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Article on Vertex and Schering
Retail Investors Should Grasp Opportunity In Vertex Pharmaceuticals
posted on: October 23, 2007 | about stocks: VRTX
Vertex Pharmaceuticals' stock (VRTX) dropped about $5 or 14% to $30 on the news release that Schering Plough's (SGP) Protease inhibitor Boceprivir, which had performed poorly in previous trials, showed that about 79% of patients achieved early response. As soon as this news came out (with no trial result detail), an analyst from Cowen and Co. downgraded Vertex due to concerns from competition.
First of all, the size of this market (up to $4 billion annual estimated sales) makes competition less of a factor. Second, being first to market increases the probability of success of any product, but it does not guarantee it. Third, the details of the Schering trial will make us realize that Telaprevir is still arguably the best product with the most clinical data. For example, in the Boceprivir trial, patients were primed with Peg-interferon and ribavirin before the start of triple drug therapy. Also, no long term sustainability of response rates are available beyond the original 12 week data mentioned in the abstract. Finally, the drop out rates due to side effects, the unknown methodology for calculation of percent responders, as well a the higher minimum detection limit of the PCR assay used to determine virus levels make me question the strength of these results.
I still believe Telaprevir is the front runner to hit the market before any other new HCV medications and will capture a good percentage of the world wide market thanks to its partnership with J&J (JNJ).
VRTX stock is a great buy at these levels as I believe a blockbuster product in a multi-billion dollar market should value the company between $6-10 billion market cap once Telaprevir is in Phase III. Days like these, I am glad that the efficient market theory, which is taught at every finance school, is somewhat flawed for smaller companies and individual investors can take advantage of under-priced securities. As retail investors, we should recognize and plan for these events.
I had previously owned stocks and leaps in VRTX. Given this recent movement, I have added some medium term calls 2-6 months, to take advantage of a possible run after the earnings report and the release of more clinical trial results in November. However, given the difference of opinion by analysts and other shareholders who have sold their shares recently, I am holding on to some puts as a hedge.
Bottom Line: Buy VRTX at these levels and hold for a long term for a possible 2-5 times returns in the next few years.
Disclosure: The author owns shares and options in VRTX.
A. Reza Saadat
http://seekingalpha.com/article/50929-retail-investors-should-grasp-opportunity-in-vertex-pharmaceuticals
posted on: October 23, 2007 | about stocks: VRTX
Vertex Pharmaceuticals' stock (VRTX) dropped about $5 or 14% to $30 on the news release that Schering Plough's (SGP) Protease inhibitor Boceprivir, which had performed poorly in previous trials, showed that about 79% of patients achieved early response. As soon as this news came out (with no trial result detail), an analyst from Cowen and Co. downgraded Vertex due to concerns from competition.
First of all, the size of this market (up to $4 billion annual estimated sales) makes competition less of a factor. Second, being first to market increases the probability of success of any product, but it does not guarantee it. Third, the details of the Schering trial will make us realize that Telaprevir is still arguably the best product with the most clinical data. For example, in the Boceprivir trial, patients were primed with Peg-interferon and ribavirin before the start of triple drug therapy. Also, no long term sustainability of response rates are available beyond the original 12 week data mentioned in the abstract. Finally, the drop out rates due to side effects, the unknown methodology for calculation of percent responders, as well a the higher minimum detection limit of the PCR assay used to determine virus levels make me question the strength of these results.
I still believe Telaprevir is the front runner to hit the market before any other new HCV medications and will capture a good percentage of the world wide market thanks to its partnership with J&J (JNJ).
VRTX stock is a great buy at these levels as I believe a blockbuster product in a multi-billion dollar market should value the company between $6-10 billion market cap once Telaprevir is in Phase III. Days like these, I am glad that the efficient market theory, which is taught at every finance school, is somewhat flawed for smaller companies and individual investors can take advantage of under-priced securities. As retail investors, we should recognize and plan for these events.
I had previously owned stocks and leaps in VRTX. Given this recent movement, I have added some medium term calls 2-6 months, to take advantage of a possible run after the earnings report and the release of more clinical trial results in November. However, given the difference of opinion by analysts and other shareholders who have sold their shares recently, I am holding on to some puts as a hedge.
Bottom Line: Buy VRTX at these levels and hold for a long term for a possible 2-5 times returns in the next few years.
Disclosure: The author owns shares and options in VRTX.
