Summary/Thoughts on CF discussion at Jaffray conference
In addition to the excellent summary of the CF info from the Piper Jaffary conference by Verityvoila, there were a number of other remarks made by the senior biotech analyst at Piper Jaffary and Ian Smith that were interesting. First, this analyst has had an "outperform" rating on Vertex for the past year and seemed to have a favorable bias. He started by saying "what a year for Vertex" and went on to note the Incivek approval and record launch. Then he said "but the stock has been languishing" and "we are not ready to throw in the towel on the HCV market yet." He went on to say they are "most excited about Vertex CF programs" and "shares could revisit those highs of 50 dollars driven by CF...which I think fundamentally could dwarf the size of the HCV market."
Ian Smith said they saw no change in the prescribing habits by treating physicians. He noted that new HCV therapies are "a number of years off." He also said when asked about "warehousing" of patients that he did not expect this until there is data on safety and efficacy in genotype 1 patients "which is a year or so away."
Smith was asked about Incivek revenues from Japan and europe. His response was that there were no royalties from the Japanese market but there would be a milestone payment which would be announced at the next conference call in 2012. He said he expected a "mid 20 royalty" from european sales (I assume he meant mid 20 percent.)
Smith talked about the oral regimen (Incivek/VX222/ribavirin) in phase II testing for GT1 patients and said there would be "interim data at week 12." He went on to say they "might be able to move very quickly to a registration study" for the 3 drug all oral regimen. He also said the "data will come shortly" and they would have data for both GT1A and GT1B subtypes. He said they expected to start "combination studies" with the Alios nucs in the "latter part of 2012."
Smith discussed the hepatitis C subpopulations including the harder to treat patients and said Vertex was working to expand the label for these subgroups. He said there was no data yet from other pharma companies regarding treatment regimens for these patients.
Smith ended the HCV discussion saying that he expected a "highly fragmented market in the latter part of this decade" and that Vertex was "trying to target different pieces of this market."
The Piper Jaffray analyst said he recently attended the North American CF meeting with Vertex and several investors. He said "2012 is going to be all about CF for Vertex." Regarding Kayleideco and the G551 mutation, he said of the physicians attending the conference "these docs have religion is really the only way I can explain it."
Overall, I thought CFO Smith's presentation was very good. He seemed confident about Vertex strategy with respect to the HCV market and I did not detect any hint of panic. I also heard no misleading statements or smoke and mirrors.
Completely agree re the analyst. I've listened to every conference over the last year+ and was shocked at how little they seemed to know re the CF pipeline and how un-probing their questions were. And if the other analysts don't understand the CF pipeline and know what to ask, makes me wonder what they know about the other drugs. Kinda like when I read journalists botching legal reporting and my brother says the same re medical reporting--makes me think they don't know much!
The Piper analyst seemed more enthusiatic about the Vertex pipeline than Ian Smith did. Perhaps management does not want to crow until they deliver results, but I think that at least this analyst sees the current stock price weakness as a buying opportunity with positive clinical trials turning sentiment back in favor of VRTX as it's pipeline gets positive news next year.
"The Piper analyst seemed more enthusiatic about the Vertex pipeline than Ian Smith did." --------------------------------------- I agree. In fact during the early Nov conferences, Ian in response to one of the analysts' question abour VRUS's 7977, praised 7977 by saying something like the compound is a very good accomplishment "for the field." He did not even indicate any qualifiers about the fact that no data is yet available about its effectiveness as an oral regimen for geno 1.