Vertex came out of the chute after the market closed on Tuesday boasting about the efficacy data their researchers are seeing in a range of three Phase I and II studies for its new triple combos for cystic fibrosis. The data are still early but clearly bode well for Vertex, which is working hard to cast a far wider net among cystic fibrosis patients who have achieved modest but significant gains with their lead drug Kalydeco, which has won a sharp kickback from payers over its hefty price.
One possible fly in the ointment today: Two patients experienced a spike in liver enzymes, though that resolved after they stopped therapy. And that didn’t slow a market rally in after-hours trading, with shares $VRTX soaring 26% on the carefully packaged news, adding $8 billion to its market cap.
For a biotech that started Tuesday with a market cap of $32 billion, that’s a clean hit.
The focus today is on VX-440, VX-152 and VX-659.
For triple combination regimens using VX-152 or VX-440 there was a mean absolute improvement in FEV1 — a key measure of lung capacity — from baseline of 9.7% and 12% from two Phase II studies.
For the triple using VX-659, tezacaftor and ivacaftor in people with one F508del mutation and one minimal function mutation, the triple demonstrated a 9.6% improvement in FEV1 in a Phase I study.
Analysts of a variety of stripes were clearly wowed by the data. The clapping got started quickly the minute the company’s release hit the wires. Vertex has attracted plenty of buyout talk with its success in CF, and the focus now is on billions of dollars in potential new revenue – provided the data continue to break its way without any spoilers from rivals in the field.
Vertex “knocked it out of the park,” noted Baird’s Brian Skorney early Wednesday. “Based on the reported results, upwards of 70% of CF patients on a Vertex regimen will likely see a benefit on par with what Kalydeco provides to those with gating mutations.”
Geoffrey Porges at Leerink, who’s urged Gilead to buy Vertex, put it this way:
The results exceeded our expectations for these trials, with all three combinations tested in the het min population exceeding our expectations for the trial, and the single combination studied in delF508 homozygous patients also exceeding our expectations. Vertex is studying four different “second mechanism” correctors, added to the backbone of its tezacaftor-ivacaftor combination. Vertex also reported Cystic Fibrosis Questionnaire-Revised (CFQ-R) score improvements of 18.3 and 20.7 points for VX-440 200mg and 600mg, respectively, compared to placebo of 2.2 points. This score calculates the quality of life improvement on drug, and the gold-standard CF treatment Kalydeco resulted in a lower 8.1-8.6 point increase, while Orkambi led to a much lower 1.5-2.9 point increase.
Michael Yee at Jefferies noted:
VRTX showed all three different triple pill combos worked in het-min CF patients – expanding the market and suggesting peak sales for VRTX going from $2-4B towards $4-6B and set to be premier growth story in large cap biotech now.
Vertex has been working on four of what it describes as next-gen correctors, looking for the best to move ahead first. Today Vertex said that it has a VX-445 Phase II study underway, with a VX-659 Phase II set to begin in early August. VX-445 and VX-659 will be evaluated in triple combination with tezacaftor and ivacaftor in people with one F508del mutation and one minimal function mutation and will be evaluated in people with two copies of the F508del mutation who are already receiving tezacaftor and ivacaftor. Data from both Phase II studies are expected in early 2018.
“These safety and efficacy data are clear and compelling, indicating significant potential benefit for people with CF from each of these three different triple combination regimens,” said Jeffrey Chodakewitz, executive vice president and CMO at Vertex. “We will be collecting and evaluating additional data from these and other studies and will make a decision on which regimen(s) to take forward into pivotal program(s), which we expect to begin in the first half of 2018.”
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