Analysts finally starting to give value to the Vertex pipeline
Vertex stock price and the options call/put action reflect investors optimism in anticipation of future positive catalysts for the stock which in the short term include:
1. Clinical trial results of VX 661/770 Phase 2 study in CF
2. Announcement of a lucrative deal partnering VX 787 snf VX 509 with a larger pharma.
3. Eventual addition of Vertex to the S&P 500 (recent Forbses article last week pointed out the Vertex market cap exceeds that of companies with the lowest market caps already in the S&P 500 e.g. Humana.
4. Aniticipation of both VX 509 Phase 2 clinical trial results in RA in the second half of the year, and the six month read out of Phase 3 CF trial results with VX 809 and 770 by year end or the first quarter of next year, with Breakthrough drug designation allowing early approval of VX 809 with 770 in 2014 by the FDA.
IMHO the mutual funds who bought over 25 million shares of VRTX at over $80 a share after the 661/770 data was released last month, will easily buy up the 8.2 million shares of Vertex that may be sold by current bond holders after VRTX calls in the bonds and converts them into shares. The price of those shares IMO will probably be right where the shares have been trading the past week, if not higher,, and are likely to move up from the current price as the shorts, who have been betting on a further price drop, scramble to cover when that price drop fails to materialize. In the next two weeks we'll see how this works out. Intermediate, to long term investors will be glad to have bought shares at current prices.
ä 04/19/13 09:20 am ET ... S&P MAINTAINS BUY
OPINION ON SHARES OF VERTEX PHARMACEUTICALS
(VRTX 52.87****):We raise our
NPV-based target price by $40 to $100, as VRTX
reports positive Phase II data for a VX-
661/Kalydeco combination study in cystic fibrosis
(CF) patients with two copies of the Fdel508
mutation that we think significantly lowers
VRTX's CF program risk.We view lung function
improvement up to 9% over placebo as robust,
bolstering our confidence in the ongoing Phase
III VX-809/Kalydeco study.We think that both
programs, if confirmed in Phase III, would warrant
expedited regulatory approvals, premium
orphan pricing, and peak annual sales over $6B
for this patient group. /S.Silver
Rojospan. We'll get a clearer read from Vertex management of how 809/770 enrollment is proceeding at the CC on Tues. The clinical trial.gov website lists 110 international sites enrolling about 1000 patients. Not a small logistical feat for any pharma studying so many parameters in a very sick patient population. I suspect however enrollment will be complete before the end of June, given the time elapsed since announcement ot a registration path, and the high interest in CF patients for being in studies that could halt the progression of their otherwise terminal disease. Verity might be able to give us information from her perspective as to how quickly this study is being enrolled from the CF patient family's point of view.
I hope we'll also get some information on Tuesday regarding the timing of initiation of clinical trials using VX 135 with GSK, JNJ, and BMY's compounds, in pan-genotypic populations of hepatitis C. Gilead will have maybe one year before serious competition in next generation all oral treatment of hep C evolves from Vertex and it's potential partners, with potentially greater efficacy in all genotypes and hard to treat subsets of hep C.
Also, hope for news on Tuesday about the partnerships being negotiated using VX 509 for treatment of multiple autoimmune diseases, and VX 787 for treatment of both seasonal and pandemic strains of influenza. This latter drug as well as VX 509 has been largely ignored by analysts in their valuation of the Vertex pipeline, and any announced deal will give color to the potential revenue associated with each drug. Both compounds may have significant improvements for treating their respective patient populations over existing treaments in either efficacy and or tolerability. The ongoing evolution of mutaions of avian H7N9 influenza currently being monitored in China makes development of VX 787 particularly important if person to person transmission develops in this potentially deadly virus.
High SVR rates from past clinical trials combining 7977 with BMY's daclatasvir, makes the upcoming VX 135 and daclatasvir combo the Phase 2 trial of most interest among the hep C program at Vertex, and the fact that it is the first hep C collaborative trial getting underway this quarater by Vertex, makes it among the most important clinical data to be announced in the the second half of the year A twelve week trial would likely have results available for AASLD in the fall. That combined with Kalydeco Phase 3 trial results for non 55lD mutations due this summer and fall, and VX 509 data due in the second half, will create plenty of catalysts for VRTX stock over the remainder of the year. And of course announcements of any licensing or partnerships with VX 787 and 509 will likely provide milestone payments to Vertex which will enhance it's financial postiion while allowing more rapid development of these assests as well. Certainly news flow about the completion of enrollment of all the CF studies including Phase 3 809/770 as well as the remaining Kalydeco monotherapy trials will be of great intsserest as well, along with announcements of further trials of VX661 and 983 and newer second generation correctors to be combined for use in ther CF 508 heterozygotes in clinical trials next year. Lots of things to look forward to for the reaminder of the year!
VX 135 Daclatasvir combo trial posted on clinicaltrials.gov, not yet recruiting, but likely to start enrollment soon. 12 week interim EOT reuslts, and 4 week SVR data shoud be out before AASLD this fall.
Well worth listening to both his prepared remarks and the Q&A. Geoff Porges asked very good questions and they were all answered well by Dr. Leiden. They stock should regain momentum as the clinical data that will be released throughout the remainder of this year and into 2014 gets appreciated. Starting with CF data mentioned to be released next month at ECFS conference in Lisbon, and the Phase 3 770 monotherapy data and Phase 2 VX 135 and VX 509 data to be released in the second half of this year, and of course the Phase 3 809/770 data next year. The company will be licensing VX 787 before the start of this coming influenza season, and will partner 509 after release of the VX 509 Phase 2 data in the second half of this year. All these are catalysts that will likely push the stock price even higher.....Comments about recent insider sales were even discussed....Leiden's answers sounded positive for the future of Vertex investors.....Ian Smith is wanting to stay on at Vertex, even after selling 90% of his options for $60 million because he knows future option packages will be worth even more as the company conitinues to execute it's business plan, and bring it's pipeline of drugs to market. Enjoy the ride.......
Sentiment: Strong Buy
Instead of a buyout , long term VRTX investors would do better for the company to stay independent, with the stock likely to spike higher in the short to medium term with the eventual announcement of lucrative partnerships with larger pharmas to devleop VX 787 and VX 509. Then watch the stock fly as clinical trials start to be reported through the remainder of the year. Three Kalydeco monotherapy Phase 3 trials in non G551 mutations will be out this summer, and VX 509 Phase 2 trial in RA this fall, along with VX 135 all oral hep C treatments being tested with BMY, JNJ and GSK compounds. And of course, Phase 3 809/770 six month interim data due either at the end of this year or start of 2014, to allow NDA submission. With a nearly $18 billion market cap, expect addition of VRTX to the S&P 500, with the subsequent required purchase of VRTX by all the index mutual funds. Enjoy the ride.......
...and next year Vertex will be able to provide 'breakthrough' treatment for the majority of CF patients:
S&P analyst's remarks on May 1: ".We remain
confident in VRTX's cystic fibrosis program, with key F508del mutation sub-group
on track for '14 FDA filing. "
Count on expdited approval by the FDA in 2014 to treat close to twenty thousand CF patients in the US alone. That's multibillion dollar a year market. so 300 million of lost Incivek revenue won't be a huge problem going forward, and VX 135 will likely generate far more in the years to come. Then factor in the poetential for VX 509, 787, 661 983, and the second gneration correctors for treating the 508d heterozygotes with CF, and the future for Vertex is amazing.
Bof A Merrill Lynch investor conference presentation on Tuesday evening next week, will update progress of the Vertex clinical trials, highlighting Phase 3 809/770 enrollment, and Phase 3 Kalydeco trials for an expanded monotherapy label, with expected timeline to NDA filings and approval next year. With Breakthrough drug designation, rapid FDA approval is likely,(it was a mere two month approval wait for Kalydeco aftrer it's inital NDA filing in early 2012). That means treatment for more than half the CF patients in the US alone starting next year, rather than the 4% currently being treated. That's a multibillion dollar revenue stream from CF alone....add in the future CF revenue from Europe, and and possible revenue from next generation CF corrrectors as well as VX 661 and VX 983, to further improve the potential treatment available for the "personalized" treatment of CF in the harder to treat CF patients e.g. heterozygote 508d CF population. And then add in the potential of the rest of pipeline ...... VX 135, 787 509 in next gernation hep C, influenza and anutoimmune diseases.
It's no wonder mutual funds are supporting the stock at this level. In the meantime, standby for further announcements of lucrative partnerships with larger pharma interested in co-developing/marketing VX 787 and 509 with Vertex. Add in the over $1.2 Billion Vertex has in cash on hand, and the company is financially secure to pursue it's plans to develop it's pipeline.
What's next continued....
5. Final results of the positive VX 661/770 Phase 2 data at the fall national CF meeting, along with the announcement of second degneration correctors being initiated in clinical trials for use in combination with VX 661 or 983 to treat CF 508d heterozygotes. Also announcement of completion of enrollment of Phase 3 clinical tirilas using VX 809 and 770 in 508d homozygotes with completion of those results and submission for NDA approval to treat another 50% of the worldside CF population in the first half of 2014.
1. Phase 3 Kalydeco monotherapy clinical trials currently underway in G551 mutaion age 2 to 5 and non-G55l gating mutations, and those with residual CFTR function, will become availiable throught the summer and early fall. With breakthrough durg designation for VX 770, the expanded drug labell to treat this group of patients comprising an additional 10 percent of the CF population in the US, should be FDA approved by year end if not soooner.
