On October 24, 2018 Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) reported consolidated financial results for the third quarter ended September 30, 2018 and reviewed recent progress with its approved and investigational medicines (Press release, Vertex Pharmaceuticals, OCT 24, 2018, View Source [SID1234530273]). Vertex also reiterated its guidance for full-year 2018 total CF product revenues and guidance for combined GAAP and non-GAAP R&D and SG&A expenses.
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We continue to make significant progress toward our goal of developing medicines for all people with CF as marked by the recent approvals of KALYDECO and ORKAMBI in younger children, the launch of SYMDEKO in the U.S. and the rapid progress we have made with our triple combination pivotal studies," said Jeffrey Leiden, M.D., Ph.D., Chairman, President and Chief Executive Officer of Vertex. "In our development pipeline, we are advancing potential medicines for pain, sickle cell disease and beta thalassemia and are also beginning to advance additional compounds from research into early clinical development that could fundamentally change the treatment of other serious diseases in the future."
Dr. Leiden continued, "Our ability to treat more and more people with CF is driving revenue and earnings growth and significant cash flow generation, which enables the company to invest to discover and develop transformative future medicines for the treatment of CF and other life-threatening diseases."
Combined non-GAAP R&D and SG&A expenses increased compared to the third quarter of 2017 due to the advancement of the company’s portfolio of triple combination regimens for CF and investments to support the treatment of CF globally.
Combined GAAP R&D and SG&A expenses decreased compared to the third quarter of 2017 due to an upfront payment of $160.0 million related to the acquisition of VX-561, an investigational once-daily CFTR potentiator, from Concert Pharmaceuticals in the third quarter of 2017, partially offset by expenses related to the advancement of the company’s portfolio of triple combination regimens for CF and investments to support the treatment of CF globally.
Third-Quarter 2018 Net Income and Cash Position
Non-GAAP net income increased 107% compared to the third quarter of 2017 largely driven by the strong growth in total CF product revenues.
GAAP net income increased compared to the third quarter of 2017 largely driven by the strong growth in total CF product revenues and by a reduction to research and development expenses due to the $160.0 million payment to Concert in the third quarter of 2017.
Cash, cash equivalents and marketable securities as of September 30, 2018 were approximately $3.1 billion, an increase of approximately $1.0 billion compared to $2.1 billion as of December 31, 2017.
2018 Financial Guidance
Vertex today reiterated its full-year 2018 total CF product revenue guidance and guidance for combined GAAP and non-GAAP R&D and SG&A expenses as summarized below:
"We have created a strong financial profile for our business and are poised for continued growth as we make progress developing medicines for many more people with CF," said Ian Smith, Executive Vice President and Chief Operating Officer. "Nearer term, we anticipate revenue growth in 2019 will be driven by the impact of the SYMDEKO and SYMKEVI launches and recently completed reimbursement agreements and label expansions for our CF medicines. The potential for additional revenue growth in 2019 will be dependent upon gaining new reimbursement agreements in key countries, including the UK and France. Continued growth beyond 2019 will be driven by the potential approval, reimbursement and uptake of a triple combination medicine for the large number of patients with a minimal function mutation who currently do not have a treatment for the cause of their CF."
Business Highlights
TRIPLE COMBINATION REGIMENS
Bringing triple combination regimens to people with CF as quickly as possible
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Data are expected in late 2018 for the two Phase 3 studies of VX-659 in triple combination with tezacaftor and ivacaftor in people with CF who have one F508del mutation and one minimal function mutation and in people who have two F508del mutations.
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Enrollment is expected to be complete in the fourth quarter of 2018 for the two Phase 3 studies of VX-445 in triple combination with tezacaftor and ivacaftor in people with CF who have one F508del mutation and one minimal function mutation and in people who have two F508del mutations. The company plans to report data from these studies in the first quarter of 2019.
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Vertex plans to evaluate data from both the VX-659 and VX-445 Phase 3 triple combination programs to choose the best regimen to submit for potential regulatory approval. Together these data are expected to provide the basis for submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for people who have one F508del mutation and one minimal function mutation no later than mid-2019.
Evaluating VX-659 and VX-445 in children
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Studies are underway to evaluate both the VX-659 and VX-445 triple combination regimens in children with CF ages 6 through 11 who have one F508del mutation and one minimal function mutation and in children who have two F508del mutations. These studies are intended to support potential approval of a triple combination regimen in children ages 6 through 11.
Potential once-daily regimens
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In early 2018, the company reported positive safety and efficacy results for the once-daily potentiator VX-561 when dosed as part of a triple combination regimen including VX-659 or VX-445 and tezacaftor. The once-daily triple combination regimens were generally well tolerated, and the majority of adverse events were mild to moderate.
Based on recent feedback from the FDA, Vertex plans to initiate a Phase 2 study in the first half of 2019 evaluating VX-561 as a monotherapy in people with CF who have a gating mutation.
SYMKEVI in the European Union
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On July 27, 2018, Vertex announced that the European Medicines Agency (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for SYMKEVI (tezacaftor/ivacaftor) in a combination regimen with ivacaftor (KALYDECO) for the treatment of people with CF ages 12 and older who either have two copies of the F508del mutation or who have one copy of the F508del mutation and a copy of one of the following 14 mutations in which the CFTR protein shows residual activity: P67L, R117C, L206W, R352Q, A455E, D579G, 711+3A→G, S945L, S977F, R1070W, D1152H, 2789+5G→A, 3272-26A→G, and 3849+10kbC→T.
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Approval for SYMKEVI in the European Union (EU) is expected in the fourth quarter of 2018.
