- For the last several years, Vertex and CRISPR Therapeutics have been co-developing a potential cure for two blood disorders. On Tuesday, the companies said they amended their agreement so that Vertex takes on more of the associated costs, but also more of the profits should the therapy come to market.
- The new agreement directs 60% of development costs and profits from future sales to Vertex, reflecting a 10% increase in both figures. CRISPR is now responsible for 40% of costs and would receive 40% of the profits. The revised terms also hand CRISPR a $900 million upfront payment, with the potential for $200 million more upon the first approval of the therapy, known as CTX001.
- CRISPR's CEO Sam Kulkarni told BioPharma Dive late last year that the companies will submit CTX001 for approval once they've treated enough patients in two ongoing studies, which are testing the therapy in people with sickle cell disease or beta thalassemia. Early results from the studies have shown that a small number of patients with severe forms of these disorders saw their conditions improve after treatment.
Vertex, best known for its work in cystic fibrosis, is under increasing investor pressure to branch into other markets.
Among the company's diverse crop of experimental medicines, which target everything from pain to kidney disease to muscular dystrophy, the most advanced one is arguably CTX001.
CTX001 was developed using the high-profile CRISPR gene editing technology, which won a Nobel Prize last year. Though it's still in the earlier stages of human testing, genetic medicines have been able to secure approval based on relatively small amounts of patient data — provided their benefit is substantial.
In the case of CTX001, data presented in December from those two ongoing studies were positive. In the one study, seven patients with beta thalassemia, a disease that causes low levels of oxygen throughout the body, no longer needed blood transfusions for months after receiving CTX001.
In the other, three sickle cell patients treated with CTX001 also went months without experiencing a common and painful symptom of the disease known as a vaso-occlusive crisis.
As more data are collected, the revised agreement announced Tuesday suggests Vertex has more confidence that CTX001 will be approved and sell well once it's on the market. In a statement, the company said it plans to "maximize the potential for CTX001" by using "the breadth" of its experience manufacturing new drugs, getting them approved and selling them.
"We see a significant commercial opportunity for CTX001, and we believe we will be able to further enhance that opportunity by fully leveraging the breadth of Vertex’s capabilities," Jeffrey Leiden, Vertex's executive chairman, said in the April 20 statement.
But Brian Skorney, an analyst at Baird, had a less favorable view of the deal. In a research note, Skorney wrote the $900 million payment for an extra 10% in future profits implies that Vertex sees CTX001 as a more than $9 billion opportunity, which might be lofty.
Sales performance of the few gene therapies that have reached markets has been mixed. Zolgensma, sold by Novartis, has done well, with sales approaching $1 billion last year. But two others, Luxturna in the U.S. and Zynteglo in Europe, haven't brought in much for their developers while two earlier treatments, Glybera and Strimvelis, never got off the ground.
"Today's CRISPR deal doesn't appear to be particularly compelling," Skorney wrote in a note to clients. "While we acknowledge that CTX001 has produced encouraging clinical data, we believe this valuation is steep for an asset in a highly competitive space, with a limited portion of the patient population likely to receive gene therapies."
Vertex, with its four marketed treatments for cystic fibrosis, last year recorded $6.2 billion in net product revenue. The company has said it expects net product revenue to reach about $6.8 billion in 2021.