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Analyzing Vertex Pharmaceuticals' Performance this Month

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Part 5
Analyzing Vertex Pharmaceuticals' Performance this Month PART 5 OF 6

Why Vertex Pharmaceuticals Could Expand Its Addressable Market

Tezacaftor and Ivacaftor combination regimen

On March 29, 2017, Vertex Pharmaceuticals released positive data from two phase 3 trials, Evolve and Expand. They demonstrated the efficacy of the company’s investigational cystic fibrosis (or CF) combination regimen of tezacaftor and ivacaftor in improving lung function, as measured by a percentage of predicted forced expiratory volume in one second (or ppFEV1). Based on these results, the company has planned to file an application with the U.S. Food and Drug Administration (or FDA) seeking approval for this treatment option in 3Q17. The company expects the FDA to set the Prescription Drug User Fee Act (or PDUFA) date in early 2018.

If the company manages to successfully launch this combination regimen in the United States, it would have a favorable impact on Vertex Pharmaceuticals’ stock price as well as the iShares Core S&P 500 ETF (IVV). Vertex Pharmaceuticals makes up about 0.19% of IVV’s total portfolio holdings. To learn more about clinical trial data supporting the application for this investigational regimen, see Inside Vertex Pharmaceuticals’ Clinical Pipeline.

Why Vertex Pharmaceuticals Could Expand Its Addressable Market

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Market expansion

Vertex Pharmaceuticals’ investigational tezacaftor and ivacaftor combination treatment aims to target cystic fibrosis (or CF) patients with two homozygous F508del mutations, a patient population that could not be treated with Orkambi due to adverse side-effects. The company also expects CF patients who are naïve to any therapy and haven’t been treated with Orkambi to prefer the benefit-risk profile of the tezacaftor and ivacaftor combination regimen. In the case of favorable real world data, physicians may even switch patients currently on Orkambi to tezacaftor and ivacaftor combination regimen.

If approved by the FDA, the tezacaftor and ivacaftor combination regimen will also be used to treat CF patients with residual transmembrane conductance regulator (or CFTR) function and one F508del mutation. Currently, there are no approved regimens for this patient population in the United States and Europe. So this combination regimen could significantly expand the company’s addressable market size.

Peers Pfizer (PFE), Proteostasis Therapeutics (PTI), and PTC Therapeutics (PTCT) are also actively involved in developing new CF therapies.

In the next part of this series, we’ll discuss Vertex Pharmaceuticals’ research pipeline in greater detail.

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