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Vertex Pharmaceuticals Incorporated Message Board

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  • gladpick gladpick Feb 6, 2004 9:01 AM Flag

    the NVS news is not good

    Hey aurora man or woman,

    Give me a break please. No question that aurora's science to identify and speed up drug candidates is excellent. But for the price Boger and his advisors paid, the purchase has been a disaster for us. How much do you think we get for each candidate NOVARTIS DECIDES to take up. With the way things have been going with our revenues in the past--peanuts. How many porducts should we spend time to research, out of which Novartis may decide to take one, may be none? Probably many with the rest have to be thrown away because if Novartis won't take them which other company would?

    Besides, if Novartis's was such a good deal why some of the big pharmas with deep pockets and not many products in the pipeline did not snatch it away before VRTX did?

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    • here is Boger's view on the deal (snip from BioCentury)

      Vertex�s P&L epiphany
      Looking out the next few years, Vertex Pharmaceuticals
      Inc. saw that its plan to reach profitability was going to run
      headlong into a large ramp-up in development expenses
      related to its 2000 kinase deal with Novartis AG.
      Following last week�s restructuring of the deal,
      VRTX believes it may have nipped this impending
      collision in the bud.
      Under the original deal, VRTX had responsibility
      for early clinical development through biochemical
      proof-of-concept in humans, defined as late
      Phase I or early Phase II testing (see BioCentury, May
      15, 2000). As amended, Novartis will be responsible
      for compounds starting in preclinical development.

      VRTX (Cambridge, Mass.) has about 500 employees
      in R&D, of which 150 are discovery workers dedicated
      to the deal with Novartis (NVS; SWX:NOVN, Basel,
      Switzerland). Thus far, VRTX has put three kinase inhibitors
      into preclinical development: VX-680 and VX-528 for cancer,
      and VX-608 for neurological diseases.
      As these and other compounds from the deal progress,
      VRTX chairman and CEO Joshua Boger told BioCentury that
      the company "would have had to increase headcount on the
      development side. 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.�

      Boger also said he didn�t want to be in the position
      of having to choose whether to allocate resources to
      internal compounds or to those covered by the partnership.
      "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.�
      Although VRTX expects the restructured deal to
      reduce expenses in the future, it�s not possible to
      determine whether the company will receive more or less
      money from NVS in milestones and other payments. The
      original deal covered eight compounds, and VRTX was
      eligible for more than $600 million in license fees, milestones
      and reimbursements.
      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.
      The royalty rate is unchanged.

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