Gilead is recruiting Egyptian GT 4 HCV patients for a Phase III trial that treats them with Sofo and Riba, not with Sofo and Led. It is known that 7.8% of 62 million Egyptians are infected with HCV and 90% of them are infected with GT 4. The number of HCV patients there is greater than the same in the US. Their selection of GT 4 and cheap Riba for Egypt indicates that they are serious about treating with and marketing Sofo in Egypt in future. How is that so? Gilead paid dearly for their “nuc”, and it’s their imperative to sell as much Sofo as they can before competition appears, even if that meant to undersell the competition (such as VX-135). They are also serious about selling Sofo in Japan; they set up a new Gilead branch office in Japan.
While Japanese HCV patients can afford to have their insurance companies pay 40K per treatment, Egyptians cannot have their government pay 40K. What is then Gilead's calculation underlying the Egyptian GT4 trial? Gilead might be planning to undercut the prices of other future drugs to capture a good portion of 20B world HCV market, not with their NS5A inhibitor, but with the low cost Riba. However, they cannot afford to lower the price much because they paid 11B for Sofo. It is Gilead’s dilemma, Vertex does not have with VX-135. The combo VX-135 + Riba is not as effective as VX-135 + Daclatasvir, but the combo can cure a lot of people in India, China, and Korea. If a price war develops in 2016-17, who will win?
Another point. An RBC analyst thinks that Bristol will not partner with Vertex for commercialization of VX-135 and Daclatasvir just because Bristol does already have a polymerase inhibitor. However, he is wrong. Bristol’s nuc is non-nucleoside inhibitor and it is not as effective as a nucleotide-analog inhibitor such as VX-135. Bristol will need VX-135.
Sarepta has so far shown that Eteplirsen may stop deterioration of DMD in some of 6 patients and 4 rolled-over placebo-taking patients. I would like to see that the company runs a large blinded Phase III trial and show positive results before invest in the stock. PMO technology is intriguing, but its value has to be proven.
It is possible that people enrolled early might be dosed or very close to being dosed. It took one year to reach this point from the Ph II results. There must be many reasons for the delay. I gave only one possible reason for the delay.
The Vertex people who are in charge of designing and executing the trials are aware of the importance of antibiotic effects. As an indication, Vertex is running a Ph I trial in healthy subjects, in which drug-drug interactions btw three distinct antibiotics and 809/770 are monitored. The antibiotics are ciprofloxacin, itraconazole, and rifampin. More importantly, they should examine the direct effects of these antibiotics on the trial participants' FEV1. They must be examining this systematically in Phase III although the details are not described in the trial protocol.
I should add that the antibiotic effect was minimized in Ph II for 809/770 (but not entirely eliminated) and also for 661/770 because the combo drug dosings lasted only for 4 weeks and the control of dosing the combo with respect to the antibiotic dosing was straightforward. Of course, it is not known the degree of participants' compliance to the rule. All of details, at least for 661's case, should be reported when the results are presented in future meetings. It is almost shocking to see the executives were totally unprepared to answer this important question when 661/770 data were released (one analyst asked the question).
Win and Q, it has been a year since the first full data from Ph II were released (though there was a mixup). The reason it is taking so long to start Ph III must be related to the complexity of the trial design that can satisfy the FDA. The FDA must be demanding, as it should, that Ph III trial should isolate the effects of antibiotics and of pulmozyme from the effect of the drug combo. It is complex because different participants take different antibiotics and some don't take at all. You would need many arms and subarms to control the objectivity of the trial outcome. Besides, they don't take the antibiotics at all times; there are on/off cycles. One could alternate a 4 week antibiotics “ON” cycle and another 4 week “OFF” cycle during the 24 week trial for participants who need to take, and require all to synchronize the first antibiotics off cycle to the initiation of 809+770 dosing for each type of antibiotics. Hopefully this scheme could isolate the effect of antibiotics from the effect of study drugs. Q, what do you think? Am I talking nonsense?
It is good news. Vertex is moving this combo ahead of other combos. Two blinded trials testing the 135+Riba combo started enrollment last November. In both trials the drugs were dosed only for 12 weeks. By now at least some of the participants are unblinded. This means that 135 is safe when dosed together with Riba for 12 weeks for some at least. Its efficacy should be as good as Sof if not better.
If the 135+Dac combo is safe, it will be as good as Gilead's Sof+Led combo. Apparently drug-drug interactions are not a problem for this combo if listen to the last conference call. Dac has minimal sides. So, if 135 is safe, it is likely that the combo 135+Dac would be safe. The efficacy of the combo should be high.
JF, you are too generous. You are a good investor. I am learning from you. I'll convert some of my positions into bullish put spread configurations as you suggested.
I lost several hundred VRTX shares because I had sold April call options with the expectation that 661 results would not be reported until June. If the market deteriorates during the summer months I should be able to buy back the shares from the sold put options.
It is gratifying to see people like you make money from the bullish trades. It is most likely that we'll have another pandemonium next year when the FDA approves Lumacaftor (=vx-809). Safe and efficacious outcomes from any of vx-135 combos and from vx-509+methotrexate would raise share prices too.
Good luck to you.
