Vertex Tops Merck in Early Hep C Drug Launch

By Adam Feuerstein 06/28/11 - 09:01 AM EDT

CAMBRIDGE, Mass. (TheStreet) --Vertex Pharmaceuticals'(VRTX_) new hepatitis C drug Incivek is outselling Victrelis, a rival drug from Merck(MRK_), in the early weeks of their respective commercial launches.

U.S. regulators approved Incivek and Victrelis in May just 10 days apart, which means Vertex and Merck began marketing the competing hepatitis C drugs essentially at the same time. Investors rarely get to watch companies launch two similar drugs simultaneously -- particular two drugs tapping into a multi-billion dollar market like hepatitis C -- so investors are paying close attention to the early prescriptions written for Incivek and Victrelis.

So far, Vertex is beating Merck, which means the marketing battle between Incivek and Victrelis is playing out largely as expected.

For the week ended June 17 (the most current data available), doctors wrote 460 prescriptions for Vertex's Incivek compared to 160 prescriptions written for Merck's Victrelis, according to weekly prescription data compiled by IMS Health. Weekly IMS drug prescription data tracks retail pharmacy, mail order and long-term care distribution channels.

That puts Incivek's market share at 75% compared to Victrelis' 25% with about five weeks of prescription data available. Even before the two drugs launched, investors were expecting Incivek to garner more prescriptions, with some analysts forecasting a 75% market share split for Incivek at peak.

The current consensus 2011 sales forecast for Incivek is $490 million, according to the sell-side analysts who cover Vertex. Buyside investors are expecting more. A survey of 188 investors in early June yielded a 2011 consensus sales estimate of $568 million, including $43 million in the second quarter that ends June 30, according to ISI Group biotech analyst Mark Schoenebaum, who conducted the survey.

Bank of America Merrill Lynch, through IMS, is tracking daily prescriptions of Incivek for those investor clients who are totally obsessed with the launch of the new hepatitis C drugs. Those daily IMS reports, culled from prescriptions reported by retail pharmacies only, also show Incivek topping Victrelis to date.

Doctors are showing a preference for Incivek over Victrelis so far, but that advantage isn't yet translating into a higher Vertex stock price. At Monday's close of $48.73, Vertex is down 15% from May 23, the day Incivek was approved, and down 21% from the stock's 52-week high reached on May 12.

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