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Vertex Pharmaceuticals Incorporated Message Board

  • anon_a_muss anon_a_muss Feb 5, 2004 10:01 AM Flag

    the NVS news is not good

    <Vertex will continue to be responsible for drug discovery, while Novartis will be able to pursue research in the field independently of Vertex.>

    Sounds like NVS is concerned that Vertex cannot deliver on their promises and want the freedom to pursue other companies that have kinase programs/targets of value.

    <Novartis will be responsible for pre-clinical and clinical development.>

    NVS being in charge of pre-clinical and clinical development suggests that NVS does not think Vertex can do a good job with this responsibility. Just as important, NVS having control of this phase of the projects means Vertex does not make the decision to push programs forward to these phases of research.

    Hopefully Vertex will get rid of the people who have put them in such a bad situation with such horrific decisions the past couple of years. Hopefully Vertex will finally be able to clinch a deal of signifigance. This company is running out of money and it does not seem that they will be able to deliver in a timely manner.

    If things don't change this year, as an investor (and a bagholder), my hope is that they will cut the staffing at least in half. 180 million/yr burn is a joke for a pittance of returns and the stink of incompetence.

    anon

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    • I stand corrected. Sorry you view my post as "spouting".

    • " VRTX as a chemistry based company certainly is in a favorable position, the value in the Aurora acquisition is not the HTS capability but the know -how in kinases. Boger and Sato in their latest presentation have mentioned the increasing industry wide interest in Aurora-Kinases."

      Aurora kinase is the 'scientific' name of a kinase and has nothing at all to do with the acquisition of or the work done by Aurora Biosciences- just a coincidence that the names happen to be the same. please do your due diligence before spouting off.

    • NVS is paying the running costs of the cooperation R&D, here are some numbers on the original deal (taken from a Novartis presentation I listened to in 2000)
      - $ 15 mio upfront
      - $ 400 mio in non-contingent R&D funding
      ($ 200 mio direct research support over six years and $ 200 mio loan facility for pre-clinical and early clinical work)
      - $ 400 mio in license fee and milestones
      - royalties on sales

      Novartis expected first "VX" compound in 2002 and a sustained stream of "VX" compounds in 2003 and beyond.

      I don't have numbers on the amended cooperation, but have no doubt that VRTX failed to deliver the compounds Novartis anticipated, nevertheless do hope they come up with some future compounds

      research is a tough job :-)

    • No, use $250k/year for the fully loaded cost per R&D employee and you'll be closer. So that's a $37.5M a year cost to Vertex. Is there any plain old vanilla R&D support paid to Vertex regardless of progress, or is it all option/success/milestone based? Also, let's assume Vertex wants to work on kinases on their own, so do they get to keep anything from this program themselves, or only what Novartis doesn't option and take out? If the former, then Novartis is at least partially supporting a kinase program Vertex would have to fund themselves anyway.

    • One spelling error,ok. Two, I got to make a correction!
      In my previous post the correct spelling is "accept" and also "dealt." :-)

    • From the news quoting Boger a few days ago (posted by Papa):

      <<VRTX (Cambridge, Mass.) has about 500 employees
      in R&D, of which 150 are discovery workers dedicated
      to the deal with Novartis...........
      As amended, VRTX will nominate an unspecified number
      of candidates for preclinical development. It will receive $10
      million upon acceptance of each candidate and is eligible for
      up to $25 million in additional milestones for each compound.>>
      -----------------------
      If we take the 150 employees that are working on Novartis's so called collaboration and assuming a salary and fringe benefit of $130,000 per person, the annual cost would be about $20 mil. Add to that the other associated costs, payroll personnel, rent, lab equipment, etc, etc--- so does anyone know how much we have received from novartis per year since we have deait with them?
      At the new revised agreement, Novartis has to eccept at least 2 candidates per year to net us $20 mil to just cover salaries and fringe. Are my calculations all wet?

    • gladpick-

      wow, the key word "profitability" and
      a time table "2006-2007"

      cutting it a bit close. Wonder if 2006-2007
      was picked because, well, that's when they
      would have run out of $$$

      papa- thanks for the info. where did you
      find it?

      good luck all


      "This would have hit hard in 2005 through
      2007, which are the years we see the company moving to
      profitability. Our profitability will be driven off our first
      internal drugs to make it to market, for which we expect the
      first NDAs in 2006 and 2007.�

    • papa,

      Thanks for the info. Very revealing.

      It appears that Boger is saying the restructuring of the agreement provides less risk for VRTX than before. I wonder if by no longer having the responsibility for phase I development for Novrtis he would soon announce layoffs and reduce his cash burn forcast?

      Also I guess by his below statement he is acknowleging the possibility that we could run out of money or be in such a poor financial position (maybe in 2006?) that we may have to discontinue internal drug development at least until we become profitable.
      -------------
      <<"Let�s say, for example, that in 2006 I didn�t have the ability to service the Novartis deal and my internal candidates � what gets cut? We�d be in a
      tough position, and it�s not unbelievable that we
      would have to cut back on our internal efforts, thus
      putting a real constraint on our ability to do activities
      for our own top line.�

      Again thanks for the info. Very helpful.

    • >>The bottleneck is clearly the screens which determine how well and how fast lead compounds can be identified and the chemistry which determines the attributes of the drug which make it effective and useful in vivo.<<

      if we look at kinases inhibitors like gleevec (blockbuster) and iressa (desaster) we have to conclude that we no longer ought to optimize molecules against a single target, but against an orchetra of targets, that's the new challenge, just hope VRTX has a broad set of different screens available

      >>I think the acquisition made a lot of sense for Vertex. <<
      I agree, but boy, the price causes head-ache! takes more than one aspirin :-)

    • Thanks for the quotes. I think it underscores the point that the rate limiting step in drug discovery is not target identification, but rather lead compound identification and lead optimization. Aurora has (had) a leading platform for lead identification with its novel screens (ie fluorescence-based readouts) and high speed platforms (ie ultrahigh throughput, small volume, robotized equipment). There are plenty of big compound libraries out there (admittedly with variable quality) and there are thousands of attractive targets out there (many discovered by genomics and validated with knockout or transgenic mice). The bottleneck is clearly the screens which determine how well and how fast lead compounds can be identified and the chemistry which determines the attributes of the drug which make it effective and useful in vivo. Aurora brings the former and Vertex brings the latter. I think the acquisition made a lot of sense for Vertex.

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