Hep C Rivals Nip at Vertex

InterMune(ITMN Quote - Cramer on ITMN - Stock Picks) has almost no presence at this year's liver meeting, but that hasn't stopped the company's fortunes from fading sharply in the minds of many investors here.

The problem is that InterMune's protease inhibitor, dubbed ITMN-191, is dosed three times a day. That's a non-starter for a second-generation hepatitis drug in this class. Roche paid a lot of money to InterMune to tie up ITMN-191 in a partnership.

After this weekend, it appears that Roche overpaid.

If there was a sleeper drug that made its presence felt this weekend, it was nitazoxanide from privately held Romark Labs. Approved as a niche drug for diarrhea caused by two different parasites, nitazoxanide (brand name Alinia) appears to also be very potent against the hepatitis C virus.

Data from a small phase II study conducted in Egypt on hepatitis C patients with genotype 4 will be presented later this week, but results were made public Friday. The company is starting a new study in Genotype 1 patients (more prevalent here and in Europe) soon.

Will any of the larger companies investing heavily in hepatitis C try to partner up on nitazoxanide, or even buy the small company? One obstacle to a potential deal: Alinia is already approved here and priced at around $40 per month as a diarrhea treatment. That's potentially good for hepatitis C patients, but very bad for profit-hungry drug companies.

One last word (for now) on Vertex: The company is holding an investor meeting tonight, where it will discuss the telaprevir data and answer questions about the drug's future. As I said above, investor sentiment here isn't going Vertex's way, so this meeting will be a very important chance for the company to make a strong case for telaprevir.

Vertex management is rarely at a loss for words when it comes to its hepatitis C drug, so the meeting should be enlightening, and entertaining.

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