Expect Vertex to do some deals this year, CEO says, and not just in cystic fibrosis

Vertex CEO Jeffrey Leiden said Monday his company is shopping for platform tech and early-stage assets in addition to deals in its current specialty field, cystic fibrosis.

SAN FRANCISCO—Vertex Pharmaceuticals is ready to do some deals. As the company looks to build on its momentum in cystic fibrosis, CEO Jeffrey Leiden said he's eyeing deals large and small—in CF and beyond.

At the J.P. Morgan Healthcare Conference Monday, Leiden said Vertex has a three-part strategy in business development. Vertex is aiming for assets that could complement its cystic fibrosis portfolio, analyzing “promising new platform technologies" such as CRISPR and mRNA, and looking at other early-stage prospects, the helmsman said. 

“We have done a lot more of this in the last few years and as we accumulate a lot more financial strength, you should expect to see us do more of these kinds of deals in all three areas,” Leiden said. "Perhaps some of these will be larger than the ones we have already done.” 

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Vertex has about $2 billion in cash it could use toward a deal and is expecting $2.1 billion to $2.15 billion in cystic fibrosis revenue for 2017, Leiden said. The drugmaker didn't roll out its 2018 guidance on Monday, as many industry watchers had hoped. 

Still, the company plans to "significantly increase" cystic fibrosis revenues in 2018, according to its presentation slides. Vertex will also work in 2018 to improve its margins and cash flows, Leiden said. 

Looking ahead, Leiden said he expects future revenue growth in cystic fibrosis to come from reimbursement deals outside of the U.S. for Orkambi, label expansions for Kalydeco and Orkambi, and the launch of pipeline drug tezacaftor combined with Kalydeco, expected this year.

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While Leiden told the crowd his company could be on the buying end for new deals, Leerink analysts wrote last week that the drugmaker could become a takeout target itself. Market watchers once thought Gilead Sciences might make a run at the CF-focused drugmaker, but now that the big biotech has scooped up Kite Pharma and its CAR-T platform, that seems less likely.  

In addition to orphan drug maker Alexion, Leerink analysts pegged Vertex as one of the best-positioned biopharmas for 2018. They noted that Vertex hasn't had to lean on price increases for growth but has instead expanded the approved uses for its drugs.