Vertex Pharmaceuticals Inc

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Vertex Pharmaceuticals engages in discovering, developing, manufacturing and commercializing small molecule drugs for patients with serious diseases. It focuses on developing and commercialising therapies for the treatment of cystic fibrosis; infectious diseases, including viral infections such as influenza, and bacterial infections; autoimmune diseases such as rheumatoid arthritis; cancer, inflammatory bowel disease; and neurological disorders, including pain, Huntington's disease and multiple sclerosis.ref
The company was founded by Joshua S. Boger in 1989 and is headquartered in Boston, Massachusetts. It has research and development sites and offices around the world, including the UK.

Although Vertex's shares increased 250% between 2011-2015, and it managed to pay its CEO $36.6m in 2015, sadly it has only managed to post one annual profit (in 2017/18) since it was founded.ref,ref The increase in drug sales came from Orkambi, Vertex's newer cystic fibrosis drug.ref Consequently, Vertex planned a share buyback of up to $500m.ref

Business Model: Use either (a) govt-funded research via university laboratories, or (b) venture philanthropy, to develop the basic science. Then exploit for private profit. Both (a) and (b) are based on taxpayer funding.

Govts and patients around the world are struggling to cope with escalating costs. In the USA, the average annual price of new cancer drugs almost doubled between 2013 and 2017 – and is set to double again by 2022.ref

Company

Shareholders

Total Float: 72.2%
Source: MarketScreener.svg, Mar.2020

Prices

Kalydeco patients are likely to take it for their lifetime; it could cost $millions for just one patient. How are we, as a society, going to pay for 30,000 cystic fibrosis sufferers?

But what when there are 200 such drugs? Or when the drugs target diabetes or even cholesterol? Gilead Sciences' drug Sovaldi takes aim at Hepatitis C - but each pill costs $1,000, and the full course is $84,000. The Hepatitis C population is over 3m; we could be looking at $300bn - which is what the entire USA pays for all prescription drugs combined. Barry Werth said: “This is the future of medicine, and there’s going to be a reckoning.” ref

Drugs

CTX001

  • Jan.06.2019: Better Buy: CRISPR Therapeutics vs. Vertex Pharmaceuticals. The US Food and Drug Administration recently granted fast-track status to the first experimental new therapy from CRISPR Therapeutics. That's a big deal for the young biotech and its collaboration partner, Vertex Pharmaceuticals. Both of these companies stand to earn a great deal if their one-time cure for blood-based disorders performs as well as hoped. Cory Renauer, The Motley Fool.

Orkambi

Orkambi is a combination of Kalydeco and Lumacaftor. The drug's price has caused consternation around the world.ref

  • Jan.2019: Vertex refused NHS England's requests to reduce the price of £105,000 p.a. Vertex also withdrew the newer and more effective drug Symkevi from the approval process, which means it will not be available to any NHS patients. Campaigners are asking Matt Hancock to set aside Vertex's patent to allow cheap versions to be made via Crown use licensing, costing ~£5,000 p.a. instead.ref,ref
  • Jun.2018: Price = $272,000 p.a. New York State was seriously pissed off.ref
  • 2017: $2.5bn revenue earned from sales of Orkambi; CEO paid $17.2m.ref
  • Jul.2015: FDA approved the drug.ref,ref

Kalydeco

Known generically as Ivacaftor, Kalydeco is the first drug that treats the underlying cause of cystic fibrosis rather than just the symptoms, slowing the rate of decline in lung function.

  • 2014: Price = $300,000 p.a.ref
  • 2014: The CF Foundation sold the rights to the royalties for $3.3bn to Royalty Pharma, an investment firm that specializes in buying such assets.ref The Foundation decided to cash in so it could invest in research sooner.ref It is very clear the $3.3bn payout was down to (a) greed on the part of the Foundation (its CEO had a nice salary of ~$1m in 2014), and (b) the extraordinary price that Vertex / Royalty Pharma chose to charge, especially given that it is an orphan drugWikipedia-W.svg.
  • Jan.2012: Price = $294,000 p.a. The US Food and Drug Administration approved the drug.ref
  • May.2001: Vertex acquired Aurora for its screening technology.ref Cystic fibrosis was not a priority, and Vertex officials said the program might have been dropped if the foundation had not been paying for it.ref
  • 1990s: The Cystic Fibrosis FoundationWikipedia-W.svg invested $150m in Aurora Biosciences, a small San Diego company, to see if its technology for screening compounds could find drugs that might work for cystic fibrosis.

Symdeco

ToDo: website

Incivek

Telaprevir is a protease inhibitor, and an oral treatment for hepatitis C. Development and commercialisation is shared with Johnson & Johnson for European distribution, and Mitsubishi for Asia.ref

  • Oct.2014: Incivek was discontinued due to decreasing market demand.ref
  • May.2011: Incivek: FDA approved the drug.
  • Jul.2006: Vertex said it expected to receive $545m in milestone payments plus additional royalties, from Johnson & Johnson as part of an agreement to market and develop Vertex's promising hepatitis C drug, VX-950. Vertex will retain commercial rights to the drug in the USA, while Johnson & Johnson will sell it in most other areas of the world, except Asia, through its Janssen Pharmaceutica NV division.ref

Other