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Vertex records loss as Incivek sales lag

Company says it will partner with J&J, GSK to test interferon-free drugs
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Superstorm Sandy seemed to be an ill wind blowing Vertex Pharmaceuticals' ($VRTX) way. The natural disaster convinced Vertex to delay its earnings report several days and when it did, it was only to report a net loss as sales of its hepatitis C drug Incivek fell precipitously. But collaborations with GlaxoSmithKline ($GSK) and Johnson & Johnson ($JNJ) to test combos of its next generation interferon-free hep C drugs saved the day for the company.

Vertex reported a $57.5 million third quarter loss amounting to 27 cents a share, compared with a $221.1 million, $1.02 per share profit in the same quarter a year ago, Reuters reported. Revenue for the quarter was $336 million, short of analyst estimates of $377.1 million.

Incivek was approved by FDA last year with great expectations since it cut short treatment rates while doubling cure rates compared to older treatments. The company said it shot to $1 billion in sales faster than any drug before it. But it must be taken along with interferon, which causes nasty side effects, leading some patients to wait for the expected approval of several interferon-free treatments, and quickly undermining sales of Incivek.

Vertex is working in the arena as well but in September it dumped one of a pair of interferon-free drugs it licensed from Alios BioPharma. It said it was moving forward quickly to a mid-stage study on the second. But it also said it would like to find a partner for the project. Yesterday it said it would work with GlaxoSmithKline and Johnson & Johnson on a variety of combos of their hep C drugs with its own next-generation hepatitis C medicines. That boosted investor outlook since combos of interferon-free hep C drugs are considered the best treatment and developing the drugs is proving difficult. 

Bristol-Myers Squibb's ($BMY) $2.5 billion acquisition of Inhibitex's lead drug ended in disaster, with one patient from a trial dead and several others temporarily hospitalized. Idenix has had its efforts delayed while regulators consider the safety of its trials. But Gilead ($GILD), Abbott ($ABT) and Achillion ($ACHN) are all hard at work on their own candidates.

"We are focused on the development of new all-oral treatments for hepatitis C that have the potential to provide a high cure rate with only 12 weeks of treatment, and we look forward to the start of this study with GSK," Robert Kauffman, Vertex's chief medical officer, said yesterday.

- read the Reuters story

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