A. Reza Saadat
http://seekingalpha.com/article/50929-retail-investors-should-grasp-opportunity-in-vertex-pharmaceuticals
Yes, and the other thing is that I don't think the studies included treatment naives. So maybe it would work better for them? Didn't read Carr completely, but I did double-dose with Peg and my doc said he's had good results. I do hear what you're saying, but let's say you were a geno 1 with significant liver damage (3 or 4) and for whatever reason you decided to treat now with the current drugs. Don't you think double-dosing until UND still might be a reasonable choice for some (among possibly other additives to SOC) at least until maybe more studies are done.
-- Jim
-- Jim
agreed that the results are not straightforward, particularly with respect to genotype, but that's all the more the reason to be suspicious of an-across-the-board "would help my chances around 10%" opinion without investigating what it's based on.
Following up with the full text of Carr'07 and Enomoto'07 is probably a good next step as their discussion will cite a lot of the recent data (can't do that at the moment but will try when I get back; see also study cited at the bottom of that recent non-responder thread).
Two other points: (1) the high-dose stage of induction therapy pretty much has to be non peg, eg see Carr. The only point of the peg add-on to the protein is to delay its degradation, if you're taking the stuff daily that's not an issue. (2) not sure that Carr's comments about a subset of their results (the "Study 2, genotype non-1-previous non-responders" invalidates their main conclusion).
Following up with the full text of Carr'07 and Enomoto'07 is probably a good next step as their discussion will cite a lot of the recent data (can't do that at the moment but will try when I get back; see also study cited at the bottom of that recent non-responder thread).
Two other points: (1) the high-dose stage of induction therapy pretty much has to be non peg, eg see Carr. The only point of the peg add-on to the protein is to delay its degradation, if you're taking the stuff daily that's not an issue. (2) not sure that Carr's comments about a subset of their results (the "Study 2, genotype non-1-previous non-responders" invalidates their main conclusion).
You know, I may not have to take that back :) The abstract is confusing, at least to me. It may be suggesting that ITT (intent to treat) stats are no different, but may suggest that per protocol stats show a significant difference. For those that aren't familiar, "intent to treat" is the group that starts out and "per protocol" is the sub-group that actually takes the meds or most of them. In other words, per protocol does not include drop outs. I think with our particular group, "per protocol" should be closely looked at since we seem to have a high percentage of very motivated treaters.
I may have to take that back, since it talks "response rates" and not SVR. I'll have to get back over to Clinical Care Options at some point and see what studies Jensen was quoting.
The first study appears to be using data from a non-pegalayted interferon.
A very brief look at the second study partly concludes thus:
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1478-3231.2007.01535.x
"...However, by non-ITT analysis of Study 2, genotype non-1-previous non-responders showed significantly higher response rates with induction than non-induction."
-------------------
I don't have time now to go further, but it does appear from the above that induction may be helpful for geno 1's who did not previously respond to treatment. More or less what I believe Dr. Jensen stated over at Clincal Care Options. As to treatment naive's, I was told induction would help my chances around 10% but don't know if this was based on study data or the doctor's anecdotal experience.
A very brief look at the second study partly concludes thus:
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1478-3231.2007.01535.x
"...However, by non-ITT analysis of Study 2, genotype non-1-previous non-responders showed significantly higher response rates with induction than non-induction."
-------------------
I don't have time now to go further, but it does appear from the above that induction may be helpful for geno 1's who did not previously respond to treatment. More or less what I believe Dr. Jensen stated over at Clincal Care Options. As to treatment naive's, I was told induction would help my chances around 10% but don't know if this was based on study data or the doctor's anecdotal experience.
I haven't looked at this in detail, and probably won't have a chance to for a bit, but here are some comments that led to my impression that induction dosing may help with initial response but now with final SVR:
"The induction treatment presented a better initial response, but this was not maintained at the end of treatment, and did not improve the results obtained with the standard treatment." (based on a non-peg study)
from:
Comparative study of the efficacy of an induction dose of interferon-alpha2b with ribavirin compared with standard combined treatment in naive patients with chronic hepatitis C.
J Viral Hepat. 2003 Nov;10(6):437-45.
PMID: 14633177
"RESULTS: Induction did not increase SVR compared with non-induction, but did increase the on-treatment response among genotype non-1 patients in Study 2. "
from
Efficacy of interferon alpha-2b induction therapy before retreatment for chronic hepatitis C.
Liver Int. 2007 Oct;27(8):1111-8.
