Vertex Pharmaceuticals' ( VRTX) experimental hepatitis C drug telaprevir is capable of significantly improving cure rates in the most difficult-to-treat patients, according to final results from a phase II study released Wednesday afternoon.

The new data come from Vertex's PROVE 3 study, which enrolled 453 patients who had failed prior treatment with the current standard drug regimen for hepatitis C -- a 48-week course of long-acting interferon plus ribavirin. In the phase II study, these patients were randomized to receive either treatment with a combination of telaprevir plus the standard therapy or retreatment with the standard therapy alone.

In all, 51% of patients treated with a 24-week regimen that included 12 weeks of telaprevir reported undetectable levels of the hepatitis C virus six months after treatment. In hepatitis C parlance, that's known as a sustained virologic response, or SVR. Simply stated, these patients are considered cured of hepatitis C.

By comparison, only 14% of the patients retreated with 48 weeks of standard therapy alone achieved an SVR, or cure, six months after treatment.

The final data from the PROVE 3 study was released online Wednesday in a research abstract ahead of next month's meeting of the European Association for the Study of the Liver (EASL), one of two important scientific meetings held each year devoted to hepatitis C research.

Researchers had previously presented the PROVE 3 results from patients treated with telaprevir, but Wednesday's research abstract was the first time data was made public on the patients in the study's control arm retreated with standard therapy alone.

A host of companies are racing to develop new hepatitis C drugs. Vertex and partner Johnson & Johnson ( JNJ) are in the lead with telaprevir, which is nearing the completion of patient enrollment in a series of pivotal phase III studies. These studies are enrolling patients both newly diagnosed with hepatitis C who are being treated for the first time as well as patients like those in PROVE 3 who have failed prior treatment.

To date, telaprevir is the only one of the new crop of experimental hepatitis C drugs that have shown the ability to cure in significant numbers patients who have failed prior treatment.

The commercial market for so-called treatment-failure patients is substantial. An estimated 250,000 to 300,000 hepatitis C patients in the U.S. have failed current interferon-ribavirin therapy and are waiting for something new and more effective to be approved so they can be retreated, and hopefully cured.

Many of Vertex's hepatitis C competitors are still in earlier stages of clinical development, but the drugs pose a threat because many can be dosed once or twice a day -- more conveniently than telaprevir, which requires patients to take the drug three times a day.

Schering-Plough ( SGP), Merck ( MRK), Bristol-Myers Squibb ( BMY), InterMune ( ITMN), Pharmasset ( VRUS) and Anadys ( ANDS), among others, will also be presenting data on their drugs at next month's EASL meeting.

Some of the most highly anticipated, albeit early stage, data will come from a small study treating hepatitis C patients with a combination of InterMune's ITMN-191 and Pharmasset's R7227. (Both drugs are partnered with Roche.) This study, known as INFORM-1, is the first in which two experimental drugs are being used in combination without long-acting interferon and ribavirin.

A research abstract from the INFORM-1 study, also released Wednesday afternoon, reported significant reductions in the amount of hepatitis C virus in patients treated with the ITMN 191/R7227 combination. The data in the abstract was preliminary, however, and more data will be presented at the EASL meeting.

Earlier this month, Vertex acquired ViroChem, a privately held Canadian drug maker, in order to expand its pipeline of hepatitis C drugs. Vertex is planning combination studies of telaprevir with a promising drug from ViroChem, VCH 222, that will also seek to eliminate the need for interferon and ribavirin.

Vertex shares were down 1.5% to $29.06 in recent trading.

At the time of publication, Feuerstein's Biotech Select model portfolio was long Vertex.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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