Good news - Vertex looking to partner with others for some of its trial portfolio
Partnership should both aid development and trials and aid in global marketing. As to its Hep C drug, partnership could help get Incevik into other combo pills for Hep C. Fact is Incevik is a powerful drug against Hep C.
"Vertex Pharmaceuticals Inc. (VRTX), maker of the hepatitis C drug Incivek and cystic fibrosis medicine Kalydeco, is refocusing development efforts on specialty diseases, seeking partnerships or alternative sources of funding for some programs.
“There are some things we’re not going to do,” Chief Executive Officer Jeffrey Leiden said in an interview this week at JPMorgan Chase & Co. (JPM)’s annual health-care conference in San Francisco. “That’s new for Vertex.”
Vertex, which received regulatory approval for Incivek in May 2011 and for Kalydeco in January 2012, will seek a partnership for its VX-509 compound for rheumatoid arthritis, which is in mid-stage clinical trials. Vertex will consider collaborations that enable the company to “maintain value long- term,” Leiden said.
The company will look for outside funding for the flu molecule VX-787. “It’s not a specialty disease,” Leiden said. “We’re going to find external funding” for that molecule, and stop funding it internally, he said.
Vertex’s focus is on hepatitis C, for which it is developing next-generation therapies to follow Incivek; cystic fibrosis; and other specialty diseases, such as Huntington’s disease and multiple sclerosis. Incivek drew $950.9 million in 2011 revenue after being approved in May of that year."
J.Leiden has just signaled an at-least-partial personal "reversal of field" with respect to VX-509, the JAK -3 immune system regulator. Recently he has spoken of expanding the indications for the molecule beyond rheumatoid arthritis to inflammatory bowel disease and psoriasis (sic) which would require added R & D investment. Now he is saying that this "pipeline in a drug" is not a Specialty market, therefore not in Vertex's strategic priority scheme for limited research funding. Given his deep prior history with injectible immune system modulators and his prior enthusiasm this is a notable turn, which again IMO should always be of interest to Investors. Exactly what kind of Deal(s) this will elicit (Vertex shopped 509 around once before, after Phase 1 completion, and did not receive any/ the kind of offers it thought appropriate.) and When are now matters of Uncertainty with a Positive orientation.
Secondly, this direction setting is a clear statement that Vertex's Research labs are more "productive" than the firm's ability to bring "good molecules" to market. Given the widely acknowledged "research productivity bust" in large pharmaceutical companies this is a Good Problem to have. Our Science company is in a "sweet spot", assuming that others share Vertex's opinion that the molecules are greatly promising.
Finally I offer something for Traders, as opposed to my standard comments directed only toward long term Investors. The probabilities that the Company will be announcing "value driving Deal" events in the course of 2013 just took a huge leap upward. Start your Call Option buying conversation engines. For fun I may just take a Flyer.
Well that's one way of looking at things. And while I do appreciate your optimistic viewpoint, I don't really understand how you come up with the "labs being more productive than the firm's ability to bring good molecules to market" when it was indicated in the article that "As the company tightens its drug development focus, it will consider doing deals to bring in new assets, Leiden said. “Our priority is to develop our medicines,” he said. “If we see appropriately priced deals, we’d consider them; those usually end in ’millions,’ not ’billions.’” .
Why would you even consider doing deals for additional assets if your plate is so full that you need to shop around some of your molecules for outside funding in order to continue with them? Maybe complementing assets? Or perhaps they see significant risk in going forward on their own with some of their molecules and are therefore trying to spread the risk around a bit. I think that's a little good and a little bad lumped together.
Don't get me wrong, I like Vertex. I think their approach to intelligently designing molecules has been a good approach, I just didn't see as much positive in the article, and in fact it left me a little worried about their pipeline.