PMID: 17845540
and
"Conclusions: There was no difference between the effects of the two induction therapies; potent induction therapy does achieve higher early viral clearance but not a higher SVR rate."
from
Potent induction therapy with interferon and ribavirin combination therapy does not achieve a higher sustained virological response rate in chronic hepatitis C with genotype 1b and high hepatitis C virus RNA level.
Hepatol Res. 2007 Sep;37(9):692-700. Epub 2007 Jun 15.
PMID: 17573949
you can bring up the full abstract for each of these by typing the PMID into the search dialog on the pubmed site. Clicking on "related articles" should bring up others. These are just my preliminary impressions; it definitely bears more looking into (part of why I was griping abot Shiffman's not doing this in an earlier post). Also, it's quite possible there is no relationship between response to induction tx and response to a designed drug like 503034.
"The induction treatment presented a better initial response, but this was not maintained at the end of treatment, and did not improve the results obtained with the standard treatment." (based on a non-peg study)
from:
Comparative study of the efficacy of an induction dose of interferon-alpha2b with ribavirin compared with standard combined treatment in naive patients with chronic hepatitis C.
J Viral Hepat. 2003 Nov;10(6):437-45.
PMID: 14633177
"RESULTS: Induction did not increase SVR compared with non-induction, but did increase the on-treatment response among genotype non-1 patients in Study 2. "
from
Efficacy of interferon alpha-2b induction therapy before retreatment for chronic hepatitis C.
Liver Int. 2007 Oct;27(8):1111-8.
PMID: 17845540
and
"Conclusions: There was no difference between the effects of the two induction therapies; potent induction therapy does achieve higher early viral clearance but not a higher SVR rate."
from
Potent induction therapy with interferon and ribavirin combination therapy does not achieve a higher sustained virological response rate in chronic hepatitis C with genotype 1b and high hepatitis C virus RNA level.
Hepatol Res. 2007 Sep;37(9):692-700. Epub 2007 Jun 15.
PMID: 17573949
you can bring up the full abstract for each of these by typing the PMID into the search dialog on the pubmed site. Clicking on "related articles" should bring up others. These are just my preliminary impressions; it definitely bears more looking into (part of why I was griping abot Shiffman's not doing this in an earlier post). Also, it's quite possible there is no relationship between response to induction tx and response to a designed drug like 503034.
question
Your comment
How well those EVRs translate to SVRs is still a year away (some of the induction-dosing studies indicated EVR improvements but no difference in final SVR).
Do you have any scientific study information on this, the reason I ask is because everything I have read says the opposite RVR translates to SVR 85-90% of the time. Regardless of how achieved.
Your comment
How well those EVRs translate to SVRs is still a year away (some of the induction-dosing studies indicated EVR improvements but no difference in final SVR).
Do you have any scientific study information on this, the reason I ask is because everything I have read says the opposite RVR translates to SVR 85-90% of the time. Regardless of how achieved.
I think many are trying to overanalize a press release, it's not a filing it's a pr...Things will be vague and that is what a pr is,,,Myself, I'll wait for more data (firm) before forming an opinion....and think I'll wait until after my tx is done to even do that.....carry on, I think I need a break from the internet for awhile. I believe I've become more obsessive over hepc here at 52 weeks of tx than when I began...not a good thing for me at this point treatment....later.;^)pro
sounds like SCH is playing fast and lose in their sand box. either we are going to see a lot of greased palms if they get approval anytime soon, or maybe they know their stats don't compare, but put out news anyway hoping to drive vertex down and jump on that profit wagon cause they know they're sunk and behind big time.....hey it's happens, it's wall street.
what's the insiders trading been doing? that's a bench mark of what promise is really still going on, are they holding, buying, cashing in their options, what??
what's the insiders trading been doing? that's a bench mark of what promise is really still going on, are they holding, buying, cashing in their options, what??
wasn't there a oat some time ago that suggested that vx and Interferon were additive or seven maybe synergistic?
the sprint-1 paragraph seems to describe 5 tx arms plus one control : same start 28/48, 4-week delayed start 28/48, and same start low riba with the w12 EVR stats currently at 70,79 and 59. (gotta have that riba!). How well those EVRs translate to SVRs is still a year away (some of the induction-dosing studies indicated EVR improvements but no difference in final SVR).
Optimal ordering of combo tx is still anyone's guess, but there is a pretty good argument for using the HCV-targeted drugs later in the game: ifn resistance is not well understood and there appear to be multiple ways the virus can evade its effects. On the other hand there are very specific, well-understood, mutations the virus must make to evade the effects of drugs like 503034,950 or 1626. If you can cut down the viral population enough via soc. the percentage of survivors able to find the necessary escape mutation in time to survive the new drugs may be pretty small.