APPROVED CF MEDICINES
Establishing long-term reimbursement outside of the U.S.
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On October 1, 2018, Vertex announced that it had entered into an innovative access contract with the Danish pharmaceutical and procurement organization, Amgros. This agreement provides eligible Danish CF patients access to all of Vertex’s current and future CF medicines. An agreement in Austria was also recently secured to provide access to ORKAMBI for all people with CF ages 6 through 11 who have two copies of the F508del mutation.
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In September 2018, Vertex announced a reimbursement agreement in Australia for the use of ORKAMBI in people with CF ages 6 and older who have two copies of F508del mutation. A pathway to access for future Vertex CF medicine, tezacaftor/ivacaftor, was also established as part of this process.
Treating patients at younger ages with CFTR modulators: The company continues to make significant progress toward gaining approval for its CF medicines to be used earlier in the course of disease progression. Recent highlights include:
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Vertex plans to submit a supplemental New Drug Application (sNDA) to the FDA in late 2018 based on positive data from a recently completed 24-week single-arm Phase 3 safety study of tezacaftor/ivacaftor in 70 children ages 6 through 11 who have two copies of the F508del mutation or who have one copy of the F508del mutation and one residual function mutation. The primary endpoint of the study was safety. The study met its primary safety endpoint, and safety data from the study showed that the treatment was generally well tolerated and safety data were consistent with those seen in previous Phase 3 studies of tezacaftor/ivacaftor in children ages 12 and older. To support approval in the EU, an eight-week, double-blind, placebo-controlled Phase 3 efficacy study is ongoing to evaluate tezacaftor/ivacaftor in approximately 65 children ages 6 through 11. The primary endpoint of this study is the absolute change in lung clearance index.
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KALYDECO was approved in August 2018 in the U.S. for children with CF ages 12 to <24 months. On October 19, 2018, Vertex announced that it received a positive opinion from the European CHMP for KALYDECO in this age group. The company expects a decision in the EU in late 2018.
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On October 18, 2018, Vertex announced positive data from a Phase 3 study evaluating ivacaftor in infants ages 6 to <12 months. These are the first data to demonstrate the potential to treat the underlying cause of CF in patients as young as six months old. The company plans to submit an sNDA to the FDA and a line extension to the EMA in late 2018.
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ORKAMBI was approved in August 2018 in the U.S. for children with CF ages 2 to 5 years old. A line extension has been submitted to the EMA with a decision anticipated in the first half of 2019.
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Dosing is underway in Phase 3 study evaluating lumacaftor/ivacaftor in children ages 12 to <24 months.
LATE-STAGE RESEARCH & CLINICAL DEVELOPMENT
Vertex continues to invest to discover and develop transformative medicines in other serious diseases. The company has a portfolio of potential medicines across a range of diseases, including:
Sickle Cell Disease & β-Thalassemia: Vertex and its partner CRISPR Therapeutics are developing the autologous gene-edited hematopoietic stem cell therapy CTX001 for the treatment of β-thalassemia and sickle cell disease.
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In the U.S., Vertex and CRISPR Therapeutics recently announced that the FDA lifted the clinical hold on the CTX001 Investigational New Drug application (IND) for the treatment of sickle cell disease that was submitted earlier this year. The companies previously received regulatory approval to conduct a Phase 1/2 study in multiple countries in Europe and Canada. Vertex and CRISPR plan to initiate the study in sickle cell disease by the end of 2018. The first two patients in the study will be dosed sequentially and, pending data from these initial two patients, subsequent patients can be dosed concurrently.
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Enrollment for a Phase 1/2 study in people with β-thalassemia is currently open at multiple clinical trial sites in Europe, and the first patient has now enrolled in this study. The Phase 1/2 trial is designed to assess safety and efficacy in adult transfusion-dependent non-beta zero/beta zero β-thalassemia patients. Similar to the study in sickle cell disease, the first two patients in the study will be dosed sequentially and, pending data from these initial two patients, subsequent patients can be dosed concurrently. This study is designed to enroll up to 45 patients.
Pain: Potential Role of Nav1.8 Inhibition
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The company is planning to initiate a Phase 2b dose-ranging study evaluating the Nav1.8 inhibitor VX-150 using an oral formulation in patients with acute pain following bunionectomy surgery. The study is designed to evaluate multiple oral doses of VX-150 to potentially support pivotal development in acute pain.
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Enrollment is complete in a Phase 2 proof-of-concept study evaluating VX-150 for the treatment of pain caused by small fiber neuropathy, and data are expected in early 2019.
Vertex continues to invest to discover other potential pain molecules that target the sodium channel 1.8 (Nav1.8) and other new mechanisms.
Alpha-1 Antitrypsin Deficiency (AAT)
•Vertex has advanced multiple small molecule correctors of AAT through preclinical development and is preparing to initiate clinical development for the first of these potential medicines by the end of 2018. AAT is a genetic disorder that is caused by mutations in a single gene that result in life-shortening systemic complications, primarily in the lung and liver.
Acute Spinal Cord Injury
In October 2014, VRTX in-licensed VX-210 (Cethrin) from BioAxone BioSciences, Inc. as a potential new treatment for spinal cord injury. An interim analysis of a Phase 2b study evaluating VX-210 in patients with certain acute cervical spinal cord injuries was recently conducted and based on the available data, the study’s Data Safety Monitoring Board (DSMB) recommended to stop the study early due to futility. There were no safety concerns noted in the DSMB’s review of the data. Based on the DSMB’s recommendation and Vertex’s review of the data, the company has decided to stop all development of VX-210, and will terminate the Phase 2b study. Vertex will discuss with BioAxone the next steps for the program.