2023-05-24 16:23:42 ET
Summary
- Vertex Pharmaceuticals Incorporated data readout from a phase 3 program, using VX-548 for the treatment of patients with acute pain, could be released by the 1st half of 2024.
- Proof of concept, using VX-548 for the treatment of patients with acute pain, was established in a phase 2 study; patients given VX-548 achieved far more rapid pain relief compared to placebo.
- SVB Securities estimates that should VX-548 for acute pain reach the market, it could generate $510 million in 2030 estimated risk-adjusted sales.
- Vertex and its partners Crispr Therapeutics completed a rolling BLA submission to the U.S. FDA of exa-cel for the treatment of patients with TDT and SCD back in April of 2023; European and UK regulatory reviews of exa-cel for these patient populations began January of 2023.
Vertex Pharmaceuticals Incorporated ( VRTX ) is a good speculative biotech play to look into. That's because it is doing well in the Cystic Fibrosis [CF] space. It will still continue to do well with sales for its CF drug franchise, albeit a slow/modest growth. However, I believe that further upside could be possible once it releases data from its ongoing late stage study.
It is expected that Vertex Pharmaceuticals will complete its phase 3 study, using VX-548 for the treatment of patients with acute pain, by end of 2023 or early 2024. This means that results from this study should be released at some point during the 1st half of 2024.
Why I believe that it is important to highlight the use of this drug for this specific patient population is because it could change the pain treatment landscape. What do I mean by that? Well, a new type of drug for acute pain hasn't been approved in decades. Should Vertex's drug succeed in the ongoing phase 3 study for this indication, plus be approved, it would provide patients with a better treatment option.
There are several reasons on why this is the case, with the most notable being that it would provide these patients with a non-addictive pain drug. Opioids, which are the current choice of drug by Doctors for pain, can potentially be habit forming. VX-548 offers a unique mechanism of action and will not be addictive.
In addition, it can be given to patients orally. With these advantages it could be a big deal for Vertex. Most notably, I would say that the fact it won't be habit forming like Opioids would be the biggest reason of all.
Lastly, there is potential for expansion opportunity. While a phase 3 data readout for VX-548 is expected to happen by early 2024 for the treatment of patients with acute pain, the biotech is also exploring its use in a phase 2 proof of concept study for the treatment of patients with peripheral diabetic neuropathic pain. Thus, an opportunity to expand to another part of the pain market. A 12-week phase 2 dose ranging proof of concept study for VX-548 for this specific pain population market was initiated in Q4 of 2022.
With proof of concept established for VX-548 in acute pain in a phase 2 study, plus a phase 3 data readout for this same patient population expected in the 1st half of 2024, these are the reasons why I believe that Vertex Pharmaceuticals is a good speculative biotech play to look into.
Expanding To The Acute Pain Market Could Mean Possible Further Gains For Investors
As I highlighted above, Vertex Pharmaceuticals has a huge hold on the Cystic Fibrosis [CF] market with several drugs. This is likely to continue, especially since AbbVie didn't fare well with respect to advancing its own CF drugs. Matter of fact, after it analyzed interim results from a proof-of-concept study using a triple-combination cystic fibrosis therapy, the company stated that it will not continue with development of this program. It also stated that there was no back up candidate in place to keep this program alive, thus it was terminated entirely. Thus, Vertex will still be able to obtain sales growth in this market, but it will be slow/moderate growth.
However, why I believe it still has potential as a speculative buy beyond its CF franchise, is because it has another candidate in the pipeline known as VX-548. The reason why I believe investors can benefit from the advancement of this drug is because two phase 2 studies established proof of concept in being able to treat patients with acute pain. VX-584 was shown to provides far more rapid pain relief compared to placebo in this phase 2 study. Specifically, this NaV1.8 inhibitor met the primary endpoint in both phase 2 proof of concept studies for acute pain. It was shown in both studies that patients with acute pain following an abdominoplasty or bunionectomy surgery, were able to achieve rapid pain relief compared to placebo.
With this positive proof-of-concept data established in using VX-548 for both of these acute pain populations, Vertex was given the go ahead to initiate a phase 3 program treating patients with acute pain. That is, the phase 3 program entails two placebo controlled studies which will be evaluating VX-548 for the patients with acute pain. It has been stated that by SVB Securities, that should the drug reach the market, it could generate $510 million in 2030 estimated risk-adjusted sales .
With this potential in sales for this indication, this is why I believe that Vertex Pharmaceuticals shareholders could ultimately be rewarded. Again, especially since this would be the first drug of its kind to offer patients with a non-addictive treatment option for pain.
