Another Hepatitis Protease Inhibitor: Vertex drug could trump everyone else

Vertex pipeline drug for hepatitis could top $5 billion: analyst

-- Vertex Pharmaceuticals, a small biotech, and its marketing partner Johnson & Johnson stand to gain billions of dollars in annual sales if their experimental hepatitis drug is successful, analysts say.

Vertex (down $1.06 to $35.71, Charts), a biotech based in Cambridge, Mass., is experimenting with a potential blockbuster hepatitis C treatment called VX-950. If tests are successful, the drug could enter the American market by 2009, reaching peak U.S. annual sales of $3 billion by 2013, said Ding Ding, analyst for Maxim Group. Most of the U.S. sales would go to Vertex.

In addition, overseas annual sales would peak at $2.4 billion by 2015, said Ding. Most of the non-U.S. sales would go to Johnson & Johnson (up $1.16 to $66.09, Charts), which would market the drug overseas.

Hepatitis C is a blood-borne viral infection that damages the liver and can result in chronic infection and disease, according to the National Institutes of Health. It has infected three million Americans and 170 million people worldwide.

"This is probably the most efficacious anti-Hepatitis C oral compound that will come to market," said Ding. "VX-950 is the one with the most promise so far."

Geoff Porges, analyst for Sanford C. Bernstein, also projects blockbuster sales for VX-950, peaking at about $2.7 billion in annual revenue by 2011. That includes $1.8 billion in U.S. sales, with most of that going to Vertex, and $840 million in non-U.S., with the lion's share going to Johnson & Johnson.

Les Funtleyder, analyst for Miller Tabak, said that VX-950 and other hepatitis drugs could be well-received in the emerging markets of Asia, where hepatitis is a more pervasive health problem. In the coming years, individuals in Asia will have more personal income to spend on healthcare, and drugs like VX-950 could get a sales boost, said Funtleyder.

As in previous HCV drugs, its a viral protease inhibitor that stops viral replication. HUGE drug targets.