Healthcare Vertex Pharmaceuticals Inc (VRTX): Orkambi Beats Estimates; Focus Is On Triple Combinations Now

Vertex Pharmaceuticals Inc (VRTX): Orkambi Beats Estimates; Focus Is On Triple Combinations Now

Published By News Desk at July 27, 2017 12:19 pm Maxim Group states that Vertex is poised to unlock up to 90% of the CF (cystic fibrosis) market, which reflects a larger heterozygote market and the best case

Vertex reports 2Q17 with total revenues of $514M vs. $487M street consensus. Total revenues include $324M in Orkambi sales and $190M from Kalydeco. Vertex spent $421M during the quarter and ended with $1.67B on the balance sheet. Vertex updated its full year 2017 guidance: Total Orkambi sales of $1.1 to $1.3B, which includes the potential additional revenues from Europe in 2H17, pending reimbursement agreements in European countries; total Kalydeco sales of $740M to $770M.

Vertex also increased non-GAAP R&D and SG&A expenses to $1.33B - $1.36B from $1.25B - $1.3B, reflecting the current clinical progression of the CF (cystic fibrosis) portfolio. Maxim has updated its model accordingly. Recall that Vertex shares jumped higher on recent news that triple combinations of VX-152, VX-440 or VX-659 with tez/iva demonstrated impressive improvements in lung function in both heterozygotes and homozygotes. The FEV1 improvements are the best we have seen, better than Kalydeco, Orkambi and tez/iva. Vertex is poised to unlock up to 90% of the CF (cystic fibrosis) market, which reflects a larger heterozygote market and the best case.

Vertex is currently developing four next-gen correctors for both homozygotes and heterozygotes to be used in combination with tezacaftor/ivacaftor; VX-152, VX-440, VX-659, and VX-445. F508del/min patients- The VX-152 (N=21) P2 study demonstrated FEV1 improvement at 15 days of 5.6% (low dose) and 9.7% (high dose) groups. In the VX-440 study at 29 days the FEV1 improvement was 10% (low dose) and 12% (high dose). F508del homozygotes- VX-440 (N=26) at day 29 improved FEV1 by 9.5%. In the P1 study of VX-659 at day 15 FEV1 improved by 9.6%. More data is expected in 2H17. Vertex plans to take a triple combo to move into a pivotal study in early 2018.