What competition? Vertex touts Trikafta's competitive edge on back of strong 2021

Vertex finished out 2021 strong, smashing analyst’s sales expectations for the full year. Chalk it up to the company’s entrenched position in cystic fibrosis, where Vertex expects to maintain its lead for years to come, according to CEO Reshma Kewalramani, M.D.

Vertex snared $7.57 billion in product revenues for 2021, signaling a 22% increase year over year. For 2022, the company expects to pull in sales of $8.4 billion to $8.6 billion. For now, that growth is firmly tethered to Vertex’s bread-and-butter CF franchises.

The company’s 2022 guidance suggests “penetration of additional CF patients will occur more rapidly than expected with age expansion and full-year impact of ex-U.S. reimbursements,” RBC Capital Markets’ Brian Abrahams wrote in a note to clients Wednesday.

During its call Wednesday, Vertex repeated estimates that there are more than 25,000 patients who could benefit from CF newcomer Trikafta and aren’t yet on therapy. The company splits those patients into three groups: those who’ve yet to start on Trikafta in countries where the drug was recently reimbursed, patients in territories where the drug hasn’t been reimbursed and younger patients, who Vertex aims to address with future Trikafta label expansions.

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Meanwhile, the $8.4 billion to $8.6 billion range Vertex laid out seems “notoriously conservative,” Evercore ISI’s Liisa Bayko wrote in a note to clients. “[W]e expect VRTX to beat and raise throughout the year,” she added.

Trikafta, for its part, carried the bulk of the sales weight last year, bringing in $1.69 billion for the last three months of 2021. The drug made about $1.09 billion during that same period in 2020. Trikafta reaped full-year 2022 sales of $5.69 billion, marking a blockbuster-worthy increase over the $3.86 billion it made in 2020.

Older CF med Kalydeco proved to be the company’s next top seller—though by a significantly smaller margin—with fourth quarter sales of $152 million. The drug made $684 million for the year. Orkambi made $147 million for the quarter—slightly down from 2020’s $215 million—and $772 for the year, while Symdeko pulled $80 million in the fourth quarter and $420 million for all of 2021.  

Vertex is working to branch out from its CF base, and analysts seem to share the company’s hopes for phase 1/2 Type 1 diabetes candidate, VX-880. That drug could potentially unlock a “multibillion-dollar opportunity, which is comparable to CF and nearly all upside in our model,” RBC’s Abrahams said. CF forms the backbone of Vertex’s pharma business, and investors have long pushed the company to diversify.

Vertex has also pinned its hopes on its gene editing program for sickle cell disease and beta thalassemia, CTX001, as its next commercial launch, Kewalramani said. The company sees “tremendous potential” for the treatment, and Vertex has already kicked off launch preparations ahead of planned global regulatory submissions toward the end of the year. The company is building out market access, patient support and its doctor-facing teams, as well as finalizing its manufacturing and supply chain network, the company said during its earnings call.

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Still, when it comes to CF, Vertex is confident it can maintain its place at the head of the table, Kewalramani said.

“More patients around the globe are treated with a Vertex CFTR modulator today than ever before, and the vast majority of that is with Trikafta,” which boasts “remarkable” clinical trial data, the CEO said. “If there’s any medicine that will compete with Trikafta, it has to go head-to-head against Trikafta in clinical trials.

“It has to have improved benefit, and you have to have the long-term data,” she added.

The only company that has that right now is Vertex, and the “most advanced” competitor to Trikafta is the company’s own triple combo of tezecaftor and the experimental VX-121 and VX-561, which is in phase 3 testing.

Kewalramani highlighted recent real-world Trikafta data, garnered from more than 16,000 U.S. patients, which showed the drug led to an 87% reduction in risks of lung transplant, 77% fewer pulmonary exacerbations and a 74% reduction in risk of death.

That said, the company is “on the cusp of a critical external event that should settle the viability of VRTX’s dominance in CF … that is ABBV’s triplet data,” Evercore’s Bayko said. Consensus opinion is pointing toward “lackluster” data from AbbVie, but, “It would be an unwelcomed surprise if the data were comparable to Trikafta,” the analyst added.

AbbVie's combo, which is in phase 2 testing, comes from the company's purchase of Galapagos' CF pipeline for $45 million in late 2018.