Vertex SVR Projection

I want to make it clear that this is the work of an analyst.  These numbers are not coming from Vertex.  Furthermore, the SVR rate that the Phase 2 trials yield will not likely be the ultimate SVR rate that can be accomplished when the drug is approved.  I would have liked to have seen a higher SVR rate but this estimate may be close.  These numbers may or may not reflect the numbers we'll see at the AASLD in 5-6 weeks (but they may be close).  The SVR rate from Phase 3 may also be better that these estimates.  I just wanted to get this out there so you can see someone elses estimates.  These numbers may also in part explain why the stock price fell a bit last week.-Willy


http://www.thestreet.com/_yahoo/newsanalysis/biotech/10380903.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Watch for More Volatility at Vertex

By Adam Feuerstein

BOSTON -- Another nugget of positive clinical data came out last week from Vertex Pharmaceuticals (VRTX - Cramer's Take - Stockpickr - Rating) and its experimental hepatitis C drug, but it has been a bit overshadowed by some downward volatility in the company's stock. At a meeting of infectious-disease researchers in Chicago, investigators reported that some patients who prematurely discontinued treatment with Vertex's drug telaprevir were still able to clear the hepatitis C virus completely from their system. "This speaks to the potency of telaprevir," says Cowen biotech analyst Rachel McMinn, who covers Vertex. "These patients received a short course of therapy with telaprevir [less than the 12 weeks they were supposed to receive] , but they still were able to achieve a sustained virologic response." McMinn has an outperform rating on Vertex, and Cowen doesn't do banking for the company. While bullish on Vertex and telaprevir, McMinn was also responsible (albeit inadvertently) for raising some worries about the drug that caused the stock to take a midweek swoon. In a short note to clients last Wednesday, McMinn lowered her prediction for the percentage of patients in the ongoing telaprevir U.S. phase II study who would achieve a sustained virologic response, or SVR. (In layman's terms, these patients are cured of hepatitis C.) McMinn lowered her projected SVR range to 59% to 61% from her previous estimate of 61% to 65%. The actual data on telaprevir and its SVR rate will be made public in early November at a liver disease meeting being held in Boston.

Vertex shares were trading around $40 Wednesday when McMinn's note hit trading desks. The stock quickly fell about 7% to an intraday low of $37.33. The stock has only partially recovered, closing Friday at $38.24. In a postnote interview late last week, McMinn said that she adjusted her estimate based on the data presented at this week's infectious disease meeting, but that she didn't intend to send a negative signal. "Our earlier projections [for a telaprevir cure rate] were a little too high, but there was nothing negative fundamentally to take away from the data presented," she said. To put these numbers in perspective, a hepatitis C cure rate of 59% to 61% for telaprevir would represent a significant improvement over the current standard of care, which only succeeds in eliminating the hepatitis C virus from about 40% of U.S. patients. Telaprevir is a pill designed to attack hepatitis C by inhibiting the protease enzyme, one of the key enzymes the virus uses to copy itself. This "direct antiviral" approach differs from current hepatitis C drugs, which boost the immune system's ability to tamp down and eliminate the virus. The current standard of care for hepatitis C patients is a weekly injection of long-acting alpha interferon combined with daily oral doses of a generic drug, ribavirin. A normal treatment course for Type 1 hepatitis C (the most prevalent form) takes 48 weeks to complete, and many patients find the side effects, such as flulike symptoms, anemia and depression, difficult to tolerate.
Telaprevir is being combined with interferon and ribavirin to create a more potent and less time-consuming hepatitis C treatment regimen. Three large phase II studies are underway, investigating various treatment schedules. The most promising combination so far treats hepatitis C patients for 12 weeks with the triple combination (telaprevir, interferon and ribavirin), followed by 12 weeks of interferon and ribavirin on their own. That's 24 weeks of total treatment -- half the current standard of care. At the infectious disease meeting held last week, investigators from the U.S.-based phase II telaprevir study, known as Prove 1, reported new details on a group of 27 patients enrolled in two arms of the study. These patients didn't receive the full 12 weeks of telaprevir for various reasons. However, investigators were able to follow up on 19 of these 27 patients to determine whether even a shortened course of telaprevir would be effective enough to result in a cure. Of these 19 patients, 7 of them, or 37%, achieved an SVR, or cure. The other 12 patients relapsed. It was entirely possible to assume that these hepatitis C patients who weren't able to complete their treatment would have relapsed or otherwise not have been able clear the virus from their system. Instead, at least some of them were cured, which suggests that telaprevir is a very potent drug, McMinn says. Although data collected and presented on telaprevir have been promising so far, it's the results not yet made public that will inform the ultimate verdict on the drug. The most important telaprevir data to date will be presented Nov. 2-6 at the annual meeting of the American Association for the Study of Liver Disease. Vertex shares have been on a monster run since late June, when shares had dipped to around $26. This week's volatility may be a precursor of more to come, as some investors choose to take profits instead of risking gains before new data are released in November.

