Vertex Eyes Telaprevir Approval - Analyst Blog

Vertex Pharmaceuticals Inc. (VRTX) recently announced the completion of the submission of a rolling new drug application (NDA) to the US Food and Drug Administration (FDA) for the company's lead pipeline candidate, telaprevir. Telaprevir is being developed for the treatment of hepatitis C virus or HCV, for both treatment-naïve and treatment-failed patients.

The filing was based on results from three late-stage trials – ADVANCE, ILLUMINATE and REALIZE. The safety and tolerability profile of telaprevir was consistent across all the studies.

Vertex Pharma has requested the regulatory body to grant priority review status to telaprevir. The priority review status would bring down the time taken by the FDA to review the application of the drug to six months from ten months.

Vertex Pharma has joined hands with Johnson & Johnson (JNJ) and Mitsubishi Tanabe Pharma for telaprevir. While Johnson & Johnson will be responsible for the commercialization of the drug outside North America and the Far East, Mitsubishi Pharma will market it in Japan and certain areas of the Far East.

HCV infection causes a liver inflammation called chronic hepatitis. The condition can deteriorate and lead to scarring of the liver, called fibrosis, or more advanced scarring, called cirrhosis. Further complications including liver failure or liver cancer may develop as a result of cirrhosis. The incidence of the disease is on the rise.

Neutral on Vertex Pharma

We currently have a Neutral recommendation on Vertex Pharma, which is supported by a Zacks #3 Rank (short-term Hold rating). With Vertex Pharma banking on telaprevir for growth, we believe that any delay in the approval of the candidate would weigh heavily on the stock. Moreover, we note that the HCV market is highly competitive with several small and large pharmaceutical companies working on clinical candidates.

The biggest potential competitor for telaprevir could be Merck & Co.'s (MRK) boceprevir, a similar protease inhibitor molecule. Merck plans to complete the regulatory filings of the drug in the US and Europe in 2010. Meanwhile, companies like Boehringer Ingelheim, Gilead Sciences Inc. (GILD) and Roche Holdings Ltd. (RHHBY), all have pipeline candidates for the treatment of HCV.