News and Comments


  Wednesday, September 05, 2012



  Tuesday, May 15, 2012

The time has come for redefining the meaning of “creating shareholders value” in the biotech sector. Pinpointing the real value has become imperative. It is the road to a fair assessment of innovative biotech firms. It helps investors reap the fruits of the real value of excellent firms at the right time, rather than rush to sell extremely promising stocks while still undervalued. It makes investors think twice before throwing their shares of firms that are installing one by one the building blocks of their vision. Creating shareholders value is investing in the future. The cost of this investment shouldn’t be cause for downgrading the stocks because of overspending, which has become a normal pattern. We still see all development-stage biotech stock prices slashed following the announcement of their quarterly results. There is a big difference between spending on the future and spending because the money has been made available. Investors can know the difference. The first thing to look for is whether the firm has any program in development that is worth spending on, including buying firms having a technology that is badly required for the successful outcome of the firm’s program. This kind of investment should not be punished or treated as unnecessary spending. More...

FDA Approves KALYDECO™ (ivacaftor) The First Medicine to Treat the Underlying Cause of Cystic Fibrosis

  Tuesday, January 31, 2012

The U.S. Food and Drug Administration (FDA) has approved KALYDECOTM (ivacaftor), the first medicine to treat the underlying cause of cystic fibrosis (CF), a rare, genetic disease. KALYDECO  is approved for people with CF ages 6 and older who have at least one copy of the G551D mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene. More...

VERTEX: First Drugs ever to target the root-cause of cystic fibrosis are promising.

  Monday, June 13, 2011

Like many other chronic progressive intractable diseases, Cystic Fibrosis (CF) pathology is about misfolding of the transmembrane conductance regulator (CFTR) protein as a result of CFTR gene mutations. The malfunctioning CFTR protein loses its trafficking capability and fails to reach the cell membrane, resulting in the accumulation of thick, sticky mucus that plugs the airways and chokes the pancreas. The symptoms are chronic coughing, difficulty breathing, malabsorption of food and nutrients from the intestine, inability to gain weight, diarrhea, or bulky, foul-smelling, greasy stools, or constipation. The disease is debilitating and affects about 100,000 babies, children and adults worldwide. The presence of salty skin confirms the diagnosis of the disease. More...

VERTEX: What About Now?

  Wednesday, May 25, 2011

Yesterday, the FDA approved Incivek (telaprevir), Vertex’ (VRTX) HCV protease inhibitor, which demonstrated in clinical trials it cures more treatment naïve patients and more patients who did not benefit from conventional treatments in much less time than Merck’s Victrelis (boceprevir). Less than a month ago, the FDA Antiviral Drugs Advisory Committee voted 18-0 to recommend approval Incivek for HCV patients with genotype 1 chronic hepatitis. The recommendation was based on clinical trial data demonstrating that combining Incivek with pegylated interferon/ribavirin produced a higher cure rate in less time than standard therapy alone. This improvement is most notable for hard-to-treat patients including those with HCV genotype 1, people with liver cirrhosis, and those who did not respond to a prior course of conventional. Merck's drug Victrelis (boceprevir) also an HCV protease inhibitor, was given a positive recommendation and was eventually approved. More...


  Thursday, May 05, 2011

First, we congratulate our subscribers who did not follow the skeptics and believed in the rationality of science and kept their Vertex’ (VRTX) and Regeneron’s (REGN) shares despite years of negative campaigns against the two firms. Following the rally in VRTX, another rally started in REGN for rational reasons. Both firms are among our TOP TEN selection. More...

VERTEX: Time For Celebration

  Wednesday, April 13, 2011

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. More...

No Role For Serendipity In Vertex' achievements

  Saturday, February 26, 2011

Bad firms do not design and develop chains of breakthrough drugs. Serendipity exists, no doubt about it, but it has no role in Vertex’ (VRTX) accomplishments. Vertex’ products are backed by plenty of science and technologies that are highly appreciated by academia and by well regarded scientists. The time has come for the market analysts to let Vertex’ shareholders share the benefits this firm has offered AIDS patients, patients infected with hepatitis C virus (HCV), and now, as we have just learned from the news, cystic fibrosis patients.  More...

VERTEX (VRTX): At the Finish Line

  Monday, August 09, 2010

When an investigational drug proves it can eradicate a virus we call it a breakthrough. The nearest to approval of the expected breakthroughs is Vertex’ (VRTX) drug telaprevir, a specific hepatitis C virus protease inhibitor. The drug was a blessing for the infected victims who had it in clinical trials. It brought a miracle happy ending to what seemed to be an endless nightmare of acute liver inflammation, chronic liver inflammