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Vertex Pharmaceuticals Incorporated Message Board

  • drsganesh drsganesh Mar 10, 2014 5:50 PM Flag

    PPS if Vx 809 is a success

    What would the PPS be if VX 809 shows promise in Delta 508 mutation patients?
    Adam Fuerstein thinks that the price would double considering the market that would open up ( estimated to be around 7 Billion)
    any thoughts...

    Sentiment: Strong Buy

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    • this has already been factored into the current valuation

    • This might encourage your sense of the potential value of VX 809 in combination with Kalydeco (excerpted from a blog written in October of last year by a pediatric cf patient's parent:

      "From the Trenches

      What follows is a first hand account of someone who is enrolled in the phase 3 vx-809 trials. He’s ddf508. I suspect this blog will get taken down at some point so I thought I’d copy and paste it here just in case. I don’t know this guy, can’t vouch for the accuracy of any of it. But it makes me hope…

      “Quick disclaimer, this is just a personal journal of what I have been experancing on the 24 week VX 809/ VX770 study for CFers that have the double delta F 508 gene type. Please just remember that we all respond differently to treatments……

      My lungs haven’t felt this good in 10 years. I’ve now been in the vertex drug trial for 3 weeks. My PFT’s have gone from 53% to 64%. I’m a lucky man to be getting the goods"

      "I have now been on the drugs for the past 3 weeks. Things have settled down, I feel like I’m at my new normal. PFT’s feel like they are in the low to mid 60′s, I feel like I’m moving a lot more air in and out of my lungs, my mucus is still greenish but down in the amount I’m brining up, I’m guessing 1/3 of what it was. I feel very lucky and a little guilty for getting these drugs. It’s just kind of weird. It seems to be the closest thing to a “cure” I have ever heard about."

    • Adam would not overestimate the market potential. Let's calculate the minimum share price assuming that the FEV1 absolute change is around 6%.

      The market value would be higher than 200 k which 1 year Kalydeco dosing alone costs. Assume that the combination pill would cost 250 k for taking a year. There are 28,000 homozygous 508ers in NA and EU.
      Assume again only 1/2 of these candidates takes in the first year of launch.

      Then, the revenue from the sales of the combo will be 250 k x 14 k = 3.5 B in 2015. Add to this the revenue from Kalydeco monotherapy responsive CFers. The sum is about 4.2 B in the first year. The expenditure for the entire year would be 1.5 B. The profit before tax would be 2.7 B. For this year the tax would be about 35%, then you get 1.75 B for after tax earnings. If you divide this figure with the number of outstanding shares, which may approach 250 M, you get $7 for the per-share earnings. The minimum PE is 35 for Vertex because of its pipeline. Multiplying 7 by 35, you get 147. But this is 18 months away, so you have to discount by 40%. The final estimate is about $150 per shr.. Because of short-squeeze the share may go over 200. Look at what happened to Alnylam on January 13 this year.

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