Biotech Mailbag: Vertex Has Verve

But there were also a lot of patients in the BI201 study reporting significant viral rebound by the time the monotherapy portion of the study ended at Day 14. This means that while BI201 was able to suppress the hepatitis C virus, the effect was somewhat short-lived. This raises the risk that BI201 might not be as effective in some hepatitis C patients, particularly those who have not responded well to previous treatment.

By comparison, Vertex's telaprevir caused far less viral rebound in its 14-day monotherapy study, and so far, Vertex appears to be very potent in treatment-resistant patients.

"Investors have been paranoid about telaprevir competition, but at this year's meeting, I think we saw that there doesn't appear to be anything more potent than telaprevir, and we still need to see a lot more data on safety," Cowen & Co. biotech analyst Rachel McMinn told me in a phone conversation after AASLD. She has an outperform rating on Vertex.

As a reminder, Vertex's phase III studies of telaprevir in both treatment-naïve and treatment-experienced hepatitis C patients are expected to report results in the first half 2010.

Before those data are released, competitors will continue to have their say. The European liver disease meeting is scheduled for April 22-26, 2009, while the next U.S. meeting will be held in November 2009.

Cathy B. emails with a comment and a question: "Sangamo BioScience (SGMO - commentary - Cramer's Take) doesn't deserve this kind of trashing. Sure, this SB-509 study didn't work but the other studies did. When a company is developing breakthrough technology, you have to anticipate bumps in the road. Agree?"

Not really. This phase II study of SB-509 in mild to moderate diabetic neuropathy patients was designed with so many efficacy endpoints that it practically guaranteed Sangamo some positive data to share with investors. I'm a Sangamo skeptic, but even I was cowed from coming out strongly against the stock, because I figured this was a low-bar phase II study in which SB-509 would hit at least one efficacy endpoint.

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At the time of publication, Feuerstein's Biotech Select model portfolio was long AMAG and OPTR.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.