Vertex Sells Royalty Rights to HIV Drugs, Bets on Hepatitis C
Vertex Pharmaceuticals is doubling down on its hepatitis C drug program. The Cambridge, MA-based company sold the rights to its royalty stream on two HIV drugs for a one-time payment of $160 million in cash, which it will pump into its hepatitis C program. The HIV meds, Lexiva and Agenerase (both marketed by GlaxoSmithKline), are “non-core” financial assets, according to Vertex (NASDAQ: VRTX).
Vertex, with no marketed products of its own, is spending plenty of cash to get one for hepatitis C. The company expects to lose $380 to $410 million this year, after starting the year with $468 million of cash in the bank. That may sound like a lot of money to burn, but Wall Street analysts expect the drug to count Vertex’s sales in the billions of dollars if trials of its lead experimental drug, telaprevir, succeed.
The company took a step toward that goal in March, when it started a final-stage clinical trial called Advance, which is enrolling more than 1,000 patients to demonstrate effectiveness of the drug.
The treatment, an oral pill, is designed to be more effective and more convenient than standard therapies. It is given for 24 weeks, instead of the nearly year-long course of therapy required on the conventional ribavirin and pegylated-interferon combination. Earlier, smaller studies showed telaprevir could cure almost two-thirds of hepatitis C patients, almost double the standard rate. The real proof of whether it’s really that big of an advance will be in the results of the Advance trial.