Biotech Stock Mailbag: Hep C Stocks to Watch

Investors should think about the evolving Hep C drug market like a buddy system. Everyone, meaning every company developing a new Hep C drug, needs a buddy, a partner, a wing man. Partnering is essential because in five or 10 years, maybe sooner, doctors will be treating Hep C patients with various combinations of drugs — i.e. drug cocktails — in many of the same ways that doctors treat HIV patients today.

The current standard of care for treating Hep C is a 48-week, two-drug regimen consisting of long-acting interferon (either Roche’s Pegasys or Merck’s(MRK) PEG-Intron) plus the generic medicine ribavirin.

If Vertex and/or Merck are successful in getting their respective direct-acting antiviral drugs approved next year, a third drug will be added to the Hep C treatment cocktail. If that add-on drug is Vertex’s telaprevir, for instance, newly-treated Hep C patients will take telaprevir plus interferon-ribavirin for 12 weeks, followed by another 12 weeks of interferon and ribavirin. Total treatment time, just 24 weeks or six months. Based on what we know today about telaprevir, cure rates of 75% will be achieved compared to about 40% today with standard of care alone.

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