Vertex hepatitis C drug wins approval

Vertex Pharmaceuticals Inc’s highly anticipated hepatitis C drug won U.S. approval, heralding a new era of treatment for the liver-destroying condition and setting up a head-to-head marketing battle with a rival 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. 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 vast majority of patients covered by commercial health insurance, or 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 in its own labs. He added that Vertex could seek approval of its second product, a cystic fibrosis treatment, by the end of the year.

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.

INCIVEK VS VICTRELIS

Doctors say tens of 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.

Both of the new medicines offer the potential of cutting the current treatment duration in half for many patients.

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, but has not been tested against Incivek.

“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.

The company said only 1 percent of patients in its studies discontinued treatment due to rash.

Brean Murray, Carret & Co analyst Brian Skorney said he expected the two new drugs to split the market fairly evenly at first, with Incivek gaining a bigger share over the next six to 12 months.

Some analysts have projected market share splits of 70-30 or higher in favor of Vertex.

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,” Skorney said.

Vertex shares were up 0.4 percent at $55.20 in afternoon Nasdaq trading, while the Standard & Poor’s 500 stock index was down 1.4 percent.

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

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By Lewis Krauskopf and Bill Berkrot