BOSTON ( TheStreet) -- Trying to make sense of the rapidly changing field of hepatitis C drug research kicks off this week's Biotech Stock Mailbag.

Evan R. emails, "It looks like Pharmasset ( VRUS) was the big winner at the hepatitis C conference. What's your take on hepatitis C stocks now?"

I could easily devote this entire Mailbag to hepatitis C because so much of the data presented at the just-wrapped European Association for the Study of the Liver (EASL) meeting has the potential to radically improve the way hepatitis C is treated. It's never a great time to be a Hep C patient, obviously, but the prospect for better, faster and more well-tolerated cures coming relatively soon should be a real source of hope and optimism.

Investors have a tougher challenge trying to pick a winning stock or two (or three of four) from among the many that are racing to bring these new Hep C drugs to market.

Case in point: The buzz at this week's EASL meeting was about new, all-oral multi-drug combinations for Hep C treatment that won't likely be ready for approval or sale for four or five years. The Hep C treatment landscape is evolving quickly and investors are jumping so far ahead that the looming April/May advisory panels and approval decision dates for new drugs from Vertex Pharmaceuticals ( VRTX) and Merck ( MRK) seem like old news already.

It sounds incredibly weird to even conjure this thought, but from Wall Street's what-have-you-done-for-me-lately perspective, Vertex's telaprevir and Merck's boceprevir look a bit old in the tooth even before the two drugs are approved!

Pharmasset was the belle of the EASL ball after presenting early data (in a relatively small number of patients) demonstrating that two oral drugs -- PSI 7977 and PSI 938 -- could render the Hep C virus undetectable with no obvious signs of resistance or relapse. This still-experimental regimen is remarkable for the absence of interferon or ribavirin -- the former injected, the latter oral -- which make up the current standard of care for Hep C treatment.

A typical Hep C patient today is treated with interferon and ribavirin for one year, enduring side effects that include flu-like symptoms for a 40% to 50% chance of being cured.

By this spring or early summer, the addition of 12 weeks of treatment with Vertex's telaprevir to a shortened, six-month course of interferon and ribavirin will boost cure rates to 75% to 80%. Telaprevir+interferon+ribavirin will be the new standard of care for Hep C. Merck's boceprevir plus standard of care should be in the mix, too.

Look ahead a few more years. Pharmasset is dangling the prospect of an even simpler Hep C regimen: Two pills, taken once a day for six months providing odds of a cure as good as, perhaps even better, than what's achieved with the triple-drug telaprevir regimen.

As an encore of sorts, Pharmasset also wowed the EASL crowd with strong antiviral response data from studies combining PSI7977 with interferon and ribavirin. PSI7977 may be four or so years away from the market, but it's already looking like the next Hep C treatment standard bearer.

Little wonder Pharmasset shares continue to surge even after EASL ended. The stock closed Wednesday at $98.68 but was off 2% to $96 in mid-day trading Thursday. Still, remember Pharmasset shares were worth $50 one month ago.

Vertex emerged from EASL under more pressure to make the most of telaprevir commercially before competition arrives on the scene. Telaprevir is a major advance in Hep C treatment and the drug should pass easily through an April 28 FDA advisory panel and receive agency approval on or before May 23. As effective as the drug is for treatment-naive Hep C patients, the drug will have an even more beneficial effect for the hundreds of thousands of patients with Hep C virus that wasn't cured by the current standard of care.

Vertex's dilemma is that investors know this story well and have baked much of telaprevir's potential into the company's valuation already. What concerns investors today and perhaps even more post-EASL is that the slope of the expected telaprevir revenue tail may be steeper than previously appreciated. Investors are also raising questions about what Vertex is doing to sustain its Hep C franchise in 2015 and beyond when new drugs are expected to enter the market.

Looming largest in Vertex's rear-view mirror are Johnson & Johnson's ( JNJ) TMC435 and perhaps Bristol-Myer Squibb's ( BMY) BMS 052. Worth noting, too, that Bristol-Myers and Pharmasset are already testing combinations of their respective Hep C drugs.