JF, you deserve my congratulations for having locked in a 800% gain (for a short time span). Your posts indicated that you have vast knowledge of options. I rarely buy call options, but instead sell put options. The profits are bound by the premium, but has the advantage that you can buy the shares cheaply when the stock price closes below the striking price of the put option at expiration. I buy most biotech stocks by selling in-the-money puts. Most biotechs have huge premiums for puts, and you gain the premium if the put expires worthless as you know better than I do. I have sold total hundred contracts of out-of-money Vertex put options of all months. I might be able to buy more VRTX shares. Good luck to you.
Gilead just started treating co-infected patients with sofosbuvir and ribavirin for dosing durations of 12 and 24 weeks. Like their other trials this is an open label Phase III, to be completed July next year. The regimens do not include interferon or GS-5885. I don't expect the result would be good for GT 1 patients.
Many docs and patients think that an all-oral and effective drugs will be available before the end of the year. 7977+riba will be approved for GT2 patients who cannot tolerate interferon, but this duo combo is not good enough for GT 1 as you may remember. They will be very disappointed. I think you are right in thinking that incivek will be used in treating co-infection, and also cirrhotics through late 2015 or early 2016 when 7977+5885 is approved.
Gilead's sofosbuvir and Bristol’s daclatasvir [=BMS-790052] could make a happiest couple in the world if Gilead did allow sofosbuvir to wed daclatasvir. Read today's PR. But, Gilead said the dowry is too expensive and prefers a home-grown boy NS5A inhibitor. So, Bristol decided to screen VX-135 as a potential mate for daclatasvir. I have a hunch that VX-135 is as safe if not safer, and as potent, as sofosbuvir.
There is a good reason to believe that inhibitors of NS5A and NS5B work together very well. A NS5A inhibitor is not just the disruptor of HCV replication complex. Just as protease inhibitors (like incivek) disrupt HCV's ability to evade host's immune response, NS5A inhibitors can also foil HCV's attempt to sabotage host's immunity, but in an independent pathway from protease inhibitors.
Successes of all-oral HCV's non-structural protein inhibitors validate the concept that the currently developed DAAs have the immunological mechanism components, so that they can effectively replace interferon and ribavirin.
If you are new to Vertex, I have to tell you some well known fact. It has been Ian Smith's habit to sell into rallies for many years. He sold at 30s and also at 40s. It appears as if he is more concerned about cash in his pocket than shareholders. Do you think he sold at 30s because he knew that the share price would go below 30? I think that in the near term the share price would correct somewhat since it ran up a lot in a short time span. But many of us old-timers look beyond the immediate future, and speculate the share price two or more years from now.
It is true that Jim Cramer does not understand biotech sector as well as he does the retail or oil sector. But he has some good people working for him. Adam Feuerstein is one. AF gathers information given by good analysts. AF thinks that the sales from corrector/potentiator combination for 508 mutation will top 5-6 B/year easily, and Vertex will enjoy monopoly of selling them. Because of this he thinks that the Vertex' position is better than Gilead's.
6 B figure is still too conservative if 809 or 661 is safe to be dosed for a long term as data indicates so far.
Cramer uses the cost of 809/770 combo to be 200k/year, but of course, the price tag for 770 alone is 300k/year. Even if you take the 200k figure, there are 50 thousand people with 508 mutation worldwide. If you multiply 200k by 50k = 10B without including people with 770 treatable mutations.
Today's news on the potency of VX-135 on HCV GT 1, 2, 3, and 4 is impressive -- it is better than that of GS-7977. No wonder Bristol decided to have their treasure BMS790052 to be tested in combination with 135. If the two Phase ii trials go well, there is a tremendous opportunity.
You are right for 2013-2014, Wave. Expect a lean year for 2014. They could make 1B just barely in that year. However, when VX-809 (Lumacaftor) is approved for marketing next year and launched late that year or early in 2015, the revenue will zoom to 3.5B (take-up will resemble the speed of Kalydeco adoption). VX-661 is better than VX-809 only because it does not induce Cytochrome P450(CYP4A) as much as 809 does, and require only 150mg of Kalydeco/day (809 needs 250mg of Kaly; CYP4A degrades Kaly). Otherwise, VX-809 is just as effective as 661 in improving FEV1 lung function post 28 days of the combo dosing. Good luck to you.
Verity, it has been known for more than a decade that the NO (nitric oxide) level is depressed in CF cells and restoration of the level can help the cells transport more Cl ions. An old paper attributes the effect to an activity of molecular chaperone, mediated by NO. Even if N30's drugs may not repair CFTR at its root, they may increase the number of defective CFTR in the cell membrane, and also reduce lung inflammation. Anti-inflammatory effect has been well established with GSNO class drugs. So, to answer your original question, their drugs can act synergistically for some with a suboptimal corrector/potetiator response.
Yes, 661 is certainly better than 809.
The next catalyst for the CF program is the Phase I and II trials for VX-983, the third corrector. If it is also safe and effective, they will combine 661 with 983 to strive for a 10% absolute FEV1 change for all 508 patients.
The trial was a doubly blinded, thorough dose escalating study, and not small in participant numbers. If Sarepta Phase II is good enough for an FDA approval, VX-661 would certainly qualify for an marketing approval on this Phase II.
My estimates were very conservative. We may see a yearly revenue of 10B or more in 2017.