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by Atlas BioResearch



Protease inhibitors are part of the current armamentarium against HIV, the AIDS virus. They are used in combination with other drugs of different mechanisms to combat the disease. They, along with reverse transcriptase inhibitors and other mechanism based drugs, have been successful in offering those infected with the virus a good chance of continued life, although not without cost as they do have side effects. They are also not immune from resistance, which plagues monotherapies. Protease inhibitors are also being developed for HCV (Hepatitis C), another viral disease. The marketed treatment for this disease is a combination of Interferon and Ribavirin.

One of the indicators of success in any therapy for HCV is the sustained viral repose (SVR) or the ability of the medication to reduce the viral load to undetectable levels for a sustained period of time. It is used as a marker of success and levels are set as goals for clinical trials.

The two most advanced clinical candidates are a protease inhibitor from Vertex (VRTX) and one from Schering-Plough (SGP). In 2006, interim results were announced from a Phase IIb trial for the VRTX product which indicated slightly lower SVR and slightly higher levels of patient drop out due to toxicity than was expected. However, the results appear to be acceptable and the company plans to initiate a Phase III program later in 2007.

Results from the Schering-Plough program, which is currently in Phase II, will be available in 2008 and the Company intends to initiate a Phase III program thereafter. The Phase III program will be for a longer dosing duration than for the Vertex compound. Although the Schering-Plough product will launch later than VRTX’s product, it will be a competitor. Neither appears to be clearly the winner at this point and this needs to be considered when assessing the economic potential of the Vertex product. However, there is great hope on the part of the VRTX and the investing community for telaprevir the Vertex compound. The stock rose in the latter part of 2006 on the basis of hopes for this product only to fall after results were announced which appeared not as robust as expected.

The eventual landscape, assuming success of these approaches to HCV, will, we believe, be broadly similar to HIV; a number of different mechanistic approaches to stopping viral replication in combination, to avoid, as far as possible, viral resistance; the eventual appearance of resistance requiring greater dosing with resulting higher toxicities; continuing use of in combination of peg-interferon and Ribavirin with their totally different approach; and economics not nearly as attractive as expected.

The currently marketed protease inhibitor for HIV, developed by Vertex, is now marketed by GlaxoSmithKline (GSK) and had combined worldwide revenues of under $300 million in 2005, way short of the billion dollars originally predicted. Individual drugs for HCV could, similarly, see more modest revenues than expected. The valuation of the Vertex HCV inhibitors should also be discounted by the risks associated with, Phase III development, regulatory approval and possible delay in market launch.

With all these points to consider it is unclear why VRTX was at such high stock levels in late November 2006, almost $45. The stock is now way off its high, trading on Friday March 2 at just under $30. If it continues to fall investors should consider buying when it reaches the mid $20s.


Source: AtlasBioResearch.com



RELATED READING:
- Vertex Hepititis C Candidate May Be a Success Story
- Vertex Jumps On Hepatitis C Trials
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