2. Vx 509 Phase 2B clinical trial results in RA reconfirmed to be released in the second half of this year. I would expect a deal with a larger Pharma to be announced following release of positive results in this trial to allow rapid co-development of this asset in multiple autoimmune diseases to expedite it's development and monetize it in the short to intermedicate term with milestone payments, and in the longer term with royalties upon approval and sales in multiple autoimmune disease indications e.g. RA, psoriasis/sporiatic arthritis,IBD (Crohns/Ulcerative colitis etc.)
3. Announcement of a partnership to develop VX 787 for treatment of influenza with a novel mechanism of action, having clear advantages over Tamiflu and Releanza. (effective up to four days after onset of symptoms, superior efficacy in shortening duration of symptoms in seasonal influenza, and effective in tamiflu resistant strains of influenza). Once again short to intermedicate term monetization possisble with milestone payments and long term monetization for Vertex with royalties upon FDA approval, without the need for Vertex to spend money on development and reuglatory submission or a huge sales and marketing force after approval.
4. VX 135 Phase 2 studies with riba, Daclatsvir, and the drugs from GSK and JNJ/Medivir. Some resutls likely to be out in time for AASLD, and the drugs demonstrated to work best will be likely partner with VX 135 to co-formualte as a single tablet to be taken once a day in the for the shortest time period possible.
Another analyst giving more value to the pipeline at Vertex. Now the comopany just needs to post a posiitve clinical trial result or a lucrative collaborative deal with another pharma for VX 509 and 787 and the momentum will continue to gain steam for the stock. VX 661 interim data due before the end of this quarter.
Both 'transport' and 'traffic' K+809 Phase 3 studies started enrollment.. Check clinicaltrial.gov and type in VX 809 in the search bar and you can monitor the initiation of the enrollment progress at the various sites as they start dosing patients.
Bootpart, I would not worry too much about the time it's taking to announce partnerships to develop VX 787 and 509. The terms of the partnership, specifically milestone payments, royalties for future sales, and division of any shared research expense and regulatory submissions may be more favorable to Vertex with potential large pharma partners, if the management at Vertex waits for additional positive VX 509 clinical trial results due in the second half of this year, and for results of testing VX 787 sesitivity in H7N9 influenza vial isolates recently provided last month to the CDC by Chinese and WHO researchers. Obviously negotiating the best possible deal for these assests owned by Vertex will be more likely by demonstrating as much efficacy and safety in all the trials still pending both in the clinic as well as the lab where in vitro or in vivo animal studies of efficacy and toxicology studies are likely ongoing. The development of these assests going forward, and the regualtory approval process for their eventual sale worldwide will be costly and time demanding. The sales of these drugs worldwide will require both a large sales force and a large marketing budgetary committment. Negotiating these terms is best done with patience and the strongest data available to value the deals being made.
May 1, 2013
11:11 am ET ... S&P MAINTAINS BUY OPINION ON SHARES OF VERTEX
PHARMACEUTICALS (VRTX 78.02****):We keep our target price at $100. Q1
adjusted loss of $0.10, vs. $0.43 EPS inclusive of stock option expense, is
narrower than our $0.16 loss view, on higher revenues. However, sales declined
25% due to waning Incivek demand ahead of new expected hepatitis C entrants.
We narrow our '13 adjusted loss forecast $0.06 to a $0.77 loss.We remain
confident in VRTX's cystic fibrosis program, with key F508del mutation sub-group
on track for '14 FDA filing. With $1.24B in cash, we think VRTX is on solid financial
footing to invest in its pipeline for long-term growth. /S.Silver
Red, Best of luck with your child's results in the Phase 3 study. The clinicaltrials.gov web site states 3 sites are actively recruiting patients in South Dakota, Oklahoma, and Minnesota, with the other 107 sites 'not yet recruiting' so I suspect the IRB approvals are slowy coming along at each site causing the frustrating postponement of enrollment for some families like yourself, eager to start treatment. Please let us know how things are progressing for your child's enrollment and particpation in the trial, as we are all rooting for him or her to get well!
Another Vertex investor conference presentation at the Bernstein sponsored event next Wednesday. May include an update on CF study enrollment progress for Phase 3 809/770 and Phase 3 770 monotherapy clinical trials to expand treatable CF population with CFTR corrector and potentiator drugs. Also timetable for initiation of Phase two clinical trials using VX 135. Lastly possible discussion of collaborations for development of VX 787 and VX 509 with larger Pharma. Looking forward to some new information regarding progress on the promising Vertex pipeline..
FDA approval usually follows in a few months. New revenue stream year round from these molecular tests for HSV 1 & 2 and Varicella-Zoster.