Valeant Pharmaceuticals International is willing to take one more stab at Viramidine, its disappointing hepatitis C drug.
The Costa Mesa drug maker said it plans to do an interim clinical trial to see if Viramidine might be effective at higher doses.
The drug, Valeant’s hopeful to replace fading flagship ribavirin, came up short of expectations in two recent late-stage clinical trials.
Valeant said last week that a second third-stage study found that Viramidine still was not as effective as ribavirin, the standard treatment for the liver disease.
Viramidine failed to meet effectiveness goals in an earlier third-phase study, which was released in March.
A test of 962 patients showed only 40% of those who received Viramidine responded to the drug, compared to 55% of those who received ribavirin.
Both ribavirin and Viramidine are given with pegylated interferon, an antiviral protein.
One upside for Valeant: The latest test again showed that Viramidine patients were less likely to develop anemia during the treatment.
Only 6% of the Viramidine patients showed anemia symptoms, compared to 22% of the patients who received the ribavirin cocktail.
“These analyses, coupled with feedback from the medical community that there will continue to be a strong need for ribavirin or ribavirin analogues in the treatment of hepatitis C, indicate that further clinical testing is prudent,” Chief Executive Timothy Tyson said.
Having an interim trial should provide Valeant with what Tyson called “sufficient information at little relative cost and time” about dosage.
The test also should provide Valeant with information to “make a go/no-go decision,” he said.
Valeant’s pinned a lot of hopes on Viramidine as a replacement for ribavirin, which has seen its revenue drop as generic competitors hit the market.
Wall Street brushed off the latest trial news, likely already conditioned by the earlier Viramidine results.
Viramidine’s had its doubters on Wall Street.
Lazard Capital Markets downgraded the drug maker from a buy to hold after the Viramidine news broke. The brokerage estimates that research and development spending on the drug in 2008 would be halved to $15 million.
Others are harsher.
“In our opinion, this is a failure and the drug is dead,” said Andrew McDonald, an analyst with ThinkEquity Partners LLC, a San Francisco-based investment bank.
Earlier this year, Valeant made a move some might see as a hedge.
In January, it paid $113.5 million to buy Infergen, a hepatitis C drug from InterMune Inc. of Northern California.
Valeant looked to Infergen “to have an immediate sales impact and provide us with a valuable addition to one of our core therapeutic areas,” Tyson said when the drug maker closed the deal.
Amgen Inc., the Thousand Oaks-based biotechnology company, originally developed Infergen, which is used on patients who don’t respond to ribavirin and pegylated interferon.
Valeant’s Viramidine challenges come at a tough time for the drug maker.
Last week, the company said the Securities and Exchange Commission is looking into its stock sales around the time of the earlier Viramidine results. Regulators also are looking into stock option grants.
And the SEC wants to know about Valeant’s efforts to reclaim a $33 million bonus awarded four years ago to Milan Panic, the drug maker’s founder and former chief executive.
Last month, Valeant said it had settled litigation over the issue with Panic, but had to go back to court to try and get “timely payment,” and what it called breaches of other settlement conditions.
Meanwhile, Panic is waging his own battle against Valeant. He’s filed a suit alleging company directors intentionally drove down Valeant’s shares with false claims about performance.
That allowed them to profit off stock options granted at low prices, the suit charges. Panic also has threatened to take his charges to the SEC.
