Calls of Note Part 3

Piper Jaffray out with interesting comments on Idenix Pharmaceuticals (NASDAQ:IDIX), saying their checks suggest disappointing Phase 2 SVR data for NM283 without ribavirin. Since discontinuing high dose NM283 from the ongoing Phase 2 HCV treatment-naive study, IDIX has been optimistic that the efficacy of the low dose NM283 group would warrant clinical advancement. However, when firm compares 12 week data from the ongoing study for low dose NM283/Pegasys (PEG) (44% undetectable virus, UND) to data from recent U.S. based studies for PEG/ribavirin (RBV) (50%-60% UND), it suggests that low dose NM283 is no better than RBV, and may be inferior. Additionally, recent feedback from people close to the study has been discouraging, with one of firm's sources indicating 100% relapse, and two other sources indicating significant relapse rates.

Thus, not surprisingly, investors are keenly focused on the first ever clinical data for NM283 in combination with ribavirin (RBV), to be presented at the upcoming April EASL meeting. The primary endpoint of the study is at Day 36, although the study will dose 90 patients for 12 weeks, and will compare NM283/PEG/RBV to NM283/PEG to the standard of care PEG/RBV. While the early viral kinetic data will be presented at EASL, firm believes that the 12 week data is critical for assessing the future direction for this product based on the following (see page 2 for detailed analysis):

(1) the FDA required a full 12 week dataset for this study for a reason (VRTX and Roche have done only 4 week RBV interaction studies);

(2) 4-week data will be difficult to interpret given the small patient numbers UND at that time point (e.g. PEG/NM283 with 18% UND=5-6 patients)

(3) 12-week data will show greater UND rates making between group comparisons more meaningful (e.g. PEG/NM283 with 44% UND=13-14 patients)

Firm believes NM283 plus PEG/RBV needs to show improved anti-viral activity compared to PEG/RBV alone in order to advance into Phase 3 trials. Based on prior data as noted above, firm expects the minimal efficacy threshold for the triple combination to be UND rates of 65%-70% at 12 weeks. If there is no additive anti-viral activity for NM283 +PEG/RBV, firm questions the approvability of this regimen.

Notablecalls: Expect to see weakness in IDIX based on Piper's comments.