[miked]

What do these numbers mean.....

"a hepatitis C cure rate of 59% to 61% for telaprevir would represent a significant improvement over the current standard of care, which only succeeds in eliminating the hepatitis C virus from about 40% of U.S. patients."

The numbers that I have been tracking for SVR are 88-92%, assumuming RVR.

[desrt]

It means "assuming RVR" is a rather large assumption.

[Proactive]

and what are the RVR numbers for SOC? I wonder how difficult it is going to be to convince insurance companies to approve the drug (assuming the fda does)...If patient does not get a RVR, chances are somewhat better of SVR than SOC? That also assumes the patient is not one of the 13%(?) with adverse tolerance evetts from the drug?
the way they have structured their phase trials to show best case outcomes, I believe their are a lot of questions to be answered....We have no idea about longterm after tx sides either...perhaps we are still a drug generation away from a better mouse trap

[zazza]

I think RVR numbers for SOC are around 90% SVR as well.

[zazza]

The benefit of Telepravir is that more people attain RVR. Right? With SOC only about 20% of genotype 1 get RVR.

[Andiamo1]

If the FDA approves the drug, the insurance companies have no choice; they have to pay.  That is written into the contract.  They may have other factors that limit the amount and  that will vary by company.

Not to say they won't try and get away without paying, but persistence will get you the money.

[Willy50]

The stock took a tumble because others thought it would be higher; it may be.  As mentioned, whatever the results are for Prove 1's or even Prove 2's it doesn't reflect what the ultimate SVR rates that can be achieved in optimal conditions.

Even IF these numbers are correct they reflect what may be a worse case scenario that will only become better.  This drug almost certainly will go to Phase 3, be approved and become available relatively soon.  It appears that it will cut treatment time in half, it may therefore reduce some lingering longer term side effects of extended treatments and appears to raise the SVR rate around 50%.  We could have fared far worse.  The better case scenarios (not even best) won't be seen until the Phase 3 studies are performed and results tallied.  Vertex has indicated that they may want to try some shorter treatments again, perhaps for ultra RVR patients.

I know that the numbers are not that great but try to keep them in perspective; they are one analysts estimates.  This isn't the end result but only results from very early Phase 2 trials.

best,
Willy

[willows]

Vertex is so volatile that even an analyst mis speaking causes the stock price to fall.  I've been watching it for a year now and saw the same movement from the rash issue when it was first raised.  But the combination of increasing the SVR rate by 10 to 20% and shortening treatment time is truly enough to bring an FDA approval, hopefull in time for me to start it in 2009.   I mean, golly, they approved interferon, didn't they?  Teleprevir would have to be pretty bad to not be approved and the numbers from both trials are still in line, exactly in line..and all leading to a probable approval for teleprevir.

Don't get me wrong, I understand teleprevir is not a "magic bullet", it will be many years before something like that is found.  And it may be a vaccine for folks not yet exposed to Hep C.  The rest of us will have to cobble together combo tx and keep on with the good fight.  I am so ready for this.

[Willy50]

I just listened to the latest Vertex webcast.  Ian Smith, a CEO with Vertex is maintaining that 80-90% in Prove 1 and 2 RVR.  There is a 7% breakthrough rate, of which all (save one case in 300 plus treating) occurred in the firts 4 weeks.  He feels that IF (this is a big IF) they can keep people on treatment they can experience a 90% CURE RATE.  

Got to go to work but I think this is happier news to ponder than the analyst report.  Full disclosure and less guesswork in about 5 weeks at AASLD.

best,
Willy

[susan400]

Then, they should; A: keep people on treatment past 4 weeks and B: only give it with the SOC drugs, as it obviously does not work to keep a lasting remission for those of us who got the group with No Riba.   I.E.,  Amanda relapsed after her week 4 and I had breakthrough at some point in the first 5 weeks.  Also, I'm one of those people that got a bad rash on it.  As you can see....I'm not as gung-ho on the VX as the others are.  At least, I'm grateful to have had the chance to know that it's not something for me and I'm grateful that I got free drugs and labs and a biopsy-at least that's something.  I don't see me treating again w/VX-950.

Susan