In one of the worst kept secrets of the year, new data shows that Pharmasset's combo oral approach to hepatitis C triggered the complete elimination of the virus in 15 of 16 patients after only 14 days of treatment. And the startling results, which were supposed to be kept under wraps in a blanket embargo lowered by the European Association for the Study of the Liver, spurred a quick spike in Pharmasset shares as word of the outcome spread swiftly among investors.
As Adam Feuerstein at TheStreet notes, this is the best such early-stage data released on an oral drug for hepatitis C. And the PSI-938 and PSI-7977 one-two punch eliminates the need for interferon, which is linked to a number of side effects among patients. That's the kind of news investors like to hear about early on, and the data--which is easily available online--spurred an increase of more than 32 percent in Pharmasset shares ($VRUS) over the first two days of the week.
Quoting analysts at BMO Capital Markets, Bloomberg notes that Pharmasset's data indicates it may be on track to eventually gain an approval for a new hepatitis C therapy that will be able to compete with Vertex, which is widely expected to gain approval for telaprevir in the spring. Jason Zhang says that a combination of telaprevir and VX-222 didn't generate data that was good enough to follow up in additional patient studies, leaving Vertex open to a later challenge if Pharmasset can duplicate these early results in larger trials.
"The hepatitis C treatment landscape subsequent to the initial phase of telaprevir dominance is tilting away from Vertex to companies such as Pharmasset that have potent combinations," Zhang wrote. Vertex shares slid about five percent.
"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," noted Leerink Swann analyst Howard Liang.