So with the Incivek pricing announced today, the following catalysts are likely in the near term:
1. New analyst VRTX stock price targets based on known cost per patient, and the anticipated payor mix. (With the $49,200 retail price significantly higher than most of the analysts' predictions).
2. Possible inclusion in the S&P 500, given the turn to positive cash flow with an approved blockbuster drug on the market, and a market cap likely heading in excess of $12 billion this week. (Leading to mandatory stock index fund purchasing, as well as increased participation in purchases by most large cap growth fund portfolios.)
3. Proof of concept interim clinical trial data from VX 809 with VX 770 before June 30. (Possibly released at the European CF meeting June 8-12.) If positive, this will potentially increase the treatable CF population with the two drugs from Vertex ten fold, with a corresponding potential increase in revenue from CF drugs alone. These drugs would likely be used for the entire life of each patient treated, with a significant increase in quality as well as length of life anticipated.
4. Initiation of VX 770 clincial trials as monotherapy in other mutations with CFTR in adequate amounts on the cell surface. (With a potential for a three fold increase in the number of CF patients who could be treated with VX 770 alone.)
5. Announcement of the filing of the NDA for VX 770 for treatment of CF in the G551D mutation.
6. Early Incivek sales figures for the month of June, reported in the second quarter financials demonstrating the pent up demand for telaprevir versus boceprevir.
7. Announcement of the approval of Incivek for sale in the EU. (And the potential royalties anticipated from Tibotec/JNJ)
8. More Vertex buyout speculation by pundits and analysts as the potential for the Vertex drug pipeline, and the sales of Incivek become more visible.
Enjoy the ride!
Third, this is fcssr, I am not in the medical field but I can only assume that the patients will go to their hepatolgist for treatment. In the conference call they said there are 4000 physicians and only 300 are considered to be the top. What I am not clear is, are physicians getting the supply directly to a sales rep or to a pharmacy so that the appropriate insurance can be billed.
Excellent summary, thanks for taking the time to share it.
Regarding the $49,000 the question outstanding is how many patients will actually pay that amount. If you recall, Vertex initiated a very aggressive Drug Access program that includes up to 20% of the cost of the drug in co-payment reimbursement and free drug to any uninsured person making less that $100K/year. I found this quite puzzling as $100K/year is not little salary for an individual, so it makes me wonder that this is perhaps just a marketing trick, where the price of the drug is set very high but the actual cost is lower once discounts and reimbursements are accounted for.
I would assume that the average revenues to Vertex per patient, once all is accounted for, may not be more than $25K/patient
Wouldn't all of the revenue end up at the top of the Income Statement? From what I have seen on other bio stocks, it looks like they get to keep (net income applicable to common shares or the proverbial bottom line) is about 20% of the top.