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Pharmasset Again Expands Hepatitis C Drug Study

NEW YORK, Oct. 10, 2011 (AP) - Shares of Pharmasset Inc. jumped Monday after the company expanded a clinical trial of its experimental hepatitis C drug to include new hard-to-treat patients. By expanding the trial, the company gave Wall Street another indication the drug works.

THE SPARK: Pharmasset said it will test the drug, which is designated PSI-7977, on two new groups of patients. It will test it on patients with hepatitis C genotype 1 who have not previously been treated. It will also test a combination of PSI-7977 and ribavirin, which is an older drug used in hepatitis C treatment, on patients with genotype 2 or genotype 3 who have not been helped by other therapy regimens. Those patients are called "null responders."

The company also said it will alter another section of the study, removing interferon from a treatment regimen that also includes PSI-7977 and ribavirin. Pharmasset said it will report results from some portions of the trial on Nov. 6, at meeting in San Francisco of the American Association for the Study of Liver Diseases.

THE BIG PICTURE: When a drug maker expands a clinical trial, it is seen as a strong indication that its drug is working on the first groups of patients. This is the second time the Princeton, N.J., company has expanded a study of PSI-7977. It started by testing the drug for 12 weeks in combination with ribavirin and interferon. In June, it said it would test PSI-7977 by itself on some patients, and said it would study the drug to see if it could help patients after eight weeks instead of 12.

Pharmasset is also studying PSI-7977 as part of three different regimens: one with with a Bristol-Myers Squibb Co. drug candidate, another with a Johnson & Johnson drug candidate, and a third with one of its own hepatitis C drug candidates, PSI-938.

THE ANALYSIS: Citi Investment Research analyst Yaron Werber said the addition of null responders is "very encouraging as null responders are very difficult to treat." He added that the removal of interferon from one arm of the study indicates that other interferon-free PSI-7977 regimens are working.

Werber maintained a "Top Pick" rating on Pharmasset shares, and said he still believes PSI-7977 could reach the market in late 2014. Weber said in August that he expects PSI-7977 to become part of a standard treatment regimen for hepatitis C.

SHARE ACTION: Shares of Pharmasset rose $5.34, or 6.6 percent, to $86.08 in afternoon trading. Earlier in the day, the stock set an all-time high of $87.29. Pharmasset stock has quadrupled in value in 2011, and Werber expects the stock to rise to $106 per share.
 

Posted: October 2011


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