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Vertex (VRTX) is a company that is about to bring on one of the largest breakthrough medications for Hepatitis C in a decade. This medication will be very successful and millions of patients will benefit. The average cost of this medication has been thought to be nearly $70,000 per year. If that is the case, this is a multibillion dollar product.
Nearly 4 million people are infected with the Hepatitis C virus. Current therapies are limited since they do not target the virus itself. Protease inhibitors do target the virus. Vertex (VRTX) has telaprevir that is nearly 80 percent effective in keeping the virus away.
There are future medications to come like the new compounds by Pharmasset (VRUS). But their early data is just that! Early data. They are making a lot of unneccessary and unsubstantiated hoopla about the results of 16 patients with their treatments in a phase 2 abstract. Mind you investors have been running toward VRUS, but lets be practical.
Even if Pharmassett has a medication that is better than telaprevir, it will take a minimum of two years before it hits market. First the current study has to be completed. Second a phase 3 study has to be done. Resistance and side effects to be determined. Each of these will take a minimum of 9 months since no researcher will believe the data until the SVR (a 6 months post treatment endpoint is determined). Finally, there is the 6 months of FDA review.
Thus if a patient has Hepatitis C, a virus that can kill you, would you wait 2 more years for a possible drug or take the one now that works 80% of the time. Obviously, take the one now that in 24 weeks can help you now.
Thus, our opinion, forget Pharmassett's (VRUS) new compounds for two years. Short the Pharmassett stock. By the time it gets its product out, Vertex (VRTX) will have regular customers made a multibillion dollars in sales! Invest if you can in a product with proven data and long term follow up. Invest in Vertex (VRTX)
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Chicago, IL
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