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Written by Jason Napodano, CFA
In December 2010, management plans to release top-line data from the ongoing phase II program with FV-100. The trial is designed to show FV-100 superiority to Glaxo’s Valtrex (valacyclovir) in the treatment of herpes zoster (shingles). FV-100, has the potential to be a game changer for the treatment of shingles. The current standard of care, valacyclovir, with an estimated 60% market share, is dosed at 1000mg three times a day. Valtrex has improved lesion healing and pain indication reduction over older drugs Famvir (famciclovir) and Zovirax (acyclovir), but the treatment option can still be improved upon significantly. Inhibitex is developing FV-100, a potential once daily dosing agent, to improve pain scores and speed up lesion healing. Other key endpoints to the trial include reducing incidence of post herpetic neuralgia (PHN) and use of concomitant pain medications. If successful, we believe that Inhibitex’ drug has $500+ million peak sales worldwide. However, even with efficacy only on par with Valtrex, we still believe that FV-100 has commercial potential given the reduction in dosing (improved compliance – especially in the elderly population) from three times daily to once daily. We are optimistic on the data coming next month.
The second major catalyst for Inhibitex is the release of a phase Ib on INX-189, the company’s phosphoramidate nucleoside analogues, also referred to as pronucleotides or protides, which are prodrugs of nucleosides that target the RNA-dependent RNA polymerase (“NS5b”) of HCV. Preclinical and phase I data suggest INX-189 has favorable pharmacokinetics with high potency anti-viral activity. In November 2010, management initiated a multiple ascending dose clinical trial to assess the ability of once-daily INX-189 to reduce hepatitis-C RNA viral loads in treatment naïve patients with chronic genotype-1 HCV, as well as safety, tolerability, and pharmacokinetics, after seven days of treatment. Inhibitex is studying INX-189 both as a monotherapy and in combination with HCV standard-of-care, ribavirin. Preclinical data suggest significant synergy with ribavirin, making INX-189 an intriguing molecule from a partnering standpoint. Data from this phase Ib program should be available early next year.
Management should be in position to advance INX-189 in a phase II, 12+ week clinical trial in combination with standard of care and other complementary direct antiviral compounds by the middle of 2011. We expect that management will partner the candidate for the phase II program in 2011 assuming safety and proof-of-concept have been effectively demonstrated. We remind investors that in March 2009, Vertex Pharmaceuticals paid nearly $400 million to acquire privately-held ViroChem and its HCV non-nucleoside N25b polymerase inhibitor, VCH-222. Inhibitex’ nucleosides N25b polymerase inhibitor looks to offer similar potency with potentially less resistance and improved dosing then VCH-222.
With these two major catalysts on the near-term horizon, and the potential to sign two lucrative collaborations in 2011, we recommend investors buy shares of Inhibitex today. Our target is $4 per share.
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