SCH 900518 is a potent oral inhibitor of HCV NS3 protease which disrupts hepatitis C virus (HCV) polyprotein processing. SCH 900518, when added to the current standard of care (SOC), peginterferon-alfa plus ribavirin, would likely increase the proportion of patients achieving undetectable HCV-RNA levels and sustained virologic response (SVR). In this study, SCH 900518 would be used in combination with low doses of ritonavir to enhance the levels of SCH 900518 within the body and reduce the number of daily SCH 900518 tablets required. The purpose of this study is to identify the optimal dose and schedule (once or twice a day) of SCH 900518 plus ritonavir in previously untreated patients with genotype 1 chronic hepatitis C when given in combination with SOC. The study compares SOC to 6 experimental arms. In the experimental arms, SOC plus SCH 900518 doses of 200, 400 and 600 mg once daily or 100 mg twice daily with ritonavir 100 mg once or twice daily will be explored. The benefits of a 4 week lead-in with PegIntron and ribavirin prior to the addition of SCH 900518 will also be explored.

Inclusion Criteria:

• Adult subjects with CHC HCV genotype 1 with no previous treatment for CHC
• 18 to 55 years of age
• Weight between 40 and 125 kg
• Previously documented CHC genotype 1 infection
• Liver biopsy within 2 years of Screening with histology consistent with chronic hepatitis C and no evidence of bridging fibrosis or cirrhosis
• Subject and subject's partner(s) must each agree to use acceptable methods of contraception for at least 2 weeks prior to Day 1 and continue until at least 6 months after last dose of study drug
• Subjects must be willing to give written informed consent

Exclusion Criteria:

• Prior treatment for hepatitis C other than herbal remedies

• HIV positive or known to be co-infected with hepatitis B

• Medically significant gallbladder or hepatobiliary findings on Screening ultrasound

• Use of any known significant inducers or substrates of CYP3A4 two weeks prior to start of study medications

• Use of herbal supplements (Milk Thistle permitted)

• Diabetic and hypertensive subjects with clinically significant ocular examination findings

• Current moderate or severe depression

• History of depression associated with any of the following:

  • Hospitalization for depression
  • Electroconvulsive therapy for depression.
  • Depression that resulted in a prolonged absence from work and/or significant disruption of daily functions

• Suicidal or homicidal ideation and/or attempt

• History of severe psychiatric disorders

• Past history or current use of lithium

• Clinical diagnosis of substance abuse of alcohol, intravenous drugs, inhalational (not including marijuana), psychotropics, narcotics, cocaine use, prescription or over-the-counter drugs within 5 years of Day 1

• Past or current use of opiate agonist substitution therapy

• Any known pre-existing medical condition (CNS, cardiac, pulmonary, immune mediated) that could interfere with the subject's participation in and completion of the study

• Active clinical gout within the last year

• Hemoglobinopathy or coagulopathy

• Myelodysplastic syndromes

• Organ transplants other than cornea and hair

• Poor venous access that precludes routine peripheral blood sampling or an indwelling venous catheter

• Subjects with a history of gastric surgery (eg, stapling, banding, bypass) or subjects with a history of malabsorption disorders (eg, celiac sprue disease)

• Evidence of active or suspected malignancy, or a history of malignancy, within the last 5 years (except adequately treated basal cell carcinoma of the skin). Subjects under evaluation for malignancy are not eligible.

• Subjects who are pregnant or nursing

• Subjects who intend to become pregnant during the study period

• Male subjects with partners who are, or intend to become, pregnant during the study period