Optimal ordering of combo tx is still anyone's guess, but there is a pretty good argument for using the HCV-targeted drugs later in the game: ifn resistance is not well understood and there appear to be multiple ways the virus can evade its effects. On the other hand there are very specific, well-understood, mutations the virus must make to evade the effects of drugs like 503034,950 or 1626. If you can cut down the viral population enough via soc. the percentage of survivors able to find the necessary escape mutation in time to survive the new drugs may be pretty small.
I believe there are 5 treatment arms for us.
2 at 48 weeks
2 at 28 weeks
1 SOC
They have one group in the 28 week arm and one group in the 48 week arm start all three meds day 1
the other group start SOC then at 4 weeks start all three
I am in the group that starts all three at the same time day1 for 28 weeks.
I was reading in earlier post where starting the PI after 4 weeks may have better benefits. I question that based on my nurse saying it is better to knock it down hard early and fast before it has a chance to start mutating. I believe the PI prevents the wild type from multipling and the SOC kills the rest. Why would SCH believe that coming out strong is less effective than waiting 4 weeks??
2 at 48 weeks
2 at 28 weeks
1 SOC
They have one group in the 28 week arm and one group in the 48 week arm start all three meds day 1
the other group start SOC then at 4 weeks start all three
I am in the group that starts all three at the same time day1 for 28 weeks.
I was reading in earlier post where starting the PI after 4 weeks may have better benefits. I question that based on my nurse saying it is better to knock it down hard early and fast before it has a chance to start mutating. I believe the PI prevents the wild type from multipling and the SOC kills the rest. Why would SCH believe that coming out strong is less effective than waiting 4 weeks??
Very confusing press release, makes for tedious reading trying to ascertain everything that's going on. A nice test matrix would have been a good aid, especially considering the multi-layered complexity of the shifting test protocols. Another thing I'm unclear on is whether all the 28 week folks got the 4 weeks of SOC alone and then 24 more weeks of SOC+boceprevir. If you look at "JOHNWS" (boceprevir test participant) statements:
"Still in treatment week 26 or 28. I started with SOC and the Boceprevir. I have been undetectable the whole way. Since week two. At week 28 I stop everything...I started with all three. SOC and Boceprevir. It is 28 weeks all three then stop all three at the same time. I have been on the compound the whole time 26 weeks so far."
Seems clear he was not started on SOC alone and then introduced boceprevir after 4 weeks as I thought the press release inferred. Offhand I don't remember reading a 28 week group with JOHNWS regimen of dosing (or maybe I just misread that wonderfully wordsmithed news release).
"Still in treatment week 26 or 28. I started with SOC and the Boceprevir. I have been undetectable the whole way. Since week two. At week 28 I stop everything...I started with all three. SOC and Boceprevir. It is 28 weeks all three then stop all three at the same time. I have been on the compound the whole time 26 weeks so far."
Seems clear he was not started on SOC alone and then introduced boceprevir after 4 weeks as I thought the press release inferred. Offhand I don't remember reading a 28 week group with JOHNWS regimen of dosing (or maybe I just misread that wonderfully wordsmithed news release).
that was indeed a very confusing press release:
http://www.sch-plough.com/schering_plough/news/release.jsp?releaseID=1064540
the protocol description for the tx-naive crowd (sprint 1 ) is clear enough; they all got the optimized (800mg) dosage and did quite well, which led to the recent high anxiety among the vertex stock crowd
the protocol description for the null-responders is a bit of a mess. Sounds like they weren't quite sure what the best dosage was so they were first randomized to low dosage regimes and those with promise were later transferred to 800. Unlike sprint 1, they got less than full duration of the optimized regime: "Patients received a maximum of 24 weeks of the optimized regimen". I agree that 7-14 isn't much to get excited about, but null-responders are a very tough crowd (note the 2% SVR with SOC). IMHO, the results warrant continuing optimism about this drug.
Note also aasld abstract 1391 which investigated the combined effect of 503034 and nm283 in a replicon system
"The combination of SCH 503034 and NM107 showed dose-dependent enhancement of replicon inhibition, compared with the effect of each inhibitor used alone. No cytotoxicity was observed. In cross-resistance studies, NM107 showed similar antiviral activity (EC50 1.5-2 μM) against wild-type and SCH 503034-resistant replicons. SCH 503034 showed similar activity (EC50 0.3-0.4 μM) against wild type and NM107-resistant replicons. When tested against their known resistance mutations, each compound showed a 5- to 125-fold loss in susceptibility. In selection experiments, the combination of SCH 503034 and NM107 significantly reduced the frequency of resistant colonies in a dose-dependent manner, compared to each inhibitor used alone.
