Vertex trial flop won't hurt chances for $485M revenue boost: Analysts

Vertex CEO Jeffrey Leiden

Monday, Vertex ($VRTX) announced plans to stop a cystic fibrosis trial that was coming up empty. But it wasn’t all bad news for the drugmaker--and analysts even managed to pull out some positives.

Candidate VX-661, combined with Kalydeco, failed in a Phase III study testing it among patients with one copy of the F508del mutation and one copy of a mutation that results in minimal CFTR protein function, the Massachusetts biotech said.

But that study came along with the highest risk of any in Vertex’s VX-661 clinical program, which includes three other Kalydeco combo studies. And with that in mind, the flop was “widely anticipated,” Leerink Partners analyst Geoffrey Porges wrote in a Monday note to clients.

The way Evercore ISI analyst Mark Schoenebaum sees it, the effects of abandoning the study will “likely be small,” he wrote in his own Monday research note. While success in that trial would have opened up that patient population to treatment one or two years before expectations, Vertex is still moving forward with a triple combination therapy to address the same patient pool.

And the good news? The canceled trial turned up no safety concerns for VX-661, Porges pointed out.

That fact should help make for smoother sailing in the prospect’s other three tests, which Porges predicted would succeed. And if they do, Vertex could widen its patient pool by 2,850 patients--or 9%--in the U.S. That’s $485 million in revenue potential, he figures.

Some of that revenue would come from new patient populations, he wrote--but he expects some to come from the F508del homozygous subpopulation--the largest in CF, and the one currently treated by Vertex’ first combo med, Orkambi. The reason? Thanks to drug-drug interactions, the VX-661 tandem is “being better received in the medical community and by F508del homozygous patients,” he wrote.

Industry watchers will still have to wait a few months to see how the F508del homozygous trial pans out, though. The trial has now been fully enrolled, and Vertex expects data in the first half of next year, it said.

- read the release 

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