Vertex Hopes Two Cystic Fibrosis Drugs Better than One
CAMBRIDGE, Mass. ( TheStreet) -- Vertex Pharmaceuticals (VRTX) is expected to report strong initial sales of its cystic fibrosis drug Kalydeco on Thursday as investors shift their attention away from the waning performance of the company's hepatitis C drug Incivek.
Soon after Vertex reports first-quarter earnings, investor attention moves to two, more important events that will have a far greater influence on the future direction of the company's stock price: 1) The first look at the potency of two new hepatitis C drugs; and 2) results from a mid-stage "combo" study of Kalydeco and the experimental drug VX-809 in cystic fibrosis patients with the most commonly occurring (and therefore most commercially lucrative) genetic mutation F508del.
Let's take a quick look at first-quarter earnings expectations before tackling the two important clinical catalysts:
Vertex will be reporting the first quarterly sales of its cystic fibrosis drug Kalydeco since the drug was approved on Jan. 31. Current Street consensus for Kalydeco sales is $6-7 million but most investors expect and want to see actual reported sales beat easily.
Meantime, first-quarter sales of the hepatitis C drug Incivek are expected to total $402 million, notably lower than fourth-quarter sales of $457 million. This means Incivek's growth has likely peaked just a year since the drug's launch as the focus of doctors and hepatitis C patients shifts to new but still emerging all-oral regimens that do not require weekly injections of interferon.
Vertex is expected to report first-quarter earnings of 57 cents per share on total revenue of $452 million, according to Thomson Reuters.
A look at Vertex's upcoming clinical catalysts -- again, potentially more stock moving than earnings:
1. Hepatitis C-focused investors are gaga for the emerging class of direct-acting antivirals known as nucleotide (or nucleoside) polymerase inhibitors, which have the potential to become the backbone of new, all-oral combination regimens. The current superstar of the "nuc" drug class is Gilead Sciences' (GILD) GS-7977, but Bristol-Myers Squibb (BMY) and Idenix Pharmaceuticals (IDIX) are also developing their own nucs.
Vertex has nucs, too -- ALS-2200 and ALS-2158 both licensed from privately held Alios Biopharma . The Vertex nucs have remained largely off investors' radar because 1) efficacy and safety data have yet to be released publicly; and 2) the drugs are far behind other, competing nucs in terms of clinical testing.
The first anti-viral efficacy data from the Vertex nucs are expected this summer. These are just initial proof-of-concept studies, with hepatitis C patients treated with single doses of ALS-2220 and ALS-2158 for seven days.
Viral load reductions of about 3 log after three days and 4 log at seven days in a once-per-day dose less than 500 mg should be enough to get investors excited about Vertex's nuc program, says Brean Murray Carret analyst Brian Skorney.