Vertex to Buy Hepatitis C Drug Developer ViroChem for $375 Million

Vertex (VRTX), which is developing the hepatitis C virus (HCV) protease inhibitor telaprevir, will add two polymerase inhibitors to its HCV drug development portfolio through an agreement to acquire privately-held ViroChem Pharma in a stock and cash transaction. The move expands Vertex’s global presence in HCV and has the potential to enhance the profile and lifecycle of our telaprevir-based combination regimens.

Terms

• ViroChem shareholders will receive $100 million in cash and 9.9 million shares of Vertex common stock
• Actual number of shares of Vertex stock to be issued will be based on an average share price prior to the closing (will not exceed 11.0 million shares)

Following completion of the transaction, Vertex will own worldwide rights to ViroChem’s HCV drug development portfolio, including VCH-222 and VCH-759, which have demonstrated substantial reductions in plasma HCV RNA when dosed as single agents and have been well-tolerated in clinical studies to date. In particular, VCH-222 dosed as 750 mg twice daily resulted in a median 3.7 log10 decrease in HCV RNA at the end of dosing in a three-day viral kinetic study, representing the most substantial reduction in viral load reported to date with an investigational HCV polymerase inhibitor dosed as a single agent. Vertex expects to begin clinical evaluation of novel combination regimens of its HCV protease inhibitor telaprevir, currently in Phase 3 clinical development, in the second half of 2009.

Two ViroChem HCV polymerase inhibitors, VCH-222 and VCH-759, are currently in clinical development. ViroChem also has a preclinical program directed at the discovery of novel HCV NS5a inhibitors. The status and profile of each clinical compound is detailed below.

VCH-222: VCH-222 is an oral non-nucleoside inhibitor of the HCV NS5B polymerase that recently completed a viral kinetic study in HCV patients. In this study involving five treatment-naïve genotype 1a and 1b HCV infected patients, VCH-222 dosed as 750 mg twice daily resulted in a median 3.7 log10 decrease in HCV RNA – equivalent to a 5,000-fold reduction in virus in the blood – at the end of three days of dosing. The results were consistent from patient to patient, and across HCV genotype 1 subtypes, and represent the most substantial reduction in viral load reported to date with an investigational HCV polymerase inhibitor dosed as a single agent. In clinical evaluations to date, VCH-222 has been well-tolerated, with no serious adverse events observed. VCH-222 has completed 28-day non-clinical toxicology studies in two species.

VCH-759: VCH-759 is an oral non-nucleoside inhibitor of the HCV NS5B polymerase that has completed Phase 1b clinical development. In a Phase 1b trial reported at a medical conference in 2007, VCH-759 dosed as 800 mg three times daily showed a mean maximal 2.5 log10 reduction in HCV RNA and a median 1.7 log10 reduction in HCV RNA at the end of 10 days. VCH-759 was also well-tolerated with no serious adverse events observed in clinical studies to date. VCH-759 has completed 28-day non-clinical toxicology studies.

Future clinical plans: Vertex plans to conduct additional dose-ranging studies of VCH-222 as a single agent and in combination with pegylated interferon and ribavirin. Vertex plans to initiate a first clinical study combining telaprevir with a ViroChem HCV polymerase inhibitor in the second half of 2009. Data from in vitro HCV replicon studies suggest that VCH-222 and VCH-759 may provide synergistic or additive antiviral activity to the HCV protease inhibitor telaprevir, thus creating the potential for a non-cross resistant, complementary profile in exploratory clinical studies.