From no treatment at all, to treatments that do not work well, new therapies are reaching the market, probably this month or next, moving hepatitis C virus (HCV) victims from the dark zone of desperation into the light of amazing anticipation – probably of a cure. We don’t know if the opening statement is one of those run-on sentences, from which you might have lost your breath trying to read it to your spouse, but we know with certainty that the news coming from Vertex’ (VRTX) drug is breathtaking. The road has been long, very long, yet, this is always the case when new molecules are designed to become drugs for life-threatening diseases that have yet to find treatments. The fact is that it is a real miracle just finding a road towards conquering a disabling virus that disrupts the functioning of one of the major vital organs. HCV could cause fibrosis (cirrhosis) of the liver, which could, sometimes, necessitate liver transplant or cause cancer.
Delving into treatments having direct action on hepatitis C virus, which did not exist before, we observed dozens of drugs that both biotech and pharmaceutical companies have advanced into clinical trials. The majority of the drugs are either protease inhibitors or polymerase inhibitors with a few drugs acting on different pathways. So, from no effective drugs, there are now many on the horizon. This is good news for the desperate patients and for the biotech industry. It demonstrates how far biotechnology can go towards bringing drugs capable of solving problems of intractable diseases that had yet to find treatments. Some of the potential future HCV drugs demonstrate improvements over the first generation protease inhibitors that are due to hit the market, which is what normally happens after the launch of the first breakthrough drugs.
That said; let us see where we are now in the treatment of HCV. Out of the approximately twenty new products in trials, only four have reached Phase III; all four of the drugs are protease inhibitors. Among them, two have successfully completed the final phases after being administered to thousands of patients in the advanced Phase trials. These lucky drugs are telaprevir from Vertex (VRTX) and Boceprevir (aka Victrelis) from Merck (MRK). They are expected to reach the market in a few weeks.
This is great news that deserve celebration, rather than digging for the negatives in order to discourage investing in VRTX. For years, the company has been target for negative campaigns of all sorts, from spraying skepticism towards telaprevir’s efficacy to exaggerating the drug’s adverse effects. These claims wouldn’t work now, as everybody knows that the drug will be approved. Attempts to use competition as a threat to telaprevir would not work either as the competing drugs are still many years behind approval and Vertex itself has three more improved drugs for HCV.
Moreover, telaprevir is not all Vertex’ good news about successful value-generating accomplishments. Positive results have also come from clinical trials on VX-770 oral drug, targeting a defective protein that causes cystic fibrosis in children with mutation in the CFTR gene. The results demonstrated undeniably striking improvement in children’s lung function, in addition to significant improvements in weight gain and reduction in sweat chloride, which, again, confirms improvement. Pediatric pulmonologists hailed VX-770 results and professors in academic institutions and hospitals have already begun to lecture pediatricians on the advantages of Vertex’ new drug.
Investing: Vertex has a lot to offer. Plenty of reasons motivate us to trust this firm on our money. We will soon see telaprevir making a substantial penetration of a very large market with or without the countries that critics claim have decided not to reimburse for the drug. A filing for approval of VX-770 is expected to follow this year. A third drug, VX-765 has demonstrated promising results on resistant epilepsy - a big problem for neurologists and a life-threatening torturing condition for patients. We expect the firm to generate billions of dollars from selling these drugs. As for the competition, it does not worry us. The firm has its own long-term strategy. For each disease it tackles, Vertex has programs that guarantee the availability of improved new generation drugs in its pipeline These backups include three additional improved HCV drugs and two additional cystic fibrosis drugs. We trust this firm for these reasons and for other reasons that relate to its professionalism, technological capability, accuracy and prudence.
We are long on Vertex.