In advance of the annual ARA meeting next month, abstracts of clinical trials being presented are likely to be published next week in the October issue of Arthritis and Rheumatism, the ARA's research journal. I expect the VX 509 data in RA in combination with MTX will be positive, and hopefully so will the study looking at MRI of joints in RA patients treated with VX 509 as well. Perhaps we'll get an announcement on the licensing/co-development deal that Vertex execs have been seeking to expedite the development of VX 509 in multiple autoimmune diseases.
Last investor conference call has stated that a new molecule will be coming to pipeline next month and at the beginning of next year. Any clues?
I believe it is for Huntington's Disease
Also second generation correctors to use in combination with VX 661 or 809 to treat heterozygote 508d CF patients.
Most likely, the time was moved to accommodate scheduled commitments of key participants in the conference call. The time of day of the conference call really does not have a material effect on how the market reacts to whatever news is released that day. The most important information will the progress of enrollment of the Phase 3 clinical trials for treatment of CF for both expanded Kalydeco monotherapy indications, and VX 809/770 treatment of the 508d homozygotes, and any updates on the timeline for the projected approval of CF treatments. With all due respect for Cross (I appreciate your point of view and share your frustration) , but VX 509 clinical trials treating RA, may still be released as 'latebreakers' at the ARA meeting on Oct 26 (per the meeting's news release 'embargo rules' and could be discussed at the conference call, along with, any licensing deals for 509 or 787 for these drugs further development in partnership with a larger pharma. Maybe it's like 'Waiting for Godot' and in the end I'll be disappointed, but given the history of the delayed release but ultimately positive results of Vertex's Phase 2A clinical trial for VX 787 announced in the first quarter of this year, I would not completely eliminate it's potential to generate a partnership agreement for either 787 or 509 as well, until after the pending RA clinical trials are released later this month. Lastly the future of VX 135 will be scrutinized by the analysts as VRTX management reveals the safety and efficacy data for the ongoing early Phase 2 trials in combination with RBV, and the BMY and JNJ drugs, with some of those results possibly available as 'late breakers' at AASLD next month.. That along with a discussion about whether there will be any future niche market for Incivek to treat certain 'hard to treat' hep C subpopulations (e.g. post transplant and HIV co-infected) will determine whether Vertex will be getting out of the hepatitis C market altogether or not.
If 135 is not going to be competitive, it's better to cut one's losses on 135 and shift resources earmarked for 135 (as well as from ineffective promotion activities devoted to dwindling Incivek sales), to more rapid development of 661 and second gen cf correctors, where there is no competition even close, and tremendous need/demand for 'breakthrough' treatment. The investment community will probably reward share price if management shows focus on the drugs in development closest to approval with the most commercial promise ie CF treatment with Kalydeco in expanded monotheapy indications and in combination with 809 and 661. Once those goals are met one can then self-finance earlier stage drugs in development in the pipeline, for other diseases but deferring clinical trials on those earlier stage drugs makes sense until the company gets cash flow to fund them In the meantime any licensing of VX 509 or 787 will certainly be a financial boost if it includes upfront payments from partners, in addition to paying the costs of their development worldwide.
That would be ironic... MRK trying to acquire Vertex, the company Joshua Boger founded when he resigned as head of Merck's medical research division over 20 years years ago.
By mid 2014 data to treat 60% of CF population will be released with FDA approval likely very quickly, and sales ramping up in the second half of 2014. Great news for CF patients and Vertex investors.
Listen to the investor conference tomorrow at the NACF meeting at 12:45 PM MST and decide for yourself. It's available on the Vertex website:
Events & Presentations
Vertex Pharmaceuticals Incorporated Investor Event at NACFC
Oct 18, 2013 at 12:45 PM MT
As I recall, the intent of management was to announce the results of this trial, and then use the strength of these results to negotiate a better (more lucrative) licensing and development deal with a potential partner. That still may take some time..... maybe after the ARA meeting next week?
