In HCV "we want to be Fast Followers", to "participate". Given the company's often stated strategic vision to be a Leader in significant unmet markets this is a clear "long term strategic Exit sign'. Gone when the P2, POC studies are definitive one way or another.
Re Financial management. "we are really squeezing the S,G, & A line" is Ironic given the significant added costs associated with the Management Monument new HQ being readied on Boston Harbor. Shades of the Never Fully Acknowledged Kenmore Square fiasco. Ah the 'buried mistakes" of management.
The questioner was Ted Tenthoff and the responder was the CFO. The first half of the discussion focused on Incivek and HCV program. It was acknowledged that Incivek sales has been on the decline for two reasons. First, a number of patients were "built up" and awaiting treatment, which lead to a strong launch. Second, the development and promise of new all-oral treatment options are causing some to delay treatment. Despite the decline, Incivek is and will remain a significant
source of revenue through 2014. The company's long term strategy is to continue to capture as much value as it came from Incivek while pursing an all-oral treatment with VX-135. VX-135 is Vertex's oral nucleotide that is being tested in combination with other drugs from Jannsen and GlaxoSmithKline.
The CFO was evasive to the question of the future role of Incivek in the era of VX-135. While Vertex is unlikely to beat other more developed drugs to market, the company believes hepatitis C treatment is a multibillion dollar market that is not winner-take-all and will be important to the company long into the future.
The second half of the discussion focused on cystic fibrosis (CF) and the company's recently approved drug Kalydeco. Kalydeco is now treating the vast majority of G551D patients and is expected to bring in revenues of ~$50 million from the US alone and more from EU next year. The company believes that expansions to the label represent a significant growth opportunity, from around 4% of the population to approximately 15% of the 70k CF patients. Additionally, Vertex is pursuing a combination of Kalydeco with VX-809 to treat CF in patients who have two copies (homozygous) of the most common mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene, F508del. This treatment could reach as much as 50-70% of patients and be a huge growth opportunity. (If you take 60% of 70k = 42k CFers who would benefit from the combo, a year sales would be 42k x $200k/year = 8.4 b/year.)
Regarding the balance sheet, the CFO said that given the increasingly mature
stages of Incivek, the company has some room in adjusting marketing costs. Funding of late stage programs such as CF is expected to increase from the last year.
so then why do these jokesters for mgt go to the meetings? better if they stayed in their office and made it look like they were working. If they don't have good news or things to say, sit the hell in the office and look at the 4 walls.