John, the one you heard was reported yesterday by CNBC quoting Oppenheimer's call. The BofA call was released this morning before open. It is very likely a call made by Rachael McMinn. She is an expert in Vertex.
DFC, you are right. The results from VX-661 + Kalydeco trial for CFers with G551D in one allele and F508del in the other allele will also be reported soon. If the in vitro result is translated in clinic, it will be spectacular. A paper says 72 % of 551 CFers have F508del on the other allele.
The [global opportunities] I quoted was originally from the CFO Ian Smith two CC ago. He was speaking of VX-135. He can do the algebra.
Suppose that Vertex price VX-135 at 5000 per treatment. I know it is outrageous, but it can happen if more than 0.5% of 170 million worldwide Hep C patients decide to treat each year. It will take more than 200 years to treat all of them and newly infected at this slow rate.
$5 K x 170 M x 0.005 = 4250 M
If VX-135 is priced at 10 K per treatment, the potential sales can reach 8.5 Billion.
Japanese and S. Koreans would be happy to pay this price. In a few years Chinese can afford to pay.
The fact that Vertex is pursuing VX-135 development indicates to me that VX-135 is safer, more efficacious than Incivek (and pangenomic). That is what we need globally. J&J really need VX-135 because Simeprevir when used with IFN + RBV cannot cure Q80K mutation in GT 1a (I think that that is why they bought the global right to Incivek) .
CCO is placing his bar above Sofosbuvir. VX-135 does not have to be superior to Sof in every respect.
I wanted point out that global opportunities for [VX-135 + Daclatasvir] and [VX-135 + Simeprevir] are enormous. Even if the SVRs turn out to be less than 90% and prices are discounted, they can generate multibillion dollars for Vertex, J&J, and Bristol. Analysts and the market do not assign any value to pangenomic VX-135. That does NOT mean that VX-135 has no value.
An abstract from Science News This Week (Dec. 13).
[[ Jon Cohen
A new, remarkably powerful drug that cripples the hepatitis C virus (HCV) came to market last week, but it sells for $1000 per pill. The drug, sofosbuvir, must be combined with other drugs and used for 12 weeks to cure an infection, a regimen that only wealthy countries can afford. Advocates are urging Gilead Sciences, sofosbuvir's manufacturer, to sell the drug at a steep discount to cash-strapped countries, which are home to more than 100 million HCV-infected people. And they want Gilead to offer this differential pricing today, not several years from now, as happened with the anti-HIV drugs that revolutionized AIDS treatment.]]
Even if it does, mutations can occur only in few cells out of trillion body cells in a CF person. For this reason, I am confident that the two Ph III trials of 809/770 will show strong efficacy and would be more than replicate the efficacies of the two highest doses given to Cohort 2 and Cohort 3 of Phase II. Besides, because the drug action mechanisms of VX-809 and VX-661 are the same, good results of VX-661 not only support the results of VX-809 and vice versa, but also strengthen the validity and statistics (p-value) when the two data sets are combined.
Vertex’ fundamentals will easily surpass Alexion’s next year.
Company’s fundamentals and its perception by market participants should determine its share price. However, quite often the share price can determine the perception of the company to project distorted sentiment. I chose two similar biotech companies to contrast the differences.
Even if Van Goor had never invented VX-809, VX-661, and second generation correctors, Vertex could be profitable with Kalydeco alone with annual revenue and earnings similar to those of Alexion Pharma (= $1.4 B and $1.7/share, respectively, provided Vertex downsizes to the Alexion workforce of 1300 employees). The market cap of ALXN is 24.6 B as of last Friday. Alexion has only one drug Soliris for two rare indications, PNH and aHUS. Soliris is humanized mAb(=monoclonal antibody) to target C5 of complement system. It enjoys monopoly in treating the two indications now, but may face a serious challenge from Alnylam’s ALN-CC5. ALN-CC5sc is subcutaneously deliverable RNA drug and has the advantage over a mAb. Alexion is however developing other mAbs in phase I and II trials.
On the other hand, Vertex is conducting two VX-809/770 Phase III trials and Phase II trials that include a VX-661/770 trial. Both of these two combos have tremendous market potentials.
Several weeks ago at the NACF Conference 2013, it was reported that a long term use of Kalydeco was efficacious and safe. Kalydeco on G551D patients were shown to be effective and have NO tachyphylaxis (=drug fatigue) over a period of 144 weeks. There are molecular level reasons for this. Drugs targeting cancer cells, or virus, bacteria encounter tachyphylaxis after a short or long-term use. This is because genome in cancer cells, viruses, and bacteria are fundamentally unstable and target segment of genome can mutate. On the other hand, CFTR gene is stable and its mutation is rare events as we know, and the chance that target gene segment will mutate again during a lifetime of patients will be extremely unlikely. [contin']
It is going to take a long time before human race is freed from this most dreaded disease. But one day in a distant future an oral tablet combo may be able to turn off the arsenal that cancer cells employ (BMY's drugs have to be injected and have severe side effects). Positive effects of such drugs is that people will live happier and more productive lives.
Many big pharmas and biotechs are developing cancer drugs and the competition among them will keep the cost down, and at the same time keep societal burden to the minimum.
