Investors Eye Vertex Hep C Competitor: BioBuzz

CAMBRIDGE, Mass. (TheStreet) -- The hepatitis C drug telaprevir from Vertex Pharmaceuticals(VRTX Quote) is working its way through phase III clinical trials and is widely expected to be the first new drug in years approved for the treatment of the chronic liver disease.

But how long can telaprevir maintain its "king of the mountain" status? And which drug, if any, will be the one to knock telaprevir from its perch? Questions like these form a recurring subplot for Wall Street twice a year when liver disease experts gather to present new research.

Boerhinger Ingelheim's BI-201335 (let's call it '335 for short) seems to be the telaprevir competitor receiving the most attention as Wall Street gears up for the American Association for the Study of Liver Disease annual meeting, Oct. 30 through Nov. 4.

'335, like telaprevir, is a protease inhibitor targeting the hepatitis C virus, but '335 has the potential to be dosed once daily. Telaprevir will be dosed three times daily upon approval, although the drug could potentially be given on a twice-daily schedule.

Research abstracts for the AASLD meeting were released last week and the early data from '335 appears to place the drug's efficacy squarely in line with what's been reported from older telaprevir studies. ['335 is still in phase II studies, so it's year behind telaprevir in terms of clinical development.]

The debate over '335's safety, however, seems unsettled. Bank of America/Merrill Lynch analyst Rachel McMinn calls '335's safety profile "not as clean as feared" due to reports of jaundice and severe rash.

Morgan Stanley's Steve Harr, however, looks at the same '335 data and sees a potent telaprevir competitor. The rate of severe rash from '335 is less than that reported with telaprevir and the jaundice reports, while raising concerns about potential liver toxicity, appear to resolve after a few weeks of treatment, he says.

More detailed data on '335 will be presented when the AASLD meeting convenes in a few weeks, so expect to hear a lot more about '335 and its competitive profile against Vertex's telaprevir.

On a related note, a rumor floating around today has Novartis bidding $55 a share for Vertex with a deal imminent. Vertex shares reacted by trading 1-2%.

Seattle Genetics Halts Lymphoma Drug Study

(At 7:37 AM EDT)

Seattle Genetics(SGEN Quote) discontinued a phase II study of its experimental lymphoma drug dacetuzumab, of SGN-40 after independent trial monitors determined that patients were not benefiting from the drug, the company said Monday.

Seattle Genetics and the Genentech unit of Roche are co-developing dacetuzumab. Four other phase I trials involving the drug in patients with non-Hodgkin's lymphoma and multiple myeloma are ongoing.

The phase II study halted Monday enrolled patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL). Patients were treated with dacetuzumab or a placebo in combination with a background regimen of Roche's Rituxan plus chemotherapy.

Seattle Genetics' lead drug is brentuximab, or SGN-35, which is enrolling patients in a pivotal phase III study of Hodgkin's lymphoma.

Seattle Genetics' shares closed Friday at $13.16.

Monday' Analyst Action

Sanford Bernstein is positive on Human Genome Sciences(HGSI Quote), saying that fears about the outcome of the upcoming BLISS-72 phase III study of Benlysta in lupus are overblown.

JP Morgan says risk-reward for Acorda Therapeutics(ACOR Quote) is favorable ahead of next week's FDA advisory panel meeting of fampridine for multiple sclerosis.

Jefferies downgrades AMAG Pharmaceuticals(AMAG Quote) to hold and lowers earnings estimates due to slow uptake of Feraheme in the dialysis market. Feraheme's potential in the non-dialysis setting remains promising, Jefferies says.

Amicus Therapeutics(FOLD Quote) downgraded to neural by JP Morgan and while Morgan Stanley advises clients to remain on sidelines following the failure Friday of a phase II study of the company's drug Plicera in Gaucher disease.