BOSTON ( TheStreet) -- Abbott ( ABT) chats up its own hepatitis C drugs Friday and Pharmasset ( VRUS) shares tank.

Treatment with a regimen of three oral medicines for 12 weeks cured nine of 10 hepatitis C patients, according to interim results from an ongoing phase II study released by Abbott this morning at an investor meeting.

With these new data, Abbott believes it can be a serious player in the race to develop the next wave of hepatitis C therapies that do away with injectable interferon in favor of convenient and potent oral drugs. New drugs from Vertex Pharmaceuticals ( VRTX) and Merck ( MRK) have drastically improved hepatitis C cure rates since launching this spring, but both drugs still require the use of injectable inteferons.

Pharmasset has ridden this same strategy to a $6 billion valuation and the best performance by a biotech stock of the year. But the stock shed $11.81, or 15%, to $67.59 Friday on fears -- perhaps overblown -- that Abbott puts a crimp in the company's plans.

Abbott shares were flat at 53.75.

Abbott is taking a three-drug approach to treating hepatitis C, but Pharmasset has the potential to do the same with two drugs. Furthermore, one of the three drugs in the Abbott regimen, the protease inhibitor ABT450, requires the use of a drug booster to maintain adequate blood levels. Abbott said little Friday about the tolerability or safety of its hepatitis C regimen.

Both Abbott and Pharmasset have a lot more clinical work to perform before either of their respective Hep C therapies proves to be the next big cure. But the big sell off in Pharmasset Friday is a warning sign that the company's momentum brings with it big expectations. Investors aren't going to tolerate well any hiccup or emergence of a strong competitive threat.

Pharmasset will be presenting new data on its hepatitis C drugs next month at the American Association for the Study of Liver Disease annual meeting. Abbott says it will present more data on its hepatitis C regimen at a medical meeting next spring.

--Written by Adam Feuerstein in Boston.

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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.