- The Food and Drug Administration on Monday approved Vertex's highly anticipated three-drug treatment for cystic fibrosis, reaching a decision on the drug just two months after accepting the biotech's application.
- Branded as Trikafta, the drug is now the first triple combination therapy on the market for patients 12 years and older with the most common cystic fibrosis mutation. That group represents an estimated 90% of the cystic fibrosis population, including 27,000 people in the U.S., according to the FDA.
- Vertex set Trikafta's list price at $23,896 for a 28-day pack, which equates to an annual cost of $311,503. That's tens of thousands of dollars more than the company's on-market drugs Symdeko and Orkambi, which have drawn criticism over price.
Before Monday's approval, about half of all cystic fibrosis patients could be treated with a Vertex product. But Trikafta, which is a combination of ivacaftor, tezacaftor, and a next-generation corrector named elexacaftor, broadens the number to about 90%.
Cystic fibrosis is caused by mutations in a certain gene, with the most common mutation called F508del. Patients with a DNA makeup sometimes referred to as het-min have one allele with an F508del mutation and another with a minimal function mutation. Vertex estimates approximately 6,000 patients in the U.S. have this kind of genetic pattern, which is less common than having two copies of the F508del mutation.
Trikafta is approved to treat both populations, resulting in a label that should be attractive to prescribers. Investment bank Jefferies predicts the drug's uptake will be fast — particularly among the patients who are het-min, as they haven't had access to a marketed therapy despite accounting for roughly 30-40% of the cystic fibrosis market.
Meanwhile, the drug's uptake in the 50% of patients who are homozygous for the F508del mutation will be "good but not as fast as the 'new' het-min patients since homozygous patients are already on Orkambi/Symdeko," according to Jefferies analyst Michael Yee, who models $1 billion in Trikafta sales for 2020.
Vertex raised its 2019 financial guidance once before this year, and did so again with Trikafta's early approval.
The Boston-based biotech now anticipates earning net product revenues from its cystic fibrosis drugs of between $3.7 billion and $3.75 billion, up from a range of $3.6 billion to $3.7 billion set out at the end of June.
Trikafta's speedy review and market potential may also help to offset concerns about Vertex's other products securing reimbursement in the U.K. The company will report third quarter earnings on Oct. 30.
Regulators based their Trikafta decision on a pair of positive late-stage studies, the larger of which showed that patients treated with the drug had a 14% average improvement on a measure of lung function. That study also found a 63% reduction in the annualized rate of pulmonary attacks for patients treated with Trikafta as opposed to placebo.
Geoffrey Porges, an analyst at SVB Leerink, notes how that lung benefit looks "several fold better" than what was seen in patients treated with Symdeko (tezacaftor/ivacaftor and ivacaftor).
Because Trikafta was approved in a rare pediatric condition, Vertex will get a priority review voucher, a type of regulatory fast pass that can speed up the review time on another drug approval application. Porges estimates that Vertex could get $100 million by selling the pass, money which the company could put toward other R&D projects.
Though Vertex now has four marketable treatments for cystic fibrosis, the company's work in the space isn't over.
It's investigating gene therapy as a means of treating the remaining 10% of patients for whom existing treatments aren't applicable. And following a meeting at Vertex's facilities in La Jolla, California, Porges reported that "dozens of compounds are still being developed, tested, and then improved upon, in the company’s quest to deliver a near-normal level" of activity in a crucial cystic fibrosis-related protein.
Vertex shares were up about 3% after close of market Monday, trading at nearly $189 apiece. Year to date, company shares are up more than 17%.