Very upbeat and positive tone to Leiden's comments and answers to analyst's questions. Leiden was very clear that a monotherapy Kalydeco arm was not needed to prove any independent contribution effect to Orkambi, nor should one be added to ongoing 661/770 phase 3 trials underway. Just as positive was his discussion of the overall goals of combination therapy in development with next gen correctors and or other potentially useful meds from other companies that will be tested to treat any patient with a 508d allele, homozygotes or heteros. Lastly the general discussion about the potential for the non-cf pipeline which Leiden described as likely generating approved drugs in the next 3 to 5 years, and the reason most of current senior management is committed to working at VRTX which has such a deep and potentially successful drug of drug candidates.
VRTX announced today the NEJM, the most prestigious journal in clinical medicine, has published the results of the two PHASE 3 Orkambi clinical trials being considered by the FDA for approval of Orkambi, further validating the clinical significance of the data, as well as the concept of combining CFTR a potentiator, kalydeco, with correctors e.g. lumacaftor, 661, and next gen correctors to treat the underlying defect in the majority of CF patients.
First public presentation by the company following the Orkambi FDA ADCOM meeting, The fact VRTX CEO Leiden is the speaker may make this presentation more substantive than average, with the topics likely to detail both the CF pipeline and the plans for the market launch of Orkambi this summer, as well as the rest of the non CF pipeline. Hopefully the FDA will be announcing an early approval of Orakambi prior to July 5 PDUFA date, so that pricing and market launch will begin ahead of schedule and the 508dd CF population will finally have access to a drug that treats the underlying cause of their disease and prevents the ongoing destruction of their lungs.
It's logical that 508/551 heterozygotes would have an additional benefit from adding a corrector like 661 to ivacaftor in improve further the FEV-1 and other clinical endpoints since these CF ;patients have partial expression of the CFTR on the cell surface and the folding transport defect preventing some of the CFTRl being trafficked to the cell surface due to the expression of the 508 mutation. The study you quote is the basis for the FDA allowing advancement of the Phase trials currently underway to treat these specific cf patients.
Just as important is the future growth from the non-CF pipeline with flu and spinal cord injury drug
Phase 2 drug trials reporting next year, with the potential
to start Phase 3 trials for those drugs in 2016 as well. Then there is oncolocgy and preclinical candidates for CF HD and chronic MS all likely to either start or complete Phase 1 and 2 clinical trials over the next year as well. The potential for rapid growth of revenue and EPS is just starting to be realized. Once again patience will be rewarded for investors with a long term outlook .
An additional study to determine whether Ivacaftor monotherapy alone benefits 508dd patients seems redundant and unnecessary since prior Phase 2 trials revealed no benefit from monotherapy of either lumacaftor or ivacaftor alone at 16 weeks, in contrast to proven safe effective Orakambi treatment. Why would someone want to delay treatment with orakambi to treat with monotherapy that has not shown benefit?.
Definitely possible, but I can't predict any specific short term price movements or numbers, just IMO the price will definitely move up quickly on the news of approval and better than expected pricing. The magnitude of the move will be primarily related to the amount of short interest and the Orkambi pricing. Remember the rest of the VRTX pipeline also is not being factored into analyst's valuations and that will eventually drive things much higher (see Rojospan's posts for examples).
Given the selloff by naysayers who are shorting VRTX after the ADCOM vote on Orakambi, (an overwhelmingly positive vote for the FDA's approval of this drug with 'breakthrough drug' designation) they are exposed to a possible early FDA approval. That, IMO, would lead to a huge short covering rally, which will be sustained by the pricing of Orakambi coming in at higher price than projected by the negative analysts, and the fact their is no competition for pharmacy benefit managers to demand excessive discounts from and a recent court decision regarding Kalydeco coverage for Medicaid CF patients in Arkansas making formulary exclusion of breakthrough drugs like Kalydeco and Orakambi illegal, and require health care insurers to pay for such drugs to insured CF patients with both public and private insurance.
Rojo, congratulations and thank you for your astute observations and reporting of the progress of the many clinical trials underway at VRTX and the progress being made on so many fronts. Yesterday's ADCOM results should translate into an early FDA approval for Orakambi before the July 5 deadline, leading to earlier than anticipated market launch and revenue stream for VRTX. The cash flow from Orakambi will be the catalyst to initiating clinical trials in both the earlier stage CF drug candidates as well as the non- CF drug pipeline at VRTX. When the analysts start to give value to these earlier stage assets, beyond the billions about to be realized from the approval of Orakambi, the price targets and the PPS of VRTX will move significantly higher. I echo your Congratulations to our friends, the dedicated VRTX longs you mentioned on this message board, and especially to the CF community who stand to benefit most from the success achieved at yesterday's meeting!
Exactly right Pappa! Upon FDA approval, IMHO Vertex should keep the retail price of Orakambi the same as Kakydeco monotherapy to essentially give the benefit of the addition of the second drug, lumcaftor, in the combination treatment for 'free', to allow the proven clinical benefit demonstrated in the Phase 3 809/770 clinical trials to be had by the 508dd homozygote population, and to avoid criticism of any doubters of how much lumacaftor v. ivacaftor adds to the demonstrated benefit of the combination therapy in this subpopulation of CF.
