Adam Fuerstein thestreet.com
Will Vertex Pharmaceuticals seek regulatory approval for its hepatitis C drug candidate telaprevir in 2009 -- one year earlier than Wall Street expects -- based on the positive results from the PROVE 3 clinical trial announced Monday?
That's the question most on the minds of Vertex investors, and one that I debated back and forth Monday with my colleague Justin Ferayorni in the Columnist Conversation section of RealMoney.com, a sister site to TheStreet.com.
For starters, we agreed that the telaprevir data in treatment-resistant hepatitis C patients were really impressive. Justin went further, predicting that Vertex could get telaprevir approved early based on these data because "these tough [patient] populations with objective endpoints (viral load reduction can be quantified) tend to have a low bar at the FDA."
Justin went on to make the point that the Food and Drug Administration moved quickly to approve new antiviral drugs for desperately ill HIV patients back in the mid-1990s. The situation with telaprevir in treatment-resistant hepatitis C patients is similar, which could prompt the FDA to be extra accommodating.
In response to Justin's comments, I said I wasn't as optimistic about an early FDA filing for telaprevir, despite my belief that the PROVE 3 data are great -- and strong enough for approval. (Assuming final data are as good as the interim look we got Monday.)
Unfortunately, the FDA doesn't ask my opinion, and these days, the agency seems so risk averse and unwilling to move with alacrity on anything that I fear regulators are likely to ask Vertex to run a phase III study before filing for approval. The PROVE 3 study is well-designed for a phase II trial, but for a phase III study, it's probably smaller than what regulators are comfortable with. It's also not entirely blinded between the treatment and control arms, which will make the FDA nervous.
Nor do I believe that the FDA will be swayed by the "treatment-resistant hepatitis C patients are just like HIV patients" argument. Hepatitis C is a serious and fatal disease, but it also progresses more slowly than HIV. Many patients, even those who have failed prior treatment, can live a long time without the disease progressing to the point where life-saving re-treatment becomes imperative.
Cowen and Co. biotech analyst (and hepatitis C guru) Rachel McMinn is a Vertex bull, but she too says the company will have a challenge convincing the FDA to approve telaprevir for these hard-to-treat Hep C patients without running a new study.
"It's not a zero percent chance, but it's really a tough call," says McMinn, adding that the FDA will likely struggle with the notion that the unmet medical need for these patients is great enough now to justify an approval instead of waiting two years for more definitive and complete data on telaprevir's efficacy and safety.
None of this means that Vertex shouldn't push the FDA to review telaprevir as soon as possible; and the company has stated it will do just that once the final data from PROVE 3 are in hand in late 2008, early 2009.
If Vertex is successful, telaprevir could be filed with the FDA in mid-2009 with an approval in late 2009. If not, the drug will likely be filed in the second half of 2010 based on data from an ongoing phase III study in treatment-naïve hepatitis C patients.
Vertex shares traded up 2.5% to close at $33.06 Monday -- a somewhat muted response to great clinical data that, I suspect, is tied to doubts about Vertex's ability to seek early approval for telaprevir.
There can be no complaining, however, about the performance of Vertex shares over the past few months. The stock has more than doubled off its March lows in the $15 range, demonstrating once again how volatile Vertex -- and hepatitis C stocks in general -- can be.
