The Street’s Adam Feuerstein — “A Fast Start” For Vertex’s Telaprevir, Come May 2011

This morning, Mr. Feuerstein offers a nice rundown on the next-gen Hep C candidate race — now rounding the turn, and heading for home. I didn’t reproduce it below, but he relegates legacy Schering-Plough’s (now Merck’s) boceprevir to a bracketed throwaway, as though he was only partially considering letting the sentence run in the final piece. Do take a look at page two of his article.

In any event, he is likely right that Vertex may soon be at least partly a victim of its own success-story — here’s a bit — do go read it all:

. . . .A typical Hep C patient today is treated with interferon and ribavirin for one year, enduring side effects that include flu-like symptoms for a 40% to 50% chance of being cured. By this spring or early summer, the addition of 12 weeks of treatment with Vertex’s telaprevir to a shortened, six-month course of interferon and ribavirin will boost cure rates to 75% to 80%. Telaprevir+interferon+ribavirin will be the new standard of care for Hep C. . . .

[However,] Vertex emerged from EASL under more pressure to make the most of telaprevir commercially before competition arrives on the scene. Telaprevir is a major advance in Hep C treatment and the drug should pass easily through an April 28 FDA advisory panel and receive agency approval on or before May 23. As effective as the drug is for treatment-naive Hep C patients, the drug will have an even more beneficial effect for the hundreds of thousands of patients with Hep C virus that wasn’t cured by the current standard of care. . . .

Vertex’s dilemma is that investors know this story well and have baked much of telaprevir’s potential into the company’s valuation already. What concerns investors today and perhaps even more post-EASL is that the slope of the expected telaprevir revenue tail may be steeper than previously appreciated. Investors are also raising questions about what Vertex is doing to sustain its Hep C franchise in 2015 and beyond when new drugs are expected to enter the market. . . .

It is possible that Telaprevir’s FDA approcal could arrive in mid to late May — do stay tuned. As for J&J, here is a big chunk of its next-next generation strategy — at 2016 and beyond. . . .


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