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Grading Hep C Stocks Exiting EASL Confab

Vertex does have ongoing interferon-free studies that combine Incivek with ribavirin and VX-222 -- an earlier-stage "non-nuc" drug candidate -- but the combination seems like a long shot. Earlier this year, the company reported that 82% of patients in the Phase II ZENITH trial achieved an SVR4. Vertex also added to its hepatitis C portfolio recently, acquiring two "nucs" through a partnership with Alios BioPharma. Unfortunately, those compounds do not yet have any clinical data and are substantially behind the market leaders.

Meanwhile, I expect already flat Incivek sales will decline rapidly as physicians urge patients to defer treatment until next-generation drugs reach the market. Street estimates now reflect a sequential decline in Incivek sales. If Vertex isn't able to expand use of the cystic fibrosis drug Kalydeco to a broader group of patients at premium pricing, Vertex might be a short. (I haven't done enough work to have a final opinion yet.) Either way, this wasn't a good EASL meeting for the Boston-based biotech.

Onyx Pharmaceuticals (ONXX):

Grade: B+

EASL is not only about hepatitis C. This is a meeting that covers all liver disease, which includes liver cancer. In this regard, Onyx emerged from EASL a solid winner even though the company presented no new data.

Some investors expected positive results from a 395-patient trial of Bristol-Myers' brivanib in late-stage liver cancer. Positive brivanib data would have been bad news for Onyx, whose key asset, Nexavar, dominates the liver cancer treatment market and faces no major competitors. Fortunately, brivanib proved both a dud and a point.

In a crowded Saturday session, the same investigator who led Onyx's Phase III study presented findings from Bristol-Myers' BRISK-PS, which randomized patients who had progressed on, or were intolerant of, Nexavar to receive either brivanib or placebo. Despite positive response rate (12% versus 2%) and time to progression (4.2 months versus 2.7 months) data, brivanib showed only a slight survival benefit (9.4 months versus 8.2 months). For comparison, Nexavar improved survival by 2.8 months in the Phase III SHARP trial that led to the drug's approval.

Before I get a slew of comments on the value of any benefit in this difficult-to-treat disease, I would note that the data were not even close to statistical significance and brivanib caused meaningful toxicity, including six patient deaths attributed to the drug by study investigators.

The key takeaway here -- other than that Nexavar's leading position in liver cancer remains safe -- is that surrogate endpoints like response rate and progression-free survival do not always correlate with a survival benefit. This is particularly true in studies of solid tumors. Despite what feels like the constant media coverage of emotional demands for quick approvals based on limited data, the BRISK-PS data once again highlight the need for companies to conduct randomized studies using real endpoints.

Whew. That does it for EASL 2012, but my travels continue. This afternoon I'm off to Boston to surprise Mom for her birthday. (Let's see if she reads all the way to the end of my columns.)

Happy birthday Mom!

Disclosure: Sadeghi has no positions in any of the stocks mentioned in this article.

Follow Nathan Sadeghi-Nejad on Twitter.
Nathan Sadeghi-Nejad has 15 years experience as a professional health-care investor, most recently as a sector head for Highside Capital. He has worked on the sell side (with independent research boutiques Sturza's Medical Research and Avalon Research) and the buyside (at Kilkenny Capital prior to Highside). Sadeghi-Nejad is a graduate of Columbia University and lives in New York. You can follow him on Twitter @natesadeghi.
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