Week of April 29: Vertex first quarter conference call: Anticipate announcement of timeline of 809/770 approval process and marketing plan as well as expanded label of 770. Likely to comment on 661/770 development plans including 3 drug combination with second corrector to treat 508 heterozygotes, and anticipated timing of readout of 661/770 Phase 3 clinical trials data. Also may get comments on non-CF pipeline drug candidates e.g. clinical trial progress in influenza and oncology as well as clinical trials planned for treatment of neurologic disease (spinal cord injury, Huntingtons and chronic MS).
809/770 FDA ADCOM meeting May 12, 2015 with endorsement of FDA approval
FDA approval 809/770 anticipated shortly after May 12 meeting with pricing in the US announced shortly thereafter.
EU Annual CF meeting June 10-13 in Belgium. Vertex clinical trial data presentations to support approval of 809/770 outside the US and approval of the expanded use of 770 mono-therapy in non 551 gating mutations and residual function mutation patients and children ages 2-5 in in 551 and other responsive mutations
Investors either anticipating better than expected 1st quarter revenues which will likely accelerate over the rest of this year, or perhaps takeover speculation over DXCM being acquired by a larger company wanting to own the leading CGM technology.
Apple wants a presence in personal health care with wearable health care monitoring, and DXCM share product already programmed for app to i-phone and i-watch. Good product synergy with lots of growth potential that could be be adopted by millions of diabetics worldwide. Google has similar aspirations with their android phone and google glass. Would either make a takeover offer?
AF from TSC wrote last year about Porges, the analyst from Bernstein a year ago, who was saying 809/770 won't work following the EU CF meeting and drove the share price of VRTX to the 64 dollar range. Now he writes that Porges values VRTX at least $180 per share on the strength of the very same CF drugs, and should be bought out by GILD for that price. (Of course once again giving little or no value to the rest of the VRTX pipeline). How come AF is not recalling in his article today the Porges comments from last year?
I agree that historically VRTX has resisted buyout, but there is a price for everything if it's high enough, and a hostile takeover may be possible depending on the wishes of the institutional shareholders who would control the voting of such a merger. However, IMHO VRTX shareholders long term would do best if the company remains independent. If Geoff Porges, who a year ago said 809/770 was not going to be commercially successful, now says the company is worth $45 billion today on the strength of the very same CF drug and GILD acquiring VRTX at $180 per share would cause a rise in GILD share value, that of course implies that VRTX is worth a lot more than $180 per share or why would GILD bother to pay that price? So I hope VRTX does not get a take out offer and that it's entire pipeline is discussed this week at the conference call on April 29 to show the much greater growth potential that VRTX has coming from both it's CF and non CF assets.
Low ball offer considering potential future growth for WX contract pharma business both in China and in the U.S. They will also be entering patent pharma business in China, a huge future growth market. Taking them private now is an opportunity for the private equity group to gather the shares back cheap and in a year or two reissue them in a new public offering at much higher value. Existing shareholders being shown the door after they took all the early risk when the company went public a few years back, with the private equity group now ready to buy the company relatively cheap as the company is about to transform itself into a major pharmaceutical company with much greater growth and earnings coming in the next few years.
Dr. Li part of the private equity group making the offer. He'll get paid at both ends. Former Goldman manager heads the private equity group. Interesting timing for offer considering GS removed WX from it's focus list, downgraded the company and lowered it's target price just a few months ago, driving WX share price to the low 30's at the time. I wonder who was buying up WX shares $10 cheaper a few months ago?
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.
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.
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!
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?
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.
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.
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.
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.
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?
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.
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!
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.