In the multi-year buildup to the near simultaneous FDA approval and U.S. launch of competing protease inhibitors for hepatitis C, market analysts typically projected that Vertex Pharmaceuticals' Incivek (telaprevir) would outsell Merck & Co.' s Victrelis (boceprevir) on the basis of better cure rates in clinical trials and shorter duration of therapy for many patients.

Even the most jaded observer, however, had to be somewhat surprised by the substantial disparity in third-quarter sales totals for the two drugs, as Incivek posted net sales of $420 million for the quarter while Victrelis staggered home with just $31 million in sales.

Merck's Victrelis obtained FDA approval on May 13 (Also see "Merck To Ship Hepatitis C Drug Victrelis To Pharmacies Within A Week" - Pink Sheet, 13 May, 2011.), with the agency then giving its okay to Vertex's Incivek on May 23 (Also see "Vertex's Next Steps Closely Watched Following Merck-Roche Deal On Victrelis" - Pink Sheet, 23 May, 2011.). Both drugs launched that same month, with Vertex taking a sales lead out of the gate when second-quarter data were unveiled despite a marketing alliance between Merck and Roche (Also see "Vertex Takes Early Lead In HCV Protease Inhibitor Sales" - Pink Sheet, 29 July, 2011.).

For Cambridge, Mass.-based Vertex, the quick ascent of its first marketed product meant that the company turned a profit during Incivek's first full quarter on the market. Vertex reported net income of $221 million for the third quarter, with CEO Matthew Emmens stressing a plan to become a diversified pharma with drugs in several indications, including HCV, cystic fibrosis, rheumatoid arthritis, epilepsy and influenza.

"Early Incivek revenues are impressive, and we have only just begun to treat the many people living with hepatitis C," he said during an investor call Oct. 27. "Vertex is more than just Incivek. We have a diverse and robust pipeline of eight different medicines in development."

To that end, Vertex filed an NDA for what it calls the first potentially disease-modifying agent in CF, Kalydeco (VX-770, ivacaftor), earlier this month. It has requested a six-month priority review (Also see "Vertex's Cystic Fibrosis Drug Kalydeco Could See Speedy Review" - Pink Sheet, 19 October, 2011.).

Incivek Holds Better Than 3-to-1 Edge In Patients Treated

Several bits of data reflect the wide disparity in market performance between Incivek and Victrelis. Notably, about 17,000 HCV patients have begun treatment with Incivek, while about 5,000 patients have started Victrelis therapy, Merck stated on its Oct. 28 earnings call.

Merck reported a strong quarter overall, led by healthy sales growth for diabetes drug Januvia/Janumet (sitagliptin), quadrivalent human papillomavirus vaccine Gardasil and rotavirus vaccine Rotateq, as well as its animal health division. But Executive VP and President Global Human Health Adam Schechter attempted to put the most optimistic face on the Victrelis story as well.

Citing the adverse effect of decreases in U.S. wholesaler inventory levels of the drug, Schechter noted a total Rx rate of 25% reported by IMS Health and argued that Victrelis' U.S. market share probably is closer to 30% due to its use in federal government programs, such as VA health care and Medicaid.

"We have seen TRx share grow in seven out of the last 10 weeks," Schechter said. "In addition, TRx volume has shown strong growth of about 30% in the rolling four weeks. Given the Victrelis duration of therapy, we expect dollar share to more closely match patients share and build over time."

Schechter noted that Victrelis is the only protease inhibitor for HCV listed on the VA formulary - with 130,000 patients, VA is the largest single health care provider for HCV patients in the U.S. Sales in the VA system are not captured in IMS data. However, he conceded, VA doctors also can prescribe Incivek for their patients, but under a more complicated, paperwork-intensive process.

In all, Victrelis has launched in 10 markets including Brazil, Canada and major EU nations. Meanwhile, Vertex also is looking to add significant ex-U.S. sales as partners Janssen Pharmaceutica in Europe and Mitsubishi Tanabe Pharma in Japan have obtained regulatory approval and launched the drug. Telaprevir is available in the U.K., Germany, France and Sweden as Incivo, and in Japan as Telavic.

Vertex Executive VP and Chief Commercial Officer Nancy Wysenski noted that Incivek is being well-received by U.S. payors. The drug is available on formulary in health care plans representing more than 180 million covered lives in the U.S. "That means that more than half of the population of the U.S. now has approved access to Incivek, post formulary review," she said.

Incivek also is winning over so-called "warehoused" HCV patients who avoided prior treatment due the previous standard of care's 48-week course of therapy and the poor side effect profile of one of the drugs, pegylated interferon. Oral ribavirin is the other half of the prior SOC. Vertex research shows that between 60% and 70% of Incivek prescriptions so far have been written for patients new to treatment, Wysenski said.

"Consistent with the specialist-driven nature of the hepatitis C market, adoption of Incivek is highest among gastroenterologists, hepatologists and infectious disease specialists," Wysenski added. "We are also seeing a number of additional prescribers who had not recently been prescribing pegylated interferon and ribavirin. This is another encouraging sign of acceptance and broadening of the prescriber base."

Incivek Mostly Meeting Wall Street's High Expectations

Baird Equity Research analyst Thomas Russo, in an Oct. 28 note, said Vertex faced high expectations with the launch of Incivek, but so far is exceeding them.

"Vertex showed weekly Incivek net revenues of about $42 million-$43 million thus far in October," he wrote. "This implies a $550 million-plus number for Q4 without any growth and taking a $2.2 billion run rate into 2012. Pre-existing consensus U.S. sales for 2012 was $2.06 billion and so should read higher."

Bernstein Research analyst Geoffrey Porges noted that one Wall Street concern about Incivek has been conflicting reports of slowing sales growth of late.

"Incivek may or may not become the best product launch in industry history ... Vertex suggested to investors that it did not see a slowdown in September and that patient demand remained robust through the most recent weeks," he wrote Oct. 28.

Porges, who continues to rate the stock "outperform," pointed out that Vertex revealed weekly run rates for Incivek of $20 million in July, $33 million in August and about $42 million in September. "Their October data confirmed the impression from the IMS data that there has been only a modest increase in the weekly run rate over the first three weeks of October to about $44 million," he said.

A somewhat dissenting view was offered by Cannacord/Genuity analyst George Farmer, who maintained a "hold" rating on Vertex stock in an Oct. 28 note "on signals that Incivek launch momentum may be waning and on high out-year competitive threats."

-Joseph Haas (j.haas@elsevier.com)

Vertex Out To Significant Early Lead In HCV Protease Inhibitor Competition With Merck

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