This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

A Hep C Breakdown Will Test Investors' Love For Vertex Pharma

CAMBRIDGE, Mass. (TheStreet) -- We're about to test the thesis that investors are only interested in Vertex Pharmaceuticals (VRTX) for its blockbuster cystic fibrosis drug program and care little for anything the company does in hepatitis C.

After Thursday's close, Vertex announced a U.S. Food and Drug Administration partial clinical hold on its lead hepatitis C drug candidate VX-135 due to liver toxicity seen in patients treated at higher doses.

VX-135 is Vertex's nucleotide "nuc" polymerase inhibitor which is playing catch-up to other more advanced nucs in development for the treatment of hepatitis C, most notably Gilead Sciences' (GILD) sofosbuvir.

Either by luck, smarts or a combination of both, Gilead has managed to avoid liver toxicity issues with its nuc (obtained from Pharmasset in the famous $11 billion acquisition at the end of 2012) that have dogged other companies. Today, it's Vertex in trouble, but Idenix Pharmaceuticals (IDIX) and most famously, Bristol-Myers Squibb (BMY), have also landed in hot water.

"God really loves Gilead," quipped ISI Group analyst Mark Schoenebaum, in an email to investor clients following the Vertex announcement.

Vertex shares are down 10 percent to $78.77 on news of the VX-135 partial clinical hold, suggesting that, indeed, investors were hoping the company might resurrect its hepatitis C drug business. Today's unfortunate casts a cloud over that idea.

Of course, most of Vertex's $19 billion valuation is centered on the cystic fibrosis drug program, and rightly so.

Gilead shares are up 5 percent to $63.98 in after-hours trading on the Vertex setback plus a strong second-quarter earnings report.

The FDA placed a partial clinical hold on VX-135 because of elevated liver enzymes reported in patients treated with a 400 mg dose of the drug in a phase II study conducted in Europe. These patients stopped taking VX-135 and their liver enzymes returned to normal, the company said.

FDA reacted by barring Vertex from treating any new patients with doses of VX-135 higher than 200 mg in the U.S. Studies involving 100 mg doses of VX-135 continue, the company said.

Hepatitis C studies involving 100 mg and 200 mg doses of VX-135 in Europe are also continuing.

-- Reported by Adam Feuerstein in Boston.

Stock quotes in this article: VRTX, IDIX, GILD, BMY 
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs