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Hep C pill race report 2012: Gilead, others rush toward pharma gold

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Vertex Pharmaceuticals ($VRTX) radically improved the treatment of hepatitis C with its protease inhibitor Incivek, which fast became a blockbuster success after the FDA stamped an approval on the drug in May 2011. Investors and physicians cheered, thousands of patients embraced the treatment, and Vertex's sales skyrocketed.

Temporarily. Early this month, Cambridge, MA-based Vertex reported financial results that showed a steep decline in sales of Incivek, down from $419.6 million in the third quarter of 2011 to $254.3 million in the same period this year.

Blame much of the 39% drop in sales of the drug on at least a couple of related factors. Firstly, Incivek is approved only for use with injected interferon, which causes a range of nasty and flulike side effects. Secondly, physicians and patients appear to be waiting for a new generation of oral antivirals that offer the promise of wiping out the virus relatively quickly without requiring interferon injections.

This wasn't news to Vertex. Along with a bevy of competitors, the pharma company has hurried to advance interferon-sparing treatments for a while. If the all-oral therapies now in development hit the market as expected within the next couple of years, sales of interferon-based treatments are in big trouble. Vertex knows this. Merck ($MRK), which markets the rival hep C drug Victrelis, knows this. Both companies are hustling to develop all-oral approaches to fighting the disease.

"Obviously, we're moving as fast as we possibly can," Dr. Robert Kauffman, Vertex's chief medical officer, said in an interview with FierceBiotech. He also noted: "The news is that the field is changing rapidly; all-oral regimens look to be on the horizon."

The evolution of hepatitis C treatment threatens to leave today's dominant companies with fossilized offerings. Vertex and Merck have the state-of-the-art approved drugs against the virus, but both companies are chasing after Gilead Sciences ($GILD), Abbott Laboratories ($ABT) and others with programs that could be the first to win market approval with pill-only options.  

There's no cozy position in the hep C race, however. The all-oral cocktails are largely unproven and in need of confirmation in fully baked pivotal studies, and that keeps the contest wide open for a number of contenders, Vertex included.