This is clearly the direction they are headed. He indicated today they are down to 2 programs: CF and all-oral HCV. I would hope that vx-778 and vx-509 could be sold, but I suspect that at least 778 has failed. To not mention it when they've promised data this quarter sounds too much like the epilepsy program to be optimistic.
Ian Smith is under pressure to get the company cash flow neutral in 2013 and that's a tough task. His language indicates Incivek revenues are falling off a cliff and I would expect them to come in at the low end of the full year $1.1 to 1.25b guidance. He stated they are struggling to get European reimbursement for Kalydeco and expected that to occur in stages during 2013; in other words it not happening soon. That means drastic r&d and sales cuts.
The reality is the all oral HCV program is a long shot given where they are in relation to GILD and ABT. So the entire company rests with the results of the 2 CF combo trials. A really stunning turn of events.
I think Ian Smith gave an honest assessment of the financial outlook for the company and it was sobering. I believe he limited his remarks to just the hepatitis C and cystic fibrosis programs because they will be the only revenue generators over the next couple of years. I do not think it indicates VX-787 and VX-509 are failing. He emphasized the importance of the Incivek revenues to the company but went on to say that he expected Incivek sales to continue falling and that Kalydeco sales would not fully compensate for this lost revenue. He also said they would be looking closely at their SG&A expenses which probably means they are concerned about the cash flow and "burn rate." The bottom line seems to be that the next couple of years will be challenging and they will probably continue to lose money until they can get the VX-809/Kalydeco combination on the market. It is likely to be a rough ride with respect to the share price but I believe the long term outlook is good.