Verity, the Ivacaftor monotherapy Phase 2 trials testing it's efficacy on 508dd homozygotes were sufficiently powered for the FDA to conclude Ivacaftor cannot be marketed for treatment in the 508 homozygote CF population. Despite precluding the use of Ivacaftor monotherapy in the treatment of 508dd homozygotes, now the same FDA is suggesting Ivacaftor may be effective and responsible for benefit seen in the Phase 3 809/770 trials and that lumacaftor essentially adds no proven benefit. How does one reconcile the lack of response to each drug separately in the in vitro models and Phase 2 clinical trials in the 508 dd homozygous CFTR defect and not acknowledge the benefit of the combination of the two drugs in the phase 3 trials?
The FDA has the statistics, it's their degree of clinical significance that is being debated. Key opinion leaders in CF do not seem to have any question of the significant clinical benefit that 809/770 data demonstrated in the phase 3 clinical trials. The degree of benefit will with newer combination treatments in development likely be even greater, but fgor now it is 809/770 that represents the only treatment for slowly the progression of lung damage from CF treating the underlying mechanism of the disease.
How is that an "insubstantial response"? It spells out what most all CF opinion leaders have opined outside of VRTX on review of the Phase 3 trials results, . That the 809/770 offers the first effective treatment for the underlying cause of CF in the 508dd population, not just substantiated by the Phase 3 clinical trial, but in the ongoing rollover study in which both almost every single placebo and study drug patients elected to participate because of the observed clinical benefits which have been sustained over the past year. An objective FDA ADCOM meeting composed of experts in the CF field next week should have no problem recommending approval for 809/770 in 508dd CF patients based on the data.
Thanks Vertiy. How frustrating that one cannot get to listen to a real time broadcast of the ADCOM meeting for orkambi next Tueday. Perhaps CFF connections with the Obama White House can complain and get a 'policy' reversal about the decision not to live broadcast this meeting that has so much importance to the CF community.
If Corbus drug has a clinical benefit, it would likely be at best an add on drug to treat symptomatic cf patients by decreasing existing inflammation (like prednisone does in asthma/bronchitis). No competitve threat to VRTX drugs which treat underlying cause of CF by potentiating or correcting CFTR function.
Alexion buys another orphan drug company for over 8 billion today with no approved products and it's closest drug to approval estimated to make less than one billion in annual sales peak sales in 2020. Orkambi is estimated to generate peak sales of 6-7 billion per year so Geoff Porges suggestion than GILD buy VRTX for it's CF assets, with the rest of the VRTX pipeline to boot for 45+ billion is not farfetched. The future growth of large pharmaceutical companies is now tied to timely acquisition of potentially lucrative advanced stage drugs, and the M&A activity from Wall Street in this sector is booming. Perhaps the outcome of FDA ADCOM meeting for Orkambi next Tuesday could be the trigger for a VRTX bid?
Without trying to be an apologist for management errors, let's remember it's easy to use hindsight for criticizing decisions both at VRTX and in our own lives. Did you make the right decision among unclear choices every time in your life? Leiden did not choose telaprevir over Pharmasset's drug that eventually became GILD's solvadi. He inherited those decisions. Emmens made 2 billion dollars for VRTX on telaprevir's short life cycle as a hep C treatment and that financed the success the company has had with CF. His focus of CF is mostly PR for the CR foundation as much as it is a mindset to get Orkambi approved to finally get the company profitable to finance the rest of the VRTX pipeline which has not been dormant. The neurologic diseases including spinal cord injury, HD and Chronic MS will all have clinical trials by 2016. VX 787, if reporting positive Phase 2B clinical trial results will likely complete Phase 3 trials in 2016 leading to another revenue source after gaining FDA approval (without incurring addition cost of development or marketing worldwide). Oncology drugs are entering Phase 2 trials, and of course next generation correctors are being aggressively pushed for 3 drug combination treatment of CF to expand the treatment to 508d heterozygotes and improve outcome in homozygotes. VX 765 did not meet efficacy endpoints in epilepsy. When you have to conserve cash burn rates, you have to focus cash on the drugs most likely to succeed and give the biggest return on investment in your pipeline. VX 765 evidently did not meet that criteria in both seizure disorders and in HIV in the preclinical data from Gladstone Institute. Same was true for Alios drug for hep C, and for VX 509 in RA which were not worth the investment given the current competitive landscape for existing treatments in those markets. In drug development you cannot win them all, but one success allows the development of several more winners and VRTX is at that stage. IMHO, Enjoy it!
May 12 FDA ADCOM meeting to discus approval of Orakambi (809/770)
Non stop speculation about GILD making a bid for acquiring VRTX.
Early approval of Orakambi following ADCOM recommending approval
Pricing and commercial launch within days of FDA approval of Orakambi
PHASE 2B VX 787 influenza clinical trial data release starts to bring attention to non-CF assets in VRTX pipline and analysts add potential revenue/eps to their valuation models for these earlier stage drugs in the VRTX pipline e.g. oncology drugs as well as influenza in addition to CF franchise.
Advancement of second gen correctors to clinical trials to treat CF patients
initiation of clinical trials to treat neurologic disease e.g. Cervcial spine injury, HD and chronic MS.
GILD CEO discussed during today's first qtr CC being open to suggestions involving GILD acquiring a competing large pharma that would enhance revenue in a disease area GILD already has a presence in. Vertex growing leadership in the CF space fits perfectly. Porges probably has been lobbying hard to have his firm, Bernstein, assist GILD orchestrate a takeover bid. Will Vertex be forced to accept a hostile bid by shareholders? I doubt VRTX management would do so without resisting it strongly first. IMHO, should J&J Novartis or Pfizer be interested in acquiring VRTX as well, a bidding war would make a buy out of VRTX more likely.