to the World Health Organization.

Schering-Plough said that in two 28-week groups of the study, 56 percent of patients who received the lead-in treatment had not experienced a return of their virus 24-weeks later, while 55 percent of patients who did not receive the lead-in treatment continued to be virus-free.

Vertex shares fell about 11 percent to $29.01 in afternoon trading, while the shares of Schering-Plough rose some 3 percent to $21.08 on the New York Stock Exchange.

Reporting by Toni Clarke, editing by Dave Zimmerman and Andre Grenon

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