Vertex is working on new combination therapies, too, but so far, the efforts haven't yielded much. A two-drug regimen of telaprevir plus VX-222 was shelved, leaving Vertex experimenting with a "quad" regimen of telaprevir, VX-222 plus standard of care.

VX-222 was hightly touted as Vertex's next-generation Hep C drug candidate when it was picked up through the 2009 acquisition of privately held Virochem. Today, VX-222 isn't looking so hot, which means Vertex needs to license or buy something else if the company wants to stay in the Hep C game long term.

Roche is in desperate shape because Pegasys, the market-leading interferon, is going away. Roche bought InterMune's ( ITMN) Hep C drug and licensed a first-generation drug from Pharmasset but neither of these compounds are working out as hoped.

Gilead Sciences ( GILD) continues to make slow but steady progress. A late-starter to Hep C drug development, Gilead came out of EASL with progressively better data on multiple drug regimens although its programs are still early stage and lag the competition.

The smaller Hep C drug players -- Achillion Pharmaceuticals ( ACHN), Inhibitex ( INHX), Idenix Pharmaceuticals ( IDIX) and Anadys ( ANDS) -- emerge from EASL under more pressure to find partners or acquirers. Hep C is rapidly evolving into a market similar to HIV where winners have multiple drugs to play with and losers are the single-drug companies sitting alone on the sidelines. Roche, J&J, Merck and Vertex should all be motivated to make deals in the coming year.

Thomas L. emails, "Can you explain why Optimer Pharmaceuticals ( OPTR) traded down after the positive FDA panel?"

Thomas is correct -- Tuesday's FDA panel was positive, with a 13-0 vote recommending the approval of fidaxomicin (now known as Dificid) for the treatment of clostridium difficile infection (CDI).

The stock traded off 6% to $12.99 Wednesday but was moving higher intraday Thursday so I wouldn't be too worried. Optimer shares ran up into Tuesday's panel because of the widely held expectation of a positive vote.

The only concern coming out of the advisory panel was the close debate over how best to describe Dificid's relapse benefit. This also contributed to Wednesday's selloff.

Optimer's proposed indication for Dificid was as a treatment for CDI and "prevention of recurrence." The panel, however, voted 6-7 against a broad recurrence claim. During the debate and discussion before and after the vote, the panel seemed to agree that the clinical data from the two phase III studies supported a label claim showing how patients treated with Dificid experienced significantly less CDI recurrence compared to vancomycin-treated patients after 30 days.

Dificid is going to be fine as long as some form of a 30-day recurrence benefit claim makes it into the FDA-approved label. Optimer CEO Pedro Lichtinger told me Tuesday night after the advisory panel that the company would be working with FDA to nail down the label language but that he was confident that it would include a description of Dificid's recurrence benefit.

FDA is expected to announce an approval decision for Dificid by May 30.

Also on Wednesday, Optimer announced an agreement to hire a hospital-based antibiotic sales force from Cubist Pharmaceuticals ( CBST) to help with the first two years of the Dificid commercial launch. This is a smart move. Cubist's drug reps have done well selling the antibiotic Cubicin, so Dificid should start strong out of the gate while Optimer works to build out its own sales force.

And who knows at this point, but the working relationship between Cubist and Optimer might one day lead to Cubist acquiring Optimer.

Optimer shares should move higher towards the mid to high teens as we get closer to the May 30 Dificid approval date. The biggest overhang or risk to the Dificid launch is the potential entry of generic vancocin to the CDI treatment market but predicting if or when that might happen is pretty much impossible.

Optimer's argument -- and it's a persuasive one -- is that doctors should use Dificid ahead of vancocin because of lower CDI recurrence. Dificid will be priced higher than Viropharma's ( VPHM) Vancocin (and certainly higher than a generic vancomycin) but long-term treatment costs of CDI with Dificid will be lower if patients don't relapse.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in 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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