Vertex Expects an Eventful 2011 - Analyst Blog

Vertex Pharmaceuticals Inc. (VRTX) recently gave an update on its pipeline. The company also provided a peek into its 2010 financial results, which will be released on February 3, 2011.

Telaprevir Status

Vertex Pharma completed the submission of a rolling new drug application (NDA) to the US Food and Drug Administration (FDA) for the company's lead pipeline candidate, telaprevir, in November 2010. Telaprevir is being developed for the treatment of hepatitis C virus (HCV), for both treatment-naïve and treatment-failed patients.

Vertex Pharma has requested the regulatory body to grant priority review status to telaprevir. The priority review status would curtail the time taken by the FDA to review the application of the drug to six months from ten.

Further, Johnson & Johnson (JNJ), Vertex Pharma's partner for the commercialization of the drug outside North America and the Far East, submitted a Marketing Authorization Application for telaprevir to the European Medicines Agency in December 2010.

Vertex Pharma has hired more than 200 sales representatives for the commercialization of telaprevir.

Moreover, the company has a late-stage trial (OPTIMIZE) of telaprevir currently ongoing. The study is designed to evaluate the twice-daily dosing of the candidate in HCV patients. The trial results are expected in early 2012 with a potential supplemental NDA submission in late 2012.

Update on VX-770

Vertex Pharma currently has three trials (STRIVE, DISCOVER and ENVISION) in progress for VX-770. The candidate is under evaluation for the treatment of cystic fibrosis (CF). The company plans to report data from the phase III STRIVE trial, which is being conducted in patients aged 12 and older, in the first quarter of 2011. Data from the mid-stage safety trial – DISCOVER – is also expected in the first quarter of 2011. Finally, results from the phase III ENVISION trial, being conducted in pediatric patients between 6 to 11 years, are expected in mid-2011.

Encouraging phase III results would allow the company to go ahead with its plans to seek US approval for VX-770 for the treatment of CF, in the second half of 2011.

Telaprevir and VX-222

The company currently has a mid-stage study ongoing that is evaluating telaprevir in combination with VX-222 for the treatment of HCV. The study currently includes three treatment arms and interim data from two of these arms is expected in the first quarter of 2011.

Outlook for 2010

Vertex Pharma expects to incur a loss of $600 million in 2010. Additionally, the company added that it ended 2010 with more that $1 billion of cash, cash equivalents and marketable securities.

Our Take

We currently have a Neutral recommendation on Vertex Pharma, which is supported by a Zacks #3 Rank (short-term Hold rating). With a handful of data releases planned for 2011, we expect it to be a very eventful year for Vertex Pharma.

However, with the company banking on telaprevir for growth, we believe that any delay in the approval of the candidate would weigh heavily on the stock. Moreover, we note that the HCV market is highly competitive with several small and large pharmaceutical companies working on clinical candidates.

 
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