PRINCETON, N.J. ( TheStreet) -- Pharmasset ( VRUS) shares are soaring on the release of new but very preliminary data that hints at a breakthrough, all-oral cure for hepatitis C.

Treatment with two oral drugs developed by Pharmasset resulted in 15 of 16, or 94%, of patients reporting undetectable levels of the hepatitis C virus after 14 days, according to interim results from a study released Monday.

These early data on the two Pharmasset drugs -- PSI-938 and PSI-7977 are the best reported to date by any company seeking to develop a new, all-oral therapy for hepatitis C. This Pharmasset effort is drawing even more attention because it potentially eliminates the need for patients to be treated with long-acting interferon, one of two drugs currently used to treat hepatitis C but which is difficult for patients to tolerate and causes many side effects.

Pharmasset shares rose 24% on Monday and were up another 8% to $66.92 on Tuesday.

The PSI-938 and PSI-7977 combination data were released Monday in a research abstract released online by the European Association for the Study of the Liver (EASL), which holds its annual meeting March 30 through April 3.

EASL makes research abstracts for its annual meeting freely available to the public but prohibits journalists from writing about the data contained in the research abstracts until they are presented at the annual meeting. TheStreet refuses to adhere to EASL's media embargo since these hepatitis C data are freely available online now and are impacting the stock prices of publicly traded companies developing hepatitis C drugs.

While investors are displaying great enthusiasm for the Pharmasset all-oral drug combination, the data from the study are very early. One particular risk seen in other, similar studies that omit long-acting interferon is the development of mutated hepatitis C virus that can quickly become resistant to drug treatment.

None of the patients treated in the Pharmasset study have reported rebounding levels of hepatitis C virus, according to the research abstract, but so-called viral rebound may emerge as patients are treated longer, or when treatment is stopped and these patients are followed long-term to determine if they are truly cured.

Pharmasset owns full rights to both PSI-938 and PSI-7977. The company is developing another hepatitis C drug, RG7128, in partnership with Roche.

"We believe the full data of a 14-day combination of PSI-7977 / PSI-938 to be presented at the upcoming EASL could show proof of principle for a nuc-nuc combination and position Pharmasset as one of the front runners in the race to develop an interferon-free regimen, which is considered a Holy Grail in hepatitis C treatment," said Leerink Swann analyst Howard Liang in a note to clients Tuesday.

The EASL meeting at the end of the month will also feature data from other companies seeking to develop various combination treatments for hepatitis C.

Vertex Pharmaceuticals ( VRTX) is studying a "quad" regimen consisting of two experimental drugs, VX-222 and telaprevir, combined with the current standard of care, long-acting interferon and ribavirin. An EASL research abstract released Monday reported treatment with Vertex's "quad" therapy resulted in 38-57% of patients with undetectable virus after two weeks and 86-87% undetectable after four weeks.

One potential competitive disadvantage to the Vertex quad is that patients still need to be treated with long-acting interferon, which requires weekly injections. Vertex previously reported disappointing results from an all-oral Hep C drug regimen that eliminated interferon.

Telaprevir is currently under review by regulators in the U.S. and Europe. The U.S. Food and Drug Administration is expected to make an approval decision on or before May 23.

Gilead Sciences ( GILD) and Bristol-Myers Squibb ( BMY) will also be presenting new data from Hep C combination drug studies at the EASL meeting later this month.

--Written by Adam Feuerstein in Boston.

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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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