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FDA Approves Vertex’s Two-Drug Combo For Cystic Fibrosis

Xconomy Boston — 

[Updated 7/2/15, 2:55 p.m. See below.] The long-expected approval of Vertex Pharmaceuticals’ new combination drug for cystic fibrosis is finally here. The FDA approved the therapy regimen in a letter it sent to the Boston-based company Thursday.

The drug’s approval was all but certain, and paves the way for potential billions of dollars in future sales. Vertex plans to sell it under the brand name Orkambi.

The drug could also finally point the three-decade-old company towards profitability, and validate the wisdom of its pivot from hepatitis C—a field in which it briefly dominated, thanks to the 2011 approval of telaprevir (Incivek)—to cystic fibrosis, a disease that causes a buildup of thick mucus in the lungs, a host of other health problems, and, often, an early death.

Vertex broke into the CF arena in 2012, when the FDA approved ivacaftor (Kalydeco). In May, my colleague and Xconomy’s Deputy Biotech Editor Ben Fidler detailed Vertex’s transition into working with CF, as well as the complications the company has had in getting its new combination treatment approved.

In ivacaftor, the company had developed a method of counteracting the molecular abnormalities that cause CF in some patients, while most prior therapies had only managed their symptoms. The patient population that can be helped by the drug is small, though, and the cost is high: about $311,000 per patient, per year.

Now, with what’s being branded as Orkambi, Vertex is making a pill that combines another drug, lumacaftor, with ivacaftor in a bid to treat patients 12 years or older with the most common form of cystic fibrosis, caused by having two copies of a genetic mutation known as F508del. About half of the roughly 70,000 people with CF worldwide have this form of the disease, and the approval lets Vertex first target the 8,500 in the U.S.

The dual system of attack is something Vertex has been trying to develop in a CF drug for years, said Paul Negulescu, the head of Vertex’s San Diego site and the location of the CF research. The company has been seeking to enhance the function of defective proteins on the surface of a cell, which cause CF, Negulescu said during a conference call with investors Thursday. [Comments from Vertex executives added—Eds.]

Vertex has now done that in two ways. With ivacaftor, it enhances the function of the proteins at the surface of a cell; then, with lumacaftor, it increases the quantity of the proteins, Negulescu said.

“It’s an important day for the science behind CF,” he said.

Vertex is pricing the combo therapy at $259,000 annually, said Stuart Arbuckle, the chief commercial officer, during the conference call. The company expects as many as 40 percent of patients to be covered by Medicare—a higher level than the medicare coverage for ivacaftor—with most of the remaining patients being covered by commercial insurance, Arbuckle said. When patients receive Orkambi will depend on when payers approve reimbursement, Arbuckle said.

The European market is actually larger than the U.S. market, where Vertex is expecting a decision on its request to sell the treatment later this year. There are about 12,000 people with this form of CF, and England and Germany have the largest concentrations, Arbuckle said. The company has not determined pricing in that market yet, he said.

Xconomy noted in May that Barclays analyst Geoff Meacham estimated $5.5 billion in peak annual sales for lumacaftor/ivacaftor, should it hit the market. By comparison, ivacaftor generated $464 million in sales last year—and Vertex had a net loss of over $500 million.