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Biotech Notebook: Vertex, Medicines Co.

Adam Feuerstein

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.

Speaking of FDA filings and drug reviews, The Medicines Co. (MDCO Quote) is keeping mum on its effort to seek approval for a acute hypertension drug Cleviprex. The company has chosen not to disclose its so-called "PDUFA date" for Cleviprex -- the deadline by which the FDA must issue its approval decision.

Last September, The Medicines Co. announced that U.S. regulators accepted the Cleviprex filing for review, but since then, the company has maintained radio silence on the subject.

If the FDA accepted the Cleviprex filing in mid-September, the Medicines Co. likely submitted its application in the middle of July, since the agency usually takes two months to accept or reject such filings. Assuming a standard, 10-month review period would put the Cleviprex PDUFA date in the mid-May time slot. (Make that late May or early June if you want to be even more generous to The Medicines Co.)

It's June 10, so why hasn't The Medicines Co. given us any word on the FDA's Cleviprex decision?

"We have received no formal action from the FDA" on Cleviprex, says The Medicines Co. investor relations head Robyn Brown.

Brown adds that the company made a deliberate decision to keep quiet about the Cleviprex FDA review because it doesn't want investors to fixate on a specific FDA decision date.

Given the spate of tardy drug review decisions by the FDA these days -- Cardiome's (CRME Quote) Vernakalant springs immediately to mind -- keeping the pressure off a specific PDUFA date might not be a bad strategy. Then again, investors (and columnists) can do the math, so questions about Cleviprex's FDA outlook are going to be raised increasingly as the calendar slips into summer.

With Boston baking under mid-90-degree temperatures, summer seems to have arrived a bit earlier than normal. Experienced biotech investors know this signals the start of the sector's off season. The medical conference calendar goes dark and investor interest in the sector wanes.

Don't forget about biotech entirely, however, because there are a decent number of events in the next few months that should move some stocks. At the top of my summer watch list is the Alzheimer's clinical trial data releases from Myriad Genetics (MYGN Quote) and Elan (ELN Quote) and Wyeth (WYE Quote), respectively. I'll have more to say on those two events later.

We could get word from MiddleBrook Pharmaceuticals (MBRK Quote) on a possible sale of the company, and Vanda Pharmaceuticals (VNDA Quote) is expecting an FDA approval decision on its schizophrenia drug iloperidone. (The decision will impact Titan Pharmaceuticals (TTP Quote), too.)

YM BioSciences (YMI Quote) should release results from its colon cancer trial for nimotumumab; while SuperGen (SUPG Quote) could received word on the outcome of its survival trial for Dacogen in patients with myelodysplastic syndrome.

Lastly, Introgen Therapeutics (INGN Quote) has promised to file its head-and-neck cancer drug Advexin with regulators here and in Europe by the end of June. This has been a stalled effort four years in the making, so we'll see if Introgen finally makes good on its word.