UPDATE: Latest FDA Setback Sends Idenix Shares Tumbling After Hours

--Initiation of human studies of Idenix drug IDX20963 delayed by regulators

--Third Idenix drug to be put on hold by FDA since last August

--Shares fall 22% to $4 after-hours

(Updated to add details and analyst comment.)

 
   By Joseph Walker 
 

Idenix Pharmaceuticals Inc. (IDIX) said planned clinical trials for one of its experimental hepatitis C drugs have been put on hold after regulators requested additional safety data, dealing a blow to what analysts said is the company's most promising compound.

The delay to the drug, known as IDX20963, sent shares plummeting 22% to $4 in after-hours trading Thursday.

It is the third time since last summer safety questions have halted development of the company's hepatitis C drugs, cutting Idenix's market value in half over the past 12 months through the close. Development of the company's other two drugs were discontinued in February.

Idenix had been seeking permission from the U.S. Food and Drug Administration to test the drug in humans, but the company said it now must provide a satisfactory response to regulators before trials can begin in the U.S.

IDX20963 is the company's lead uridine nucleotide prodrug candidate, part of a class of drugs known as "nukes" that have shown strong efficacy in the trials of other companies. However, nukes are also thought to have the potential for safety risks, a perception that led to the discontinuation of the other two Idenix drugs.

"They're going after a class of compounds where it's very, very hard to make safe drugs," said David Ferreiro, an Oppenheimer & Co. analyst.

Idenix is one of several companies racing to develop drugs for hepatitis C, a blood-borne virus that afflicts an estimated four million Americans and 170 million people world-wide. Gilead Sciences Inc. (GILD) and AbbVie Inc. (ABBV) are considered by many analysts to be in the lead in developing the new treatments. Idenix's drug was similar in structure to one of Gilead's nukes, Mr. Ferreiro said, which also gave the program promise in the eyes of investors.

"Even though it was preclinical, it was thought to be more valuable than their clinical compounds," he said. "People were holding on to the hope they had something."

Idenix said it recently submitted an investigational new drug application--needed to begin clinical studies--to the FDA that included preclinical data demonstrating potent, pan-genotypic activity for IDX20963. The FDA has requested additional preclinical safety data for one of the biopharmaceutical company's hepatitis C treatments, which will delay the start of clinical trials.

Despite the setback, the Cambridge, Mass., firm still had $205.3 million in cash and cash equivalents at the end of March, as well as patent claims that could be used to extract royalty payments on Gilead's hepatitis C drugs. However, a recent court decision in that case put the burden of proof on Idenix to prove infringement, which analysts said would make it harder for Idenix to prevail.

"I find this to be a very hard stock to own right now," said Mr. Ferreiro. However, he cautioned the Idenix drug may eventually prove to be safe enough to advance into clinical trials and that the FDA may just be acting with extreme caution.

Hepatitis C is often contracted during sex or by sharing needles. Current treatments require long courses of sometimes painful injections and often don't work.

-Nathalie Tadena contributed to this report.

Write to Joseph Walker at [e-mail]

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