What a bad week for my friends at Vertex Pharmaceuticals!
Yes, on Friday, December 20 the company announced that the Food and Drug Administration had approved Vanzicaftor -- henceforth to be promoted under the brand name Alyftrek -- for the treatment of cystic fibrosis. It's the latest in Vertex's game-changing "modulator" drugs for people with CF, the most successful of which, to date, is Trikafta. The FDA even expanded the list of mutations for which Trikafta can be prescribed, and now my daughter's CF mutation (N1303K, inherited from her dad) is officially on the list.
But I am not celebrating and, I suspect, neither are they dancing on the tables at the Vertex executive suite in Boston's Seaport district. The reason: money.
Alyftrek debuts at a wholesale acquisition cost -- the closest we have to a list price in the byzantine world of prescription drugs -- at an obscene $370,000 a year. That leapfrogs past Trikafta, with a list price in the low $300,000 range, determined in 2020 by the respected Institute for Clinical and Economic Review (ICER) to be overpriced a factor of at least three. Though I don't know of any plans by ICER to do a similarly detailed study of Alyftrek it is hard to imagine a universe where $370,000 could be cost effective, given that the only real difference between Alyftrek and Trikafta is the number of daily doses (one vs. two).
Meanwhile, the Alyftrek announcement came the day after the price of Vertex stock took a big plunge, from (in round numbers) $450 a share to $400 -- an eleven percent drop in one day.
So what went wrong on Thursday that couldn't be fixed by Friday's news about Alyftrek?
According to Allison Gatlin of S&P Global, Vertex stock "was already floundering even before Thursday when the company's non-opioid pain drug underperformed expectations in a midstage study." The pain drug in question is Suzetrigine and, according to Gatlin, the future of the drug is now in doubt because in patients with a common cause of lower back and hip pain, "while patients showed improvement in pain levels, there was little difference from the placebo group."
Vertex, she reported, "is working hard to break out of its cystic fibrosis focus." She pointed out that in the third quarter the company had $2.77 billion in sales -- big bucks, even for a big pharma firm -- and up 12 percent from the same period in 2023. But Trikafta accounted for 93 percent of that revenue.
In other words, this is a big pharma firm that is desperate to diversify beyond its cystic fibrosis cash cow. It's busy trying to develop not just a non-opiod pain killer and also gene therapy treatments for sickle cell disease and the related condition of transfusion-dependent beta thalassemia. The sickle cell initiative looks particularly promising.
But meantime, Vertex is a company desperate to please investors in the near term, so it is no wonder that the latest CF modulator drug carries a list price of $370,000 a year. Vertex's share price did not budge on Friday. Maybe the news broke on Friday too close to the closing bell at the New York Stock Exchange to make a difference. Or, maybe the share price was already accounting for the confidence of the investment community that Vertex will continue to extract huge sums of money from people with cystic fibrosis, their families, and the insurance plans that cover them.