CAMBRIDGE, Mass. ( TheStreet) -- Vertex Pharmaceuticals ( VRTX) appears to have a late but competitive entry in the race to develop a pill for rheumatoid arthritis, a $12 billion treatment market now dominated by injected drugs.

Results from a phase IIa study announced Monday demonstrated that Vertex's drug VX-509 significantly improved the signs and symptoms of the rheumatoid arthritis compared to a placebo after 12 weeks of treatment. Based on the results from this study, Vertex said it will move VX-509 into a larger six-month phase IIb study.

Investors are keen to see whether Vertex has another potential blockbuster drug in its pipeline, following the launch this spring of the hepatitis C drug Incivek. But VX-509 is already playing catch up behind three competing and more advanced rheumatoid arthritis pills being developed separately by Pfizer ( PFE) and partnerships between Incyte ( INCY) and Eli Lilly ( LLY) and Rigel Pharmaceuticals ( RIGL) and AstraZeneca ( AZN).

The convenience of treating painful and swollen joints with a pill has the potential to be a very attractive option for the 1.5 million U.S. rheumatoid arthritis patients who now rely on regular injections to treat their chronic disease. A pill that has comparable efficacy and safety to injections could generate billions of dollars in peak sales.

VX-509 belongs to a class of oral drugs that work by blocking a family of enzymes known as Janus kinases, or JAK, known to cause inflammation. Vertex designed VX-509 to be a more selective inhibitor of JAK than similar drugs from Pfizer and Incyte/Lilly, which may translate into VX-509 improving symptoms of rheumatoid arthritis with fewer side effects, the company says.

The Pfizer drug, tofacitinib, is already through phase III studies and the company is expected to seek U.S. approval by the end of the year.

The results from VX-509's phase IIa study announced Monday are the first look at the drug's clinical profile in patients. The study enrolled 204 patients with moderate to severe arthritis that failed to respond to at least one prior therapy. The study includes four different doses of VX-509, each given twice a day plus a placebo arm for comparison.

Efficacy of VX-509 was measured after 12 weeks of treatment using a so-called ACR20 score, which is the percentage of patients who achieve a minimum 20% improvement in symptoms. The change from baseline in improvement in DAS28, a measure of rheumatoid arthritis disease activity, is also being assessed in the VX-509 study.

The two highest doses of VX-509 tested yielded ACR20 scores of 65% and 66%, respectively, compared to 29% of patients treated with a placebo. The benefit favoring VX-509 was statistically significant.

In addition, 35% and 37% of patients treated with the two highest dose levels of VX-509 achieved remission of their disease as measured by DAS28 score improvements compared to 7% of placebo-treated patients. Again, this result was statistically significant.

On the safety side, 5% of VX-509-treated patients reported serious adverse events compared to 3% of placebo-treated patients, with infections being the most common reported side effect. VX-509 caused "low level" increases in blood cholesterol levels of patients although detailed data was not provided by Vertex. The drug was also associated with some increases in liver enzyme levels in 4% of patients, although none were classified as serious adverse events.

Two patients treated with VX-509 died during the study, one from pneumonia that was deemed possibly related to VX-509 given the drug's potential association with an increased risk of infection.

Comparing experimental drugs across different clinical trials is fraught with peril but with that caveat, Pfizer's oral JAK inhibitor tofacitinib yielded ACR20 scores in the 50% to 75% range after 12 weeks of treatment in a phase II study announced in 2009. DAS28 remission scores from the same study of tofacitinib ranged from 24% to 40%, according to clinical data compiled by BioMedTracker.

Safety concerns have dogged tofacitinib's development, including reports of decreased white blood cells counts, which can lead to an increased risk for infections, and elevated cholesterol levels -- a potentially troubling heart safety signal. In a phase III study, four tofacitinib-treated patients died, although only one death was deemed linked to the drug, according to study investigators.

Vertex's VX-509 did not cause a decrease in white blood cell counts compared to placebo, Vertex said Monday.

Incyte and Lilly's oral JAK inhibitor, LY3009104 (dosed once daily), demonstrated ACR20 scores in the 50% range measured after 12 weeks of treatment in a 2010 phase II study, according to BioMedTracker. Lilly and Incyte are conducting additional phase II studies of LY3009104, with results expected next year.

Rigel and AztraZeneca's rheumatoid arthritis pill, known as fostamatinib, works by blocking a different inflammation-related enzyme and is currently in phase III studies.

The current rheumatoid arthritis treatment market is dominated by three injectable drugs: Abbott Labs' ( ABT) Humira, Amgen's ( AMGN) Enbrel, and Johnson & Johnson's ( JNJ) Remicade. Each of these drugs works by blocking a protein known as tumor necrosis factor, of TNF.

Vertex shares closed Friday at $44.59.

--Written by Adam Feuerstein in Boston.

>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.

>To submit a news tip, send an email to: tips@thestreet.com.
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.