(Corrects to add dropped word in company name in the first paragraph)
By Jennifer Robin Raj
BANGALORE, Jan 30 (Reuters) - When Human Genome Sciences Inc HGSI.O releases data from a crucial late-stage trial of its drug to treat hepatitis C, analysts will be looking for more than just positive results.
The question on their mind: will the data show the drug albuferon is capable of making money?
Analysts believe the trial, called ACHIEVE 1, will meet its main goal of showing albuferon's non-inferiority compared with the standard of care, but they will be keeping a close watch on the drug's sustained virologic response (SVR) rate to see if the data shows numerically that albuferon has comparable efficacy.
"We do need to see comparable efficacy. It's a non-inferiority trial and there's a certain band of what would be considered non-inferior. (But) if the trial were to show numerically better SVR rates, that would go a long way to convince the market place that the drug has commercial legs," Thomas Weisel Partners analyst Ian Somaiya said.
Albuferon, which could be worth several hundred million dollars, is a type of protein called interferon, and would be taken by patients once every fortnight.
It is differentiated by its dosage from the standard of care, which is administered once a week.
"There's been a reluctance in the investment community to believe a drug given once every other week in this setting, given the side effects of interferon, offers enough of an incentive for physicians to move away from Pegasys," Thomas Weisel's Somaiya said.
The current standard of care for Hepatitis C is antiviral ribavirin in combination with an interferon. Interferons currently in the market are Roche's ROG.VX Pegasys and Schering-Plough Corp's SGP.N PegIntron.
Human Genome's albuferon is also being studied in combination with ribavirin.
Interferon treatment is difficult to tolerate and its side effects include flu-like symptoms.
"People often do it on a Friday so that they don't miss work, but it ruins their weekend," Leerink Swann analyst Joseph Schwartz said.
Hepatitis C is an inflammation of the liver caused by the hepatitis C virus (HCV), and analysts estimate that the worldwide market for hepatitis C is about $3 billion.
Human Genome, which is developing albuferon in partnership with Swiss drugmaker Novartis NOVN.VX, expects to release data from ACHIEVE 1, the second of its late-stage trials for the drug, in March.
If the results are positive, the company expects to file for marketing approval in the fall of 2009.
"2009 is a make-or-break year for Human Genome. The stock is pretty depressed, but they have a couple of huge data points coming up. Albuferon's ACHIEVE 1 is the first of the series of phase 3 data, and is definitely the most crucial," Stanford Group analyst Han Li said.
A successful ACHIEVE 1 trial will lead companies such as Vertex Pharmaceuticals Inc (VRTX.O) that are developing a class of new antivirals to run combination studies with albuferon.
"That's the real market driver," Thomas Weisel's Somaiya, who projects peak sales of $750 million to $900 million worldwide for albuferon, said.
But there is a debate about how these new antivirals will impact the commercial standing of interferon, as they could shorten the course of therapy or limit the use of interferons, Leerink Swann's Schwartz said.
However, some analysts such as Piper Jaffray's Edward Tenthoff believe that "interferon will remain the backbone of HCV therapy to which new antivirals will be added, with no meaningful change in the duration of the therapy."
The company's first late-stage trial for albuferon, named ACHIEVE 2/3, met the goal of non-inferiority, but patients enrolled in Asia responded to Pegasys with better SVR rates.
However, analysts said the ACHIEVE 1 trial will not be affected by that geographical variance as it is testing patients with Genotype 1 -- a strain of the hepatitis C virus prevalent in North America.
Genotype 1 is harder to treat than other strains with interferon, but makes for a bigger market.
Analysts were disappointed that ACHIEVE 2/3, from which the company reported data in December, did not show significant differences between albuferon and Pegasys with respect to quality of life (QOL) measures and missed work days.
The lack of differences on these measures calls into question the overall commercial profile and potential of the drug, JP Morgan analyst Cory Kasimov said in a note reviewing the results from ACHIEVE 2/3.
Kasimov said QOL and missed work days have been cited as drivers of albuferon uptake in the company's market research.
But some analysts such as Stanford Group's Li, who estimates peak worldwide albuferon sales of $700 million, believes QOL will not hurt the drug's commercial prospects significantly.
"(Albuferon) cuts the injections by half. That's the potential selling point," he said.
"QOL is an added benefit. If they don't have it, it doesn't hurt." (Editing by Pratish Narayanan)