Hefty Orkambi commercial spend helps Vertex pick up the growth pace

Vertex CEO Jeffrey Leiden

Vertex has pumped up the launch for slow-starting cystic fibrosis med Orkambi--but it took some serious spending to do it.

Wednesday, the Massachusetts biotech reported SG&A costs that increased 23% year-over-year. While some of that spend went toward Vertex’s CF pipeline, the company put the rest behind “commercial support for Orkambi,” Leerink Partners analyst Geoffrey Porges wrote in a research note Thursday. But it paid off, with the med’s revenues picking up by 10% over the year-ago quarter to hit a $245 million mark that fell in line with forecasts.

That increase will “likely to come as a relief to investors after a disappointing early slowing in Orkambi’s growth trajectory,” Porges noted, and he also expects the results to provide a tailwind heading into the second half of the year, when execs on the Q2 conference call “repeatedly emphasized that incremental revenue opportunities and regulatory events were likely.”

Among them: A label expansion for the tandem med to include children aged 6 to 11 with two copies of the delta 508 mutation. The FDA is currently reviewing Vertex’s bid, with a PDUFA date for Sept. 30. And if it wins a green light--an event Porges expects--“we expect to be ready to bring Orkambi to these patients immediately,” CEO Jeffrey Leiden told investors.

While an FDA go ahead could help Vertex reach about 2,400 children in the U.S., there are even more young patients eligible for the therapy in Europe, Leiden estimated, pegging the tally at about 3,400. There, the drugmaker plans to submit its application for approval in the first half of next year, which could result in an early 2018 regulatory clearance.

Though in Europe, it hasn't been all smooth sailing when it comes to snagging reimbursement coverage. Last month, England's cost watchdogs turned down the med and its £104,000 ($147,000) pricetag for routine NHS use.

- read the call transcript

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