Vertex, even amid pandemic, raises sales projections thanks to gangbusters start for Trikafta

Reshma Kewalramani, chief medical officer at Vertex
Reshma Kewalramani started in her role as Vertex's CEO on April 1. (Vertex)

Even as some pandemic-hit drugmakers lower their revenue expectations for the year—or pull their guidance altogether—Vertex has hit its stride with its Trikafta launch and raised its 2020 sales projections. 

Following an FDA approval that came five months early, Vertex’s new triple combo cystic fibrosis drug Trikafta pulled in $895 million in its first full quarter on the market. The drug’s original FDA decision date was set for March 20, so the FDA's early nod gave the company a big head start on the launch. 

And Vertex capitalized. While the new drug’s launch caused some “cannibalization” of Vertex’s older medicines—meaning its growth came at the expense of other drugs—the company grew overall revenues 77% from the same period in 2019. Around the U.S., the majority of CF patients eligible for treatment with Trikafta are already on the new med, execs said on a conference call Wednesday. 

With the first-quarter performance, Vertex raised its 2020 revenue guidance to between $5.3 billion and $5.6 billion, up from a prior range of $5.1 billion to $5.3 billion. Following a CEO transition on April 1, it'll be up to new chief exec Reshma Kewalramani to deliver for the rest of the year. Former CEO Jeffrey Leiden is now executive chairman.

The company raised its guidance even as larger drugmakers like Merck and Johnson & Johnson have chopped billions off their revenue expectations. Alkermes pulled its 2020 guidance altogether.

RELATED: Vertex joins the new-CEO brigade with Leiden jumping to exec chairman, CMO stepping up 

Vertex did benefit from some patients refilling prescriptions early and governments buying drugs early, execs said. That was “presumably in response to the early days of the pandemic,” chief commercial officer Stuart Arbuckle said on the call. 

“That essentially is something that we would expect to sort of even out over the course of this year,” he added. Drugmakers such as Sanofi and Amgen have reported similar trends.  

In addition to raising its guidance, Vertex also widened the expected range to account for COVID-19 uncertainties. For one, Vertex will continue watching “payer mix,” or the composition of patients’ insurance. As more Americans lose work due to the pandemic, more patients could shift to government insurance, where prices are lower. Execs for several companies have highlighted the consideration on recent conference calls.  

Meanwhile, some cystic fibrosis offices have also limited “non-emergency interactions,” Arbuckle said, “and this could impact the rate of future initiations.” Further, the “physician-patient dynamic” has been upended, but they have still “managed to maintain very, very active dialogue."

So far, that trend hasn’t disrupted new patient starts, but it could in the future, Arbuckle said. 

RELATED: Vertex lands $6B-plus triple combo nod for CF drug Trikafta—5 months early 

Looking ahead, one analyst wondered about the potential COVID-19 impact on reimbursement negotiations outside the U.S. for Trikafta. The drug hasn’t won European approval yet, so those negotiations haven’t started. But don’t look for Vertex to take a bad deal because economies have been hit, Arbuckle said.

The pandemic is a “situation that will pass over time” and Vertex plans to negotiate reimbursement deals that are “hopefully going to be long lasting because this is a terrific medicine, one that we feel very strongly has an incredible benefit risk profile,” he said on the call. 

“Therefore we believe [Trikafta] deserves to be rewarded with a premium price that is reflective of the value that it brings to patients,” he added. 

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