Ahead of the Bell: Vertex climbs on study results

NEW YORK

Vertex Pharmaceuticals Inc. shares climbed in premarket trading Wednesday after the company said its hepatitis C drug candidate met its main goal in a late-stage clinical trial.

Analysts said the results were strong, and that telaprevir stacks up well against similar hepatitis C drugs being developed by other companies. Vertex shares rose $3.50, or 10.3 percent, to $37.45 in premarket trading. The stock closed at $33.95 Tuesday and has ranged from $28.15 to $44.24 over the last year.

On Tuesday, Vertex said patients who were treated with a regimen including telaprevir were more likely to be cured than patients who were treated with older drugs. The Cambridge, Mass., company said 75 percent of patients who took telaprevir for 12 weeks had a sustained viral response.

William Blair & Co. analyst John Sonnier said the results were strong and similar to previous studies. Vertex plans to file for marketing approval of telaprevir later this year, and Sonnier thinks it will be approved before competing drugs like Merck and Co.'s boceprevir. That will be a big help to Vertex, he wrote.

Sonnier said 300,000 people in the U.S. have hepatitis C, a virus that can cause liver damage. He estimated the total market for hepatitis C drugs at $9 billion.

Oppenheimer analyst Brian Abrahams said annual worldwide sales of telaprevir will reach about $2.5 billion by 2013. He believes it will be difficult for boceprevir or other drugs to beat the results from the Tuesday's study, and said previous studies of telaprevir have returned similar results.

Abrahams said telaprevir's side effects -- which can include rash, itching, anemia, and nausea -- could be an issue, but few patients left the trial.

Both Sonnier and Abrahams kept "Outperform" ratings on Vertex shares.