Assuming Phase 3 clinical trials continue to show comparable efficacy compared to the competitors in this market, the preference to use this drug will be based on it's safety profile compared to the competition, and the formulary preference of group purchasers (often price driven all other things being equal), and the effectiveness of marketing by the pharmaceutical company to prescribers, health plan insurance purchasers and individual patients alike through company drug reps and the lay media respectively. One last thing that makes drugs like VX 509 likely to be successful commercially (once approved) is the fact that the diseases it is used to treat are chronic ones that have a high incidence of falling to respond to older treatments over time, creating the need to try newer treatments to replace older ones that are no longer working. This insures a steady and growing population of patients who benefit from the use of these newer agents over time. Dr Leiden knows this potential very well, having been the executive who brought Abbott the rights to develop injectable Humira to treat these diseases when he worked there as head of it's pharmaceutical division. Now he has the opportunity to develop a similarly effective drug at Vertex, (with the help of a larger partnering pharmaceutical company) and market it as an effective choice with perhaps a better safety profile, and of course the ease of once a day oral dosing as rojospan points out, Humira is one of Abbott's biggest commercial successes, and VX 509 could be a similar world wide commercial success for Vertex (even when shared with another pharmaceutical partner) in this evolving therapeutic market
October 21, 2013
09:42 am ET ... S&P CAPITAL IQ KEEPS BUY OPINION ON SHARES OF VERTEX
PHARMACEUTICALS (VRTX 77.06****):We keep our $104 NPV-based target
price. VRTX reports positive Phase IIb data for pipeline candidate JAK3 inhibitor
VX-509 in rheumatoid arthritis.We see efficacy as promising, with statistically
significant response improvements over placebo. Despite a higher adverse event
rate over placebo, there were fewer discontinuations, and we think its safety is
consistent with peers.We expect VRTX to out-license VX-509 for late-stage study
and, despite an outlook for a competitive market, we view the rheumatoid arthritis
market as lucrative and likely to attract partnering interest. /S.Silver
Wells Fargo maintained an Outperform rating on Vertex (NASDAQ: VRTX). The stock declined early on Tuesday after the company announced workforce cuts. In the view of analyst Brian Abrahams, the news was not a major surprise and the decline appears to be an overreaction.
"We believe this morning's weakness in VRTX is inappropriate and represents a buying opportunity for a fundamentally solid long-term story with multiple upcoming potential catalysts," said Abrahams. "Overall we did not see any major surprises on the call; we believe the continuing Incivek decline and cuts to the commercial team were mostly expected and should help the company improve its future CF franchise leverage (though some may have hoped for a more extensive restructuring)."
"Though today's SVR data for '135 was difficult to interpret and does suggest the 200mg dose (which is closer to the less welltolerated 400mg dose) is more potent, we note that '135+RBV is not the goforward regimen and in GILD's ELECTRON study arm for sofosbuvir containing a more similar mix of IL28B genotypes as VRTX explored in its '135 Moldova study, the SVR rate for sofosbuvir+RBV was only 10% (albeit in nulls rather than naives). As such, we believe this ‘135 program remains viable, and still see a reasonable probability that expected Q1 2014 data in combo with daclatasvir will demonstrate competitive SVRs," he added
Don't discount the strategy of waiting for a 'better deal' to partner 509 and 787. Remember a license or partnership is worth more if 509 proves to be even more effective with a clean safety profile at 24 weeks rather than at just 12 weeks, so waiting a couple of more months for that data might make potential partners more interested and willing to pay more for partnering in the drug's development. Similarly, if this years flu season is a bad one and Tamiflu resistance becomes a concern, 787 could become much more valuable asset by just waiting another couple of months before trying to close a deal with a potential partner.
Third, in addition to more than doubling mono-therapy revenue from the expanded label for using 770 in qualifying groups of non 551 CF patients in the first six months of 2014, we can anticipate the six month data from TRAFFIC and TRANSPORT trials will be available in May next year based on completion of enrollment of these Phase 3 trials last month. The third quarter conference call predicted NDA filing for 809 in mid 2014, and with breakthrough drug designation for 809 and 770, the FDA will rapidly approve their use for 508d homozygous CF patients before the end of the third quarter in 2014. Count on rapid growth of 809 sales to make the 2nd half of 2014 pivotal in terms of positive cash flow at Vertex, and with EU approval to follow, the growth in CF revenue will continue through 2015 and beyond, with the potential for additional revenues from 661, second gen CF correctors, 509 in autoimmune disease, and even 135 in treatment of hep C possible following NDA submissions for these drugs
I'm not sure what turned Geoff Porges, the Bernstein analyst, negatively toward Vertex since he had been a fervent bull in the past. He admits the restructuring of the company's Incivek franchise was expected. So why would he now have such a cautious opinion towards 809, when every analyst raised their estimation of success of 809 after the 661 data last spring validated the earlier phase 2 data with 809/770 treating 508d homozygotes? Is he, like the Goldman analyst, not seeing the validation demonstrated repeatedly using a CFTR corrector and potentiator in 508d homozygotes?
