Outgoing CEO Jeff Leiden takes victory lap as Vertex's Trikafta stuns Wall Street
The first set of quarterly sales for Vertex’s recently approved cystic fibrosis triplet — Trikafta — astounded analysts on Thursday, as outgoing company chief Jeff Leiden took his final lap in the “team sport” he calls drug development.
Six weeks into its launch the CF therapy has already become the top-selling drug in Vertex’s portfolio. Approved in October, quarterly Trikafta sales hit a massive $420 million (including a $100 million launch-related channel inventory build) in the United States — recording the strongest first quarter of sales for any drug, BMO Capital Markets’ analyst Do Kim estimated. Consensus Wall Street expectations for the regimen were a mere $70 million.
The company — long admired by a crop of analysts for its commercial prowess, ability to successfully pivot and overcome reimbursement hurdles at home and abroad — was heaped with a steaming pile of praise.
“(2020) Guidance also stronger than expected – and consistent with our positive thesis the company is executing on the commercial front and will drive industry-leading robust revenue and earnings growth over the next few years – best in the industry right now,” Jefferies analysts wrote in a note.
The cystic fibrosis drugs made by Vertex are the first treatments that address the underlying genetic causes of CF, which is characterized by thick sticky mucus in the lungs, digestive system and other organs that reduces life expectancy. Vertex’s medicines target the cystic fibrosis transmembrane conductance regulator (CFTR) gene and are engineered to correct the malfunctioning protein it makes.
A little over 300 different mutations are known to cause CF, and patients typically carry pathogenic mutations in both copies of the CFTR gene — the most common such mutation is F508del. The company’s Orkambi and Symkevi focus on the more common F508del mutation. The FDA approved Vertex’s triplet regimen, which is set to treat 90% of all CF patients — a spectacular five months ahead of its expected decision date in October.
Total sales from its quartet of CF therapies registered at $1.26 billion, handsomely beating consensus estimates by 26% driven by Trikafta adoption, SVB Leerink’s Geoffrey Porges wrote in a note, adding that Vertex’s 2020 top-line projection of $5.1 billion to 5.3 billion was also materially higher than Wall Street expectations of $4.8 billion.
Under Jeff Leiden, the Boston biotech has enjoyed a remarkable run of success after shifting focus from its initial hep C focus to CF. He will shift from his CEO role to the executive chairman’s spot, and take over the reins of business development.
In 2019, Vertex was busy shopping. The company spent a combined $1.6 billion across a number of deals including the purchase of a drug developer working on a stem-cell-based potential cure for diabetes and for access to a small molecule platform for drugging RNA. As of August, Leiden suggested his appetite for deals remains intact.
Despite some choice words for England’s lawmakers, Leiden also steered the company to clinch a deal with UK authorities to cover its slate of CF drugs following years of protracted negotiations. Vertex also successfully negotiated deals with authorities in Scotland, France, Spain and Australia for its CF drugs.
As current CMO Reshma Kewalramani moves into the CEO chair in April, all eyes are on Vertex’s pipeline, which is focused on six emerging disease areas including Alpha-1 Antitrypsin Deficiency, pain, sickle cell disease, beta-thalassemia, and APOL1-mediated kidney diseases to diversify from their established CF franchise.
On Thursday, the company revealed it had abandoned an early-stage program for its experimental painkiller, VX-961, because it did not display optimal PK and tolerability profile.
In November, the company and partner CRISPR Therapeutics unveiled encouraging preliminary data on two patients with blood disorders that have been administered with their gene-editing therapy, indicating their CRISPR/Cas9 technology is safe and effective.