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New hepatitis C drug OK’d

With FDA approval, Vertex brings potential blockbuster to market

By Robert Weisman
Globe Staff / May 24, 2011

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Federal regulators yesterday signed off on Vertex Pharmaceuticals Inc.’s drug for hepatitis C, setting up a multibillion-dollar competition between the Cambridge biotechnology company and rival Merck & Co. to treat a liver-ravaging virus that afflicts more than 3 million Americans.

The much-anticipated tablet will be sold under the brand name Incivek and should be in pharmacies across the country this week.

Food and Drug Administration officials said the dawn of the new generation of hepatitis C treatments is reminiscent of the agency’s clearance of a class of antiviral drugs to treat the HIV virus in the 1990s.

“It is truly an exciting time,’’ Dr. Debra Birnkrant, director of the FDA’s division of antiviral products, said yesterday.

Most patients live with hepatitis C for years before they are diagnosed, and doctors estimate as many as half the people with the virus are unaware they have it.

Barry Carragher, 48, a plumber from Hull, contracted hepatitis C from injecting drugs as a teenager and was cured by Incivek, in combination with other medicines, in a clinical trial two years ago at Beth Israel Deaconess Medical Center in Boston.

“I lived with it for 30 years,’’ said Carragher, who said he gave up drugs decades ago. “This is something you don’t only live with in your liver, but you live with it in the back of your mind.’’

Incivek (pronounced in-see-veck), will carry an average wholesale price of $49,200 for a 12-week regimen — higher than the price for Merck’s Victrelis, which ranges from $26,400 to $48,400, depending on the length of treatment.

Vertex said it will cover the $50 to $250 copayments for the majority of patients with private insurance. The company also made a donation to an independent group, called the Patient Access Network Foundation, to offset most copays for patients with government insurance such as Medicaid, and for those in Massachusetts, where businesses are not permitted to finance copays.

Vertex will provide the drug free of charge to uninsured people who earn less than $100,000 a year. “Most patients will incur no out-of-pocket costs,’’ said chief commercial officer Nancy J. Wysenski. “We want to make sure all patients can get Incivek regardless of cost.’’

Executives would not say how much Vertex is spending on its program to subsidize the cost of Incivek, though chief executive Matthew W. Emmens said it was “the most generous program I’ve ever seen’’ in the drug industry. The vast majority of Incivek revenues will come from health insurers and the government and are expected to make Vertex profitable for the first time.

Analysts believe Incivek will become the first new blockbuster drug brought to market by a Massachusetts company in nearly a decade. The last came in 2004 when Tysabri, Biogen Idec Inc.’s multiple sclerosis treatment, won FDA approval. To qualify as a blockbuster, a drug must generate more than $1 billion in annual sales.

Yesterday’s approval marks the culmination of 18 years of research, testing, and clinical trials. “Our researchers knocked down or climbed over many obstacles to get to this day,’’ Vertex’s chief scientific officer, Peter Mueller, told investors.

Incivek is the first drug developed from start to finish by Vertex in its 22-year history, during which it has drawn more than $4 billion in investments. Yesterday, there were celebrations and champagne toasts in the halls of Vertex’s buildings in Cambridgeport. “I had two people in my office this morning with tears of joy,’’ Emmens said. “There are people here who have been working on this drug for 15 years.

The drug will undoubtedly raise the company’s standing in the Boston area, and Wall Street anticipation of Incivek already has boosted its market value to $11.3 billion, the second highest among Massachusetts biotechnology companies, after Biogen Idec. Even as the broader financial markets tumbled yesterday, shares of Vertex climbed 81 cents to $55.81 on the Nasdaq exchange, a gain of nearly 1.5 percent.

Among other things, the FDA nod will enable Vertex to move forward with plans for a new headquarters on the South Boston Waterfront. Vertex agreed earlier this year to move its corporate offices to the Fan Pier development, subject to the FDA’s approval of its hepatitis C drug.

Vertex chief executive Emmens said his company is moving forward rapidly with other drug programs. It may be less than a year away from introducing a breakthrough treatment for cystic fibrosis — a chronic lung disease in children and young adults — and is also working on drugs to treat cancer, epilepsy, and influenza, he said. “We have a very thick and broad pipeline,’’ Emmens said.

But while Incivek will mark Vertex’s passage from a research organization to a fully commercialized company, it won’t have the hepatitis C market to itself. Drug giant Merck, based in Whitehouse Station, N.J., won FDA clearance for its treatment, Victrelis, on May 13.

Both are protease inhibitors, which act by blocking the enzyme that allows the hepatitis C virus to replicate. And both will be prescribed as part of a “triple drug therapy’’ that includes a pair of existing drugs, pegylated interferon and ribavirin, said Dr. Fredric D. Gordon, director of hepatology at Lahey Clinic in Burlington.

“These drugs represent a milestone,’’ Gordon said. “They are a tremendous advance in the treatment of hepatitis C. They will mean almost a doubling of the cure rate for the virus. We’ve been struggling for 15 years with treatments that are less than 50 percent effective.’’

In clinical trials, Incivek cured 79 percent of first-time patients with the hardest-to-treat form of the disease — in half the time as today’s drugs.

Analysts have projected Incivek will win the larger market share in the competition with Merck because clinical trials suggested it was more effective, but the drugs were not compared head to head.

The entire market could be huge, starting at $2 billion a year and potentially growing to $10 billion or more, analysts have estimated.

Merck’s formidable marketing arm will give it some advantages in the competition. Last week, it struck a partnership with the Genentech division of Swiss drug maker Roche AG to comarket Victrelis as part of a three-drug cocktail that includes Roche’s pegylated interferon.

Pamela Eisele, a Merck spokeswoman, would not discuss the new Vertex drug but said the new protease inhibitors represent a significant step forward.

“It’s great that Victrelis and other medicines are now available to help patients with hepatitis C,’’ she said. “Victrelis does provide an important new treatment option.’’

Robert Weisman can be reached at weisman@globe.com.