- Vertex Pharmaceuticals won Food and Drug Administration approval Thursday for its financially disappointing cystic fibrosis drug Orkambi (lumacaftor/ivaftor) for a new patient population —children between the ages of 6 and 11.
- The Boston-based company hopes the new market will boost overall sales in the U.S., which approached already peak penetration in the previously approved medication, aimed for 12-year-olds and up.
- Vertex has revised its fiscal projections downward for anticipated 2016 revenues of Orkambi, from a previously expected $1.1 billion, to a range of $950 million to $990 million, noting sales projections, especially in Germany, were too optimistic.
Vertex’s drug Orkambi is proof that the economic possibilities of a drug can go only so far without robust marketing and patient buy-in. In Germany, the company reported only 20% of anticipated 2,500 eligible patients have begun treatment. Sales overall were slower than anticipated, with analysts attributing the problem to seasonal lag as well as slower uptake in Europe.
As a result, Vertex’s third quarter revenues are expected to be in a range between $230 million and $235 million, the company said, a downturn from the first and second quarters of $223 million and $245 million, respectively.
The company touts Orkambi as the first and only medicine to treat the underlying cause of cystic fibrosis for people with two copies of the F508 mutation, who represent the largest population of those with the disease. Cystic fibrosis (CF) is a life threatening genetic disease that impacts about 75,000 people in North America and Europe.
With the approval of the drug for a patient population 6 to 11, Vertex anticipates future growth in the U.S. in the fourth quarter. About 11,000 children in the U.S. will be eligible for treatment for the new age group. In addition, the company anticipates that obtaining reimbursement approval also could drive growth in 2017. Vertex also plans a marketing application with the European Union in the first half of 2017 for the population.
During a recent summit on CF held by the firm Jefferies, the company reported confidence that the addition of 6-to-11 year old patients should add to Orkambi’s financial portfolio, reflecting Vertex’s healthy lead over competitors in the market.
The analysts did note that some doctors at the summit were lukewarm about Orkambi overall. However, long-term data indicates no treatment or side effects that indicate patients should stay in therapy, the analysts said.
Jefferies also suggested that they saw Vertex leadership and possibility for expansion and leverage of the drug as undervalued.