Shares of Idenix (IDIX) were rising after the company said an experimental hepatitis C drug was effective in a mid-stage study.

The stock rose 14.3% to close at $10.71. The shares have almost doubled in the past 12 months as investors bet that Idenix will be among the winners in developing a better treatment for the liver-destroying virus.

The company said its drug candidate, IDX184, worked in combination with older drugs and it hopes to test the experimental treatment without the older injected therapy interferon. One of the goals for the next generation of hepatitis C treatments is to provide an all-oral regimen without interferon, which has serious side effects.

Idenix also reported positive clinical results validating another experimental drug, IDX719, which it will test with its other hepatitis therapy.  

Idenix is competing in a crowded field. Gilead Sciences (GILD), Bristol-Myers Squibb (BMY), Vertex Pharmaceuticals (VRTX), Merck (MRK), Abbott Laboratories (ABT), Roche (RHHBY) and Achillion Pharmaceuticals (ACHN) are among the companies developing new treatments.

It’s important to note that none of these next-generation drugs are even close to entering the market. And a big part of Idenix’s appeal is that it would appear to be a potential takeover candidate for another large drug company that wants to jump into the competition.

Idenix shares spiked after Bristol-Myers announced in January that it was taking over hepatitis drug developer Inhibitex. (See Bristol-Myers Enters Hepatitis Drug Race With $2.5 Billion Takeover of Inhibitex.) Prior to the Bristol-Myers deal, Gilead made an almost $11 billion wager on hepatitis drug maker Pharmasset.

Novartis (NVS) remains a large shareholder in Idenix and would have a say in any acquisition.

Former development partner Novartis walked away from IDX184 in 2009, returning rights for the drug back to Idenix. Once a majority owner, Novartis held almost 31% of Idenix’s common stock as of March, according to a securities filing. Novartis executive Robert Pelzer sits on Idenix’s seven-member board and the big drug maker has the right to appoint another director following the recent resignation of company exec Brian Goff.

Idenix’s announcement Wednesday is expected to keep investors’ interest in the company, particularly if it begins studies to test its drug without interferon later this year. Study results announced Wednesday will be presented at an upcoming medical conference, the company said.

"We expect relatively busy news flow and greater interest in the story in the coming year," Leerink Swann analyst Howard Liang said in a note Wednesday.

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