Conclusions: In these in vitro studies, the combination of the polymerase and protease inhibitors showed enhanced anti-replicon activity with no cross-resistance and a greater genetic barrier to resistance. These results support clinical evaluation of this combination in patients with chronic hepatitis C."
OK so NM283's history, but their results about the benefit of a combo strategy are on point ( and r1626 is doing fine).
http://www.sch-plough.com/schering_plough/news/release.jsp?releaseID=1064540
the protocol description for the tx-naive crowd (sprint 1 ) is clear enough; they all got the optimized (800mg) dosage and did quite well, which led to the recent high anxiety among the vertex stock crowd
the protocol description for the null-responders is a bit of a mess. Sounds like they weren't quite sure what the best dosage was so they were first randomized to low dosage regimes and those with promise were later transferred to 800. Unlike sprint 1, they got less than full duration of the optimized regime: "Patients received a maximum of 24 weeks of the optimized regimen". I agree that 7-14 isn't much to get excited about, but null-responders are a very tough crowd (note the 2% SVR with SOC). IMHO, the results warrant continuing optimism about this drug.
Note also aasld abstract 1391 which investigated the combined effect of 503034 and nm283 in a replicon system
"The combination of SCH 503034 and NM107 showed dose-dependent enhancement of replicon inhibition, compared with the effect of each inhibitor used alone. No cytotoxicity was observed. In cross-resistance studies, NM107 showed similar antiviral activity (EC50 1.5-2 μM) against wild-type and SCH 503034-resistant replicons. SCH 503034 showed similar activity (EC50 0.3-0.4 μM) against wild type and NM107-resistant replicons. When tested against their known resistance mutations, each compound showed a 5- to 125-fold loss in susceptibility. In selection experiments, the combination of SCH 503034 and NM107 significantly reduced the frequency of resistant colonies in a dose-dependent manner, compared to each inhibitor used alone.
Conclusions: In these in vitro studies, the combination of the polymerase and protease inhibitors showed enhanced anti-replicon activity with no cross-resistance and a greater genetic barrier to resistance. These results support clinical evaluation of this combination in patients with chronic hepatitis C."
OK so NM283's history, but their results about the benefit of a combo strategy are on point ( and r1626 is doing fine).
I read the Schering press release and found it terribly confusing. I don't know if I read it right, but what it did say about treatment of previous non-responders didn't sound very compelling.
"In this study of well-documented null nonresponders, some patients achieved a sustained virologic response (SVR). Overall, 7-14 percent of patients in the boceprevir crossover arms achieved SVR compared to 2 percent in the control arm. SVR was associated with early virologic response and a longer course of therapy (more than 36 weeks). While potent antiviral activity with boceprevir was seen in the study, with viral loads in some patients decreasing below the limit of detection, viral loads for other patients decreased and then rebounded to baseline levels while on therapy and some patients relapsed following the end of treatment. "
Because the description of the study (7 arms!) was too difficult for my addled brain to decifer, I'm not sure what the treatment regimen in the paragraph above actually was. Being a 2-time nonresponder,I doubt I would retreat with a 7-14% response rate. Maybe someone else would interpret the info differently???
I don't own any Vertex or Schering-Plough stock.
"Mom"
"Mom"
"In this study of well-documented null nonresponders, some patients achieved a sustained virologic response (SVR). Overall, 7-14 percent of patients in the boceprevir crossover arms achieved SVR compared to 2 percent in the control arm. SVR was associated with early virologic response and a longer course of therapy (more than 36 weeks). While potent antiviral activity with boceprevir was seen in the study, with viral loads in some patients decreasing below the limit of detection, viral loads for other patients decreased and then rebounded to baseline levels while on therapy and some patients relapsed following the end of treatment. "
Because the description of the study (7 arms!) was too difficult for my addled brain to decifer, I'm not sure what the treatment regimen in the paragraph above actually was. Being a 2-time nonresponder,I doubt I would retreat with a 7-14% response rate. Maybe someone else would interpret the info differently???
I don't own any Vertex or Schering-Plough stock.
"Mom"
"Mom"
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