PTCT is conducting phase III trial of their Ataluren drug for non sense mutation in CF. Sub set analysis shows that patient without inhaled aminoglycoside did better in their previous phase III trial and now they are conducting a new phase III with exclusion of inhaled aminoglycoside patients. Their numbers are weak, no matter how you see the previous trial and relative FEV-1 is only 5% at best.
I think VRTX need to be proactive and should ring PTCT door bell and offer to combine these drugs for non sense mution and see if they have better luck. I will say combine both drugs even for muscle dystrophy patient s and you never know if they will do better.
Drs. Leiden, Chodakewitz, Boger and the Vertex scientific advisory committee will recruit someone comparable to Peter Mueller to lead the Vertex R&D program. I suspect they will have an easy time finding such a candidate given the growth trajectory and revenue stream Vertex is now expecting with the approval of 809/0770 just months away and a pipeline of preclinical drug candidates for cancer, neurologic disease, autoimmune disease as well as second generation correctors for CF. Their experience and contacts in the pharmaceutical and academic research worlds will certainly give them plenty of candidates to consider for the position. At this time, Vertex is a great career move for the right person wanting to lead the growth of the R&D arm of this growing company.
Verity, the Traffic trial yielded the absolute change of 3.6% for 600mg Lum within the group, and 4% relative to placebo. The Transport yielded a lower value of 2.6%. These compared with the Phase II 4+4 wk data of 3.4% within group and 6.7% relative to the placebo. All numbers quoted above were absolute ones. The Ph II data were noisy. As you stated, Ph II data of 661/Iva combo gave slightly better results. After 4 wks' of the 100mg 661 dosing, FEV1 changed by 4.8% absolute (9% relative) within group as well as relative to placebo.
The most important results from the Ph III data are not FEV1 changes, but the significant reduction in the frequency of pulmonary exacerbations that participants experienced, and the high number(90%) of participants in the rollover study.
That was my initial caution. Another way to look at this, is that it implies they expect cash flow development 2 to 3 quarters ahead of current pace, or they just get more debt. But no dilution is a positive.
At first when I read it I was disgusted that they need money with 1B on hand. Reading the details, it show they are confident it can be paid off. At least it's a loan NOT a dilution or secondary offering of additional stock.
I was actually trying to figure out whether 661 would be better....I reviewed all the numbers and frankly am having a hard time comparing. Are the phase 3 results for 809 compared to placebo or within group? I'm trying to get apples to apple to compare phase 2,3 for 809 and phase 2 for 661. The best I can do is say that for the # with greater than 5% relative improvement is quite a but higher for 661. That bodes well for it being better. Anyone able to figure out how to compare? I'm having a problem with the is it compared to placebo or within group?
I was thinking vertex is working on a collaboration with Ataluren. Cf is its only priority program now and that could get vertex to 95% of the population. I'd think that would be enough cash for that narrow of a collaboration.
I don't know how many times I posted they needed money. 300 M seems either too small as I thought a billion based on development forecasts and cash flow projections - OR - this is an incredibly bullish sign that Vertex management reasonably projects that (A) they will increase revenue by additional indications, partnerships, or sale of non strategic assets, or (B) accelerate development, or (C) any combination thereof.
So how do you read it? Bull case or Bear case. I am leaning towards Bull.
Sentiment: Strong Buy
Vertex is borrowing $300M at an interest rate of 7.2%. The purpose for this loan is said to be related to strengthening financial position:
[[ The credit agreement is intended to strengthen our financial position as we invest in our key development programs in cystic fibrosis and in research for future medicines, including potential collaborations to support priority programs. ]]
Vertex may need funds for supporting Phase 2 trials of reversing, and blocking AIDS using caspase-1 inhibitor, VX-765.
Is a joke. Rated VRTX a sell when it was trading in high 50's, low 60's. Now that it is in the upper 90's it rates it a hold. A very good rating system if you love losing money!
Since release of TRAFFIC/TRANSPORT data, analysts have been modeling a discount on the 809/770 pricing and still predicting peak annual sales averaging 7 billion worldwide (and it could be more since these are hypothetical projections). Long term efficacy data regarding decreased rates of infection and hospitalization, as well as slowing the progressive loss of pulmonary function will be a important factors in getting better pricing from payers. If data coming from VX 661/770 Phase 2 trials currently underway shows better improvement in absolute FEV-1 compared to TRAFFIC/TRANSPORT, the stock will get higher valuations seeing the likelihood of better pricing for the eventual use of 661/770 in 508d homozygotes and eventually in the 508d heterozygotes when combined with second generation correctors.
I think the key is price will be dependent on FEV1, not adoption. They simply can't charge as much for the combo as they would have if they had achieved 6%.
It will be interesting to see what impact this will have on Kalydeco mono therapy pricing.
some time ago JPM had an estimate on VRTX share price after positive combo results. If I remember correctly it was about $100 on 3% FEV1 and about $150 on 6% FEV1. Now that we know that the combo FEV! is about 3% the current share price supports the JPM prediction. However, a correlation of FEV1 and share price would suggest that sales of combo is dependent on FEV1. But does the number of patients using the combo really depend on FEV1? I guess not, once approved CF patients will use the combo, no matter what the FEV1 number is. Having said that, what is a realistic share price to be expected on approval?
Usual pullback with VRTX has been 10-20% from peak within 2-4 weeks after big moves. We could see this amplified if there is large market correction that occurs simultaneously.
Profit-taking ahead of market downturn and increasing instability will affect entire biopharma sector, most especially those that have had a very nice recent increase. Keep an eye on the sector indices.