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HCV Fighters

August 3, 2005

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This is an article from Forbes. Again, the business side of this disease can provide quite a bit of information for us patients. The fact that Credit Suisse First Boston likes VX-950 is certainly a good sign.

Stock Focus
Hepatitis Fighters
Peter Kang, 08.03.05, 8:30 AM ET

NEW YORK - In the stock market, the biotechnology sector is one of the more speculative places to put your money. Standard & Poor's reports that of the 340 biotech companies traded on U.S. exchanges, only 14 are consistently profitable.

But if you want to take a biotech gamble, try smaller companies focused on developing antiviral treatments, particularly cures for liver diseases. Why? Market opportunity.

One such family of ailments, hepatitis B (HBV) and hepatitis C (HCV), infects more than 5 million Americans, according to the Centers for Disease Control and Prevention. Hepatitis is the leading cause of chronic liver disease, the tenth major cause of death in the U.S. Some health experts predict that the death rate from the more deadly hepatitis C virus may surpass that of HIV/AIDS by 2015.

Idenix Pharmaceuticals (nasdaq: IDIX - news - people ) has promising drug candidates for both HBV and HCV. The company also boasts the support of Swiss drug giant Novartis (nyse: NVS - news - people ), which is co-developing a compound called Telbivudine for HBV.

According to Mark Schoenebaum, a biotech analyst with Bear Stearns, shares of Idenix, which carved out a new all-time high yesterday, could climb even higher if Novartis opts to take a stake in NM-283, an HCV treatment developed by Idenix.

"We believe NM-283 Phase IIb data in hepatitis C will be the most important event for Idenix this year," Schoenebaum said in a June 22 report. He expects positive data for NM-283 to be released by Idenix in September. He also thinks Idenix, which recently announced positive Phase III clinical trial data for Telbivudine, could see an upside spark in shares on a potential Novartis opt-in for NM-283.

While Idenix shows a lot of promise, security analysts reporting to Thomson First Call don't expect the company to deliver profits until 2007.

Vertex Pharmaceuticals (nasdaq: VRTX - news - people ), another company for which profits are still elusive, has a potential blockbuster drug in its HCV drug VX-950, currently in early-stage development. Vertex shares rose 20% on May 10 after the company's Phase I results showed that VX-950 was well tolerated by patients and demonstrated "potent antiviral activity," according to a Vertex release.

In a June 2 research report, Credit Suisse First Boston analyst Mark Augustine wrote that VX-950 "is the most exciting small-molecule HCV antiviral drug in the clinic," and estimates peak annual sales of more than $1 billion. Augustine said a recent alliance forged by Novartis and Anadys Pharmaceuticals (nasdaq: ANDS - news - people ) bodes well for Vertex. The deal, potentially worth $570 million (with an upfront payment of $20 million and milestone payments of up to $550 million), indicates a willingness on big pharma's part to invest in companies with early-stage hepatitis drugs, according to Augustine.

Investors might want to look at Valeant Pharmaceuticals (nyse: VRX - news - people ) (formerly known as ICN Pharmaceuticals), whose stock price has dropped 26% from a December high. In addition to tackling hepatitis, Valeant sells drugs for treating neurological and dermatological disorders and other infectious diseases. Its shares sell for 46 times their consensus 2006 forecast.

Six Hepatitis Fighters

Anadys Pharmaceuticals (nasdaq: ANDS )

Idenix Pharmaceuticals (nasdaq: IDIX)

Rigel Pharmaceuticals (nasdaq: RIGL)

Valeant Pharmaceuticals International (nyse: VRX)

Vertex Pharmaceuticals (nasdaq: VRTX )

ViroPharma (nasdaq: VPHM - news - people )

Posted by Ralph at August 3, 2005 7:56 PM