The way I see things have recently happened and are happening that have caused VRTX to plunge are the following IMHO:
1. Investors believe Incivek's sales have become stagnent and not growing like they anticipated it would. VRTX management (even though they were very positive during the conference call) for the past two weeks have not presented week to week data that disproves that although pharma companies ordinarily do not provide such week to week data on the sale of their products. However, these are not ordinary times for VRTX when most investors think VRTX is a dead duck and also behind the competition.
2. Most competitors have become much more aggressive in their drug trials while VRTX has stuck to its old methodical method of taking its time in a step by step process. For example if one looks at VRuS, they have planned a phase 3 based on partial phase 2 data before they have the completed phase 2 data. To my knowledge VRTX has not announced anything similar to that before. They may have planned it but not announced it and today investors respond to announced future plans rather than actual results accomplished (compare VRUS and VRTX pps action for the past 6 month).
3. Let's face it, unless I am wrong and be happy to stand corrected, VRTX for whatever reason erred in not working on a nucleucide compound for the past several years to try to cover all the bases for its HCV. They tried to deal with that shortfall a little late in the game by their announcement of a partnership deal with Alios (see link below). The problem with that was that at the time they announced that deal on 6/13/11, Alios's 2200 and 2158 were still in preclinical development. As to the future, the link indicates the following:
"Future Development Plans: Alios and Vertex plan to initiate clinical development of each compound in the fourth quarter of 2011, which is expected to include studies of the compounds in healthy volunteers followed by short-duration safety and viral kinetic studies in people with hepatitis C. The goal of the first clinical studies of these compounds is to generate data to enable the initiation of Phase 2 studies as early as the end of 2012. These Phase 2 studies are expected to evaluate multiple combination regimens of ALS-2200, ALS-2158, INCIVEK and VX-222. The combination studies would be designed to generate sustained viral response (SVR or viral cure) data. Additional details on the clinical development program for ALS-2200 and ALS-2158 will be provided later in 2011 upon initiation of the first clinical study."
Meanwhile VRUS will initiate its interferon free nuc regimentin mid 2012. that is 6 months before VRTX. If I were VRTX management, I would immediately initiate the phase 1 trials with these two compound rather than waiting and if the results are decent by the 8th week I will plan the pase 2 study early in 2012 rather than their present plan of starting it "as early as end of 2012." In short, IMHO, that is what the competition is doing with their nucleucide drugs -initiating various trial phases quickly and staggering phases to stay ahead of others and investors are rewarding them for that and unloading VRTX shares.
Glad, interesting analysis and I agree with a lot of what you said but I think it is premature to do a postmortem exam on the company. I expect Vertex stock to regain everything it has lost and more within the next year.
Nice to hear from you. other than a post last week we have not seen any from you for a while and I miss your input.
As to VX-222 which I think hold some promise for us, it is a non-nucleutide. here is a quote and a link:
"While the protease inhibitors telaprevir and boceprevir are the directly-targeted anti-HCV agents furthest along in the development pipeline, HCV polymerase -- an enzyme responsible for copying viral genetic material -- is also a promising target. VX-222 is a novel non-nucleoside HCV NS5B polymerase inhibitor with potent in vitro activity."