Potential Expansion Opportunity With VX-548 In Diabetic Neuropathic Pain
Even greater than the potential above in being able to advance VX-548 forward towards treating patients with acute pain, there is the possibility that this drug could also be used to treat patients with peripheral diabetic neuropathic pain. Specifically, this will be targeting patients with painful diabetic peripheral neuropathy [DPN]. Matter of fact, Vertex initiated such a study back in Q4 of 2022. This is another potential expansion opportunity for this drug that Vertex can also go after. The primary endpoint of this phase 2 proof of concept study is going to be the change from baseline in the weekly average of daily pain intensity on a numeric pain rating scale [NPRS] at Week 12. Where traders/investors could also benefit here is that the estimated primary completion date for this study is set to be around March/April of 2024. Thus, it could be said that results from this mid-stage study using VX-548 for the treatment of patients with peripheral diabetic neuropathic pain, could also be released in the 1st half of 2024.
Financials
According to the 10-Q SEC Filing , Vertex Pharmaceuticals had cash, cash equivalents and total marketable securities of $11.5 billion as of March 31, 2023. What makes Vertex an ideal biotech to look into is that it is already generating sales with its CF drug franchise. Matter of fact, product revenue reached $2.37 billion, which was a 13% increase compared to Q1 of 2022.
As I stated above, Vertex Pharmaceuticals will continue to grow this franchise at a stable/moderate pace. Where it will see more growth in product revenue for the CF market would be outside of the United States. That's because in the U.S., net product revenue in Q1 of 2023 only grew by 3%, compared to an increase of 33% to $971 million outside the United States. Still, it generates an enormous amount of revenue for its CF franchise. How is this proven? This is proven with the fact that it is still giving full-year 2023 sales guidance of about $9.55 to $9.7 billion.
Risks To Business
There are several risks that traders/investors should watch out for before investing in Vertex Pharmaceuticals. The first risk to consider would be with respect to the ongoing phase 3 study program, which is using VX-548 for the treatment of patients with acute pain. That's because even though this biotech established proof-of-concept in being able to treat this specific patient population, there is no guarantee that it will achieve a successful outcome in this late-stage program entailing two phase 3 studies.
A second risk to consider would be with respect to the possible review of VX-548 by regulators. Being that it is a non-opioid treatment option for pain, I believe that it will be scrutinized far more because of it. Thus, achieving the primary endpoint for both phase 3 studies won't be the only hurdle it will have to tackle with respect to this program.
A final risk to consider would be with respect to the expansion opportunity I noted above. That is, a phase 2 study which is exploring the use of VX-548 for the treatment of patients with peripheral diabetic neuropathic pain. This is a risk because even though VX-548 established proof in being able to treat patients with acute pain, it remains to be seen if the same can be said for this other pain patient population.
Conclusion
The final conclusion is that Vertex Pharmaceuticals is a good speculative biotech play to look into. That's because not only has it proven that VX-548 can be used for pain patients after abdominoplasty and bunionectomy, but it has already moved this program towards phase 3 testing. Not only that, but traders/investors can possibly benefit upon results being released from this program in the 1st half of 2024.
Speaking of the 1st half of 2024, there is another data readout which is going to possibly be released at that time. This would be the release of results from the 12-week phase 2 proof-of-concept study, which is using VX-548 for the treatment of patients with peripheral diabetic neuropathic pain.
In addition, I believe that it is important to highlight another major program from this company, which entails a partnership. That is Vertex is partnered with CRISPR Therapeutics AG ( CRSP ) in advancing a gene therapy treatment known as exa-cel for the treatment of patients with transfusion dependent beta thalassemia [TDT] and sickle-cell disease [SCD]. I wrote about this partnership in another Seeking Alpha article titled " Crispr Therapeutics: Potential Beyond Current BLA Filing Of Exa-Cel. " A rolling Biologics Licensing Application [BLA] submission to the U.S. FDA of exa-cel for these patient populations was completed in April of 2023 . In addition, Europe and UK filings for this drug for the same patient populations was completed back in 2022, with the review for these territories being initiated in January of 2023.
I would go even further to state that this company has an extensive pipeline to build upon. It is going after other indications with early stage-programs targeting Type 1 Diabetes [T1D], APOL1-Mediated Kidney Disease [AMKD], and Alpha-1 Antitrypsin [AAT] Deficiency. Lastly, Vertex is not leaving its CF franchise as it remains.
By that, I mean Vertex Pharmaceuticals Incorporated has developed a partnership with Moderna, Inc. ( MRNA ) to advance a messenger RNA [mRNA] therapeutic to target about 5,000 patients who are not able to produce any CFTR protein at all. Thus, these patients don't gain a lot of benefit from CFTR modulator therapies alone. The hope is that VX-522, which is being developed for these specific CF patients, will be helpful for them.
With proof of concept established for VX-548 in acute pain in a phase 2 study, plus a phase 3 data readout for this same patient population expected in the 1st half of 2024, these are the reasons why I believe that Vertex Pharmaceuticals Incorporated stock is a good speculative biotech play to look into.
For further details see:
Vertex: CF Focus, Potential To Alter Acute Pain Treatment Market Landscape