Third, thank you for all of your analyses of the prior 809/770 Vertex data and the new emerging science using miRNA technologies to correct CFTR function disclosed at the NACF meeting last month. Regardless of the potency demonstrated using 809/770 in earlier clinical trials, analysts like Geoff Porges seem to believe 661 is superior to 809 in combination with 770, even when adjusting dosing of 770 to offset pK drug interactions between 809 and 770. Perhaps as most TRANSPORT AND TRAFFIC patients finish their six months of treatment in the first quarter of next year, investigators will be reporting that as their study patients go off 809/770 at the end of the 24 week treatment protocol, they will no longer have the benefit of the study drugs, and consequently, there will be having a noticeable decline in their health. This should prompt Vertex to report to the FDA the obvious benefit of the study drugs while the study is still underway. Under these circumstances, the FDA has in the past has allowed an earlier than scheduled unblinding of the data on a compassionate use basis, to allow study patients in the control group and those who went off treatment with study drugs after 24 weeks, the opportunity to resume study drugs in long term 'rollover' studies to maintain their health, and accelerate the approval process of these critically needed drugs by allowing earlier NDA submission.
Given the share price weakness, the VRTX pipeline worth (according to S&P analysts) up to $7 billion a year for CF alone starting next year, could be bought out at a huge discount by a larger pharma needing new and growing stream of revenue and a strong R&D pipeline of other drugs in development.
But if they do work (highly likely based on Phase 2 data) it's an incredible value, with the rest of the pipeline thrown in basically for free at a 20 billion price. The headcount can be cut, the rents can be sublet if need be, but blockbuster revenues are nard to come by, and many large pharma need drugs like 770, 809, and 661 which will be likely successes for many years.
It's a good thing. I participated as a principal site investigator in numerous clinical drug trials in Phases 2 and 3 and 4 (post approval studies) and am well aware of the importance of proper screening of patients for selection in multi-year clinical trials. In such long term studies lasting multiple years like the rollover study, it is critical to enroll compliant patients committed to follow up appointments over the entire length of the trial. This requires screening those enrolled in the ongoing trials from which the rollover trials are receiving their patients, for those people most likely to res9de in geographic areas close to clinical trial sites for the duration of the study and are currently in sufficient good health to complete the trial lasting so many years. (In my experience the best compliance with long term trials tends to be in Europe where patients do not change geographic locations where they live as often as they do in the US.) Screening patients may afford some assessment of suitability for patients likelihood of finishing the trial, since drop outs lower the power of the statistical significance of the trial when final data is analyzed after trial completion.
Let's remember that the time frame for possible 'good news' starts next month with release of R117 CF trial results, and builds momentum as the analysts and wall street start factoring in the probability of increasing revenue from expanded label use of 770 and final approval of 809, by mid 2014., 509 and 787, and 135 licensing deals could be an 'unexpected' bonus for sentiment towards VRTX that could occur at any time going forward in the near future, since analysts have not given any value to them so far.
Interesting observations on risks regarding the leases at Fan Pier, but remember that a big part of the reason for the move was the elimination of operating inefficiencies of having the company's offices and labs separated at both Kendall Square and the Waverly locations, Also of course, the inducement in terms of city tax concessions that the city of Boston gave to Vertex saving many millions to defray the costs of the relocation from Cambridge. As I recall the Kendall Square leases for Vertex were very high rent for the times as well. Finally, if 809/770 Phase 3 studies deliver revenue in the second half of 2014, the positive growth trajectory of Vertex will resume, making the current contraction of the company a temporary one. The R&D division of this company has been the most productive and innovative part of it's history and will be the key to it's future growth. Consolidating the location of it's labs and offices will increase productivity and efficiency in the R&D process.