Whose oncology are you referring to? Both BMY and VRTX are pursuing cancer drugs right now. The future is in immuno-oncology. Right now, monoclonal antibodies are used in targeting toxins to cancer cells (SGEN, IMGN) or in blocking evasive ploy cancer cells use (BMY's Yervoy and PD-1 inhibitor). I speculate that Vertex is working on a small molecule blocker of immune evasion deployed by cancer cells. If this is true, it will be revolutionary. They are going to talk about new drug candidates in the new year.
JF, they are already partners in 135+Daclatasvir, but you are right; an outright buyout would not happen unless VRTX fails in all drug development. As I said before, VX-135 and Ribavirin are antagonistic, and didn't give meaningful SVRs, but Daclatasvir is an outstanding NS5A inhibitor and it must be a good partner drug for VX-135. The SVR12 has to be 90% or better for all viral genotypes in a dosing duration of 12 weeks or less, and the combo has to be safe and very well tolerated, if the partnership with Bristol is going to continue. If the combo works out, Vertex should consider buying Daclatasvir from Bristol. Bristol is no longer developing Hep C drugs in order to concentrate on oncology drugs.
Happy Thanksgiving to you, Q and others.
I am reiterating below what you wrote, and added what I think the Hep C program will be.
1) FDA approval of Kalydeco use for non-G551D gating mutation will be coming at any moment now. The data were better even compared to that on 551 mutation. The number of patients benefit from this label expansion is 400 according to the latest Form 10-Q.
2) Ph III results for Kalydeco on R117H will be reported within the next few weeks. The data will be good and an sNDA for this label expansion will be realized in early 2014. The number of patients benefit from this label expansion is 1100 according to Form 10-Q.
3) Data from pediatric formulation of Kalydeco for 2-5 year olds with all gating mutations (300 in this group) are due in Q2 2014, and NDA is scheduled to be in H2 2014.
4) Kalydeco data for residual function mutations are due in Q2 of 2014. There are additional 3000 CF persons who will benefit from this label expansion. There are plenty of anecdotal evidence that the results will be positive.
5) Form 10-Q again says that the data from VX-809/Kalydeco Ph III will be coming in mid-2014. I think the date will be just before the ECFS meeting (June 11-15) where they could be presenting a plenary talk. But some preliminary data could come much earlier, triggering a mammoth rally. An approximate number of homozygous 508 CF persons who will benefit from this combo is 28,000. The Kalydeco revenues from this combo could reach 5 billion annually adding to the 1.5 billion from Kalydeco-monotherapy responsive indications, earnings per share reaching 20 dollars each year beyond 2015.
6) Data from VX-135/Daclatasvir will also be released in early next year. The data will be spectacular. Long time ago, an RBC analyst estimated that the success of this combo can add $10 to the share price, but you know that is too low. If this combo is as good as the Gilead’s best, annual revenue could reach billions.
JF, they are confident that both VX-809 and VX-661 will improve FEV1 greatly as shown in Ph II trials. CFO Smith said in the last CC that the Ph III trial is going really well. There are a few reasons why analyst like Porges thought that the 809 Ph II data are not as good as the 661 Ph II data. (1) The 809 data were noisy; the numbers of patients were around 20+ and individual variations are large, (2) Because of (1), the dose-response is not obvious. However, the trend lines for 600 mg qd and 400 mg bid groups are ascending lines are parallel to each other AND clearly above the lower dose trend lines. I don't think Porges has seen the slide comparing 600 mg dose group and 400 mg bid group (Cohort 3). To confirm this, sign in to InvestorVillage site and look at the data again. (3) Many people would think that 5 % change in FEV1 is a small improvement. One should remember that Kalydeco improves FEV1 only by 10%. However, the quality of life change is transformational as you have seen in the video and read stories about the physiological changes.
While they are on Kalydeco, they don't have to take pancreatic enzymes to digest food, they don't have to take multiple antibiotics as often, and they can concentrate on daily lives like other people do.
Even if Van Goor has never invented VX-809 or -661, Vertex can be profitable. If you add all Kalydeco-monotherapy-responsive mutations you come up with 15%: all gating mutation incl. 551 = 5%, R117H = 3%, residual function mutation = 7%. 15% of 70,000 is 10500 CF persons. Subtracting those who cannot be reached, Vertex says Kalydeco responsive group size is 7000. This means that annual revenue can be more than 1.4 B. Vertex' annual expenditure will be below 1 B per year. There will be 400 M profit.
My gut feeling says the probability is 95%. It comes from Ph II data of 809+770 and 661+770. Because 809 and 661 target the same location on CFTR molecule and the action mechanism is the same, the efficacy of one molecule reinforces the efficacy of the other. This improves the probability of success of both.
It may take many years but the Exon-skipping technology looks very promising. Sarepta will do well with DMD and others in the future. Question is: does SRPT have enough cash to sustain research and development?
Because the trials are doubly blinded, the investigators would not know who is taking the drugs and who is taking the placebo. But if the average goes up, you know that the rise must be caused by the drug-taking group. The body weight of group taking placebo would not change much when averaged over a long time.