J.P. Morgan Gives Update On VRTX

J.P. Morgan is maintaining its Neutral rating and its $53 price target on Vertex Pharmaceuticals VRTX following new data released by the company at the European Cystic Fibrosis Conference. According to J.P. Morgan, “We are attending the European Cystic Fibrosis (CF) conference in Germany and had a chance to discuss the VX-770 + VX-809 combo data as well as the VX-770 opportunity in G551D CF with a number of physicians. For VX-770, there was significant enthusiasm in the G551D CF population (STRIVE presentation today), and many physicians were optimistic on its potential in Class 4 / 5 CF patients. That said, reimbursement in the latter population may be problematic in the short term given no clinical data and likely high pricing. Based on our conversations with physicians / industry consultants, FDA / EMEA could limit initial VX-770 labeling to just the G551D population. For the VX-770 + VX-809 phase 2 combo data, the physician feedback was mixed with several docs citing that the drug effect “isn't quite clinically meaningful yet.” In our view, even among the small subgroups that had a higher response (4/17 patients > 20mmol/L decline), the numbers at this point are very small and aren't likely to be predictive of a robust FEV-1 effect in phase 3. The much larger F508del CF population is clinically tougher and data are not likely to be as robust as in G551D CF patients. With the combo data behind us and high expectations for the telaprevir launch in hep C, we don't believe the risk /reward in VRTX shares is attractive.” VRTX closed yesterday at $48.07.