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Former Merck Unit Works on First Vaccine for Hepatitis C

Okairos AG, a biotechnology business that Merck & Co. (MRK) sold to venture capital funds in 2007, is seeking to produce the first preventive vaccine for hepatitis C, challenging makers of treatments for the disease.

Okairos has begun a mid-stage study, funded by the U.S. National Institutes of Health, of a gene-based vaccine designed to stimulate the body’s immune system to prevent hepatitis C from taking hold, Chief Operating Officer Tom Woiwode said in a phone interview from the company’s Basel, Switzerland, headquarters.

No vaccine exists for hepatitis C, which affects as many as 170 million people globally, putting them at risk of developing liver cancer, according to the World Health Organization. The growing population of patients infected with the virus spurred Gilead Sciences Inc. (GILD)’s decision in November to buy experimental hepatitis C-treatment maker Pharmasset Inc. for $10.8 billion and Bristol-Myers Squibb Co. (BMY)’s acquisition in February of Inhibitex Inc. for $2.5 billion.

“This could change the landscape quite a bit,” said Les Funtleyder, a health-care strategist and portfolio manager at Miller Tabak & Co. in New York. “In theory, if you could vaccinate everyone, you’d need a lot less drug.” Funtleyder said he isn’t aware of any other preventive vaccines in development.

Disease Transmission

Okairos’s vaccine would target those who may be at risk of infection. The disease is most commonly transmitted through contaminated blood transfusions, organ transplants, contaminated syringes and needle-injected drug use, according to the WHO.

Most preventive vaccines stimulate the production of antibodies, molecules produced by the immune system as part of the body’s defenses. Development of Okarios’s vaccine was triggered by studies of patients with early-stage hepatitis C, of whom about 20 percent spontaneously clear the virus and avoid advancing to the chronic phase, Woiwode said.

Researchers have found those patients tend to have a strong response in the blood’s T cells, Woiwode said. Armed with that knowledge, Okairos developed technology that delivers genetic material to stimulate T cells, the white blood cells that help the body fight diseases.

This approach contrasts with most other vaccines, which stimulate an antibody response, Woiwode said.

“We’ve opened up a new path that will allow us to address a number of diseases, hepatitis C being the first one,” he said in the interview yesterday.

Even if a vaccine is approved, medicines are needed to treat patients already infected, Miller Tabak’s Funtleyder said.

Industry Projects

Merck and Vertex Pharmaceuticals Inc. (VRTX) won approval last year for the first new therapies for hepatitis C in almost a decade. Johnson & Johnson (JNJ), a partner in the Vertex drug, is also cooperating with Swedish drugmaker Medivir AB (MVIRB) on a hepatitis treatment. Basel-based Roche Holding AG (ROG) agreed in October to buy Anadys Pharmaceuticals Inc., another maker of experimental medicines for hepatitis C, for about $230 million.

Profectus Biosciences Inc., a Baltimore-based vaccine manufacturer, is also developing a drug that prevents patients with early-stage hepatitis C from advancing to the chronic stage. The company plans clinical trials of the product in 2013.

Investors in Okairos, which is also developing malaria, cancer and flu vaccines, include Boehringer Ingelheim Venture Fund, Life Sciences Partners, Novartis Venture Funds and Versant Ventures. The Swiss company has also received grants from the European Union and the Bill and Melinda Gates Foundation.

The company is in discussions with potential partners for marketing the vaccine, Woiwode said.

“I have no doubt that if this Phase 2 study is successful, there will be no shortage of interest to work with us to bring this to the market globally,” he said.

To contact the reporter on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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