May 23, 2011 / 2:27 PM / 8 years ago

Vertex hepatitis C drug OK'd, promising more cures

NEW YORK (Reuters) - Vertex Pharmaceuticals Inc’s highly anticipated hepatitis C drug won U.S. approval, promising far higher cure rates for the liver-destroying disease and setting up a head-to-head marketing battle with a rival new medicine from Merck & Co.

Incivek, a pill also known as telaprevir, is poised to help transform treatment of hepatitis C by nearly doubling the chances of curing the serious liver disease compared with current standard treatments. Some industry analysts project Incivek sales will top $5 billion a year.

Vertex set a wholesale price of $49,200 for a 12-week regimen of Incivek, which works in combination with current standard drugs pegylated interferon and ribavirin. The older treatments are then continued for as few as another 12 weeks.

Merck’s recently approved Victrelis has a wholesale price of $1,100 per week, or between $26,400 and $48,400 for a course of treatment, depending on needed duration.

Vertex said it was initiating a co-pay assistance program that would reimburse the out-of-pocket costs for the majority of patients covered by commercial health insurance, which accounts for about 60 percent of its expected patient mix.

The approval, which the Food and Drug Administration announced on Monday, was widely expected after an advisory panel unanimously recommended the drug last month.

Vertex said it anticipated approval late this year for Europe, where Johnson & Johnson holds the marketing rights.

Vertex said Incivek, its first commercial product, would arrive in pharmacies this week. The company expects to become profitable next year.

Chief Executive Officer Matthew Emmens said the Incivek approval was the culmination of a $4 billion investment for developing the drug from the beginning in its own labs.

Joshua Boger, Vertex founder and former CEO who pinned the company’s fortunes on telaprevir long before the drug had proved itself in clinical trials, said it was “a great day for patients that we at Vertex envisioned almost 18 years ago.”

In clinical studies, as many as 79 percent of patients taking Incivek experienced a sustained virologic response — which is tantamount to a cure. Older drugs cure only about 40 percent of patients.


Doctors say thousands of hepatitis C patients have been delaying treatment in anticipation of the new medicines because the older drugs had to be taken for 48 weeks, often caused flu-like symptoms and offered a disappointing cure rate.

Incivek offers the potential of cutting the treatment duration to 24 weeks for many patients, while Victrelis can cut treatment down to 28 weeks for some.

About 170 million people around the world are infected with hepatitis C, some 3.2 million of them in the United States. The blood-borne disease can lead to liver cancer, cirrhosis, liver transplants and death.

On May 13, the FDA approved Victrelis, which works the same way as Incivek and is also taken with the older medicines.

Analysts expect Incivek to eventually control more of the market because it has shown a higher cure rate. Victrelis had a 66 percent cure rate in late-stage studies, although the new drugs have not been tested against each other.

“There are now two important new treatment options for hepatitis C that offer a greater chance at a cure,” said Edward Cox, director of the FDA drug center’s office of antimicrobial products.

The most commonly reported side effects with Incivek include rashes and anemia, the FDA said. The rash can be serious and can require stopping Incivek or all three drugs in the treatment regimen.

The Incivek label says only 4 percent of patients reported a severe rash, Sanford Bernstein analyst Geoffrey Porges said.

“We do not see this as a significant limitation to adoption,” Porges said.

Some analysts have projected market share splits of 70-30 or higher in favor of Vertex, including Jason Kantor of RBC Capital Markets.

“At the end of the day Vertex has the better drug profile, simpler drug to use and I still expect Vertex to get the lion’s share of the market,” Kantor said.

Last week Merck struck a deal with Roche Holding AG, which will co-promote Victrelis in the United States. Roche and Merck dominate the market for interferons.

“There’s certainly some pricing strategies around interferons that Merck and Roche may be able to use,” Brean Murray, Carret & Co analyst Brian Skorney said.

Vertex shares closed up 81 cents, or 1.5 percent at $55.81 on Nasdaq, while Merck shares fell 16 cents to $36.90 on the New York Stock Exchange.

Additional reporting by Toni Clarke in Boston; editing by John Wallace, Maureen Bavdek and Lisa Von Ahn

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