Vertex Pharmaceuticals’ CF Drug Orkambi Gets FDA Nod

Vertex Pharmaceuticals Incorporated VRTX received a major boost with the FDA approving its cystic fibrosis (CF) treatment, Orkambi. Orkambi, a combination of lumacaftor and Kalydeco (ivacaftor), an already marketed CF drug in the company’s portfolio, is approved for the treatment of the underlying cause of CF in people (ages 12 and above) with two copies of the F508del mutation. The drug is to be used in patients who can be identified with a genetic test. Approval was largely expected as Orkambi had received a positive recommendation from an FDA advisory panel in May.

Vertex said that Orkambi will be available for shipment shortly. Orkambi has been priced at a wholesale acquisition cost of $259,000 per year.

Vertex is also looking to get Orkambi approved in the EU, Australia and Canada. A response from the European Medicines Agency (EMA) should be out by year end.

We note that Vertex is also evaluating Orkambi in a phase III safety study in children (6-11 years) who have two copies of F508del mutation.

Our Take

Orkambi’s approval is a major positive for Vertex and should boost the company’s CF franchise sales significantly. The approved indication is the most common form of CF and Orkambi is the first treatment to address the underlying cause of CF in this particular patient population. About 22,000 people (12 years and above), including 8,500 in the U.S. and 12,000 in Europe people across North America, Europe and Australia, have two copies of the F508del mutation.

Orkambi has breakthrough therapy designation in the U.S. We expect investor focus to remain on the launch trajectory. Vertex is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Cambrex Corporation CBM, Achillion Pharmaceuticals, Inc. ACHN and Avalanche Biotechnologies, Inc. AAVL. While Cambrex Corporation is a Zacks Rank #1 (Strong Buy) stock, Achillion and Avalanche Biotechnologies are Zacks Rank #2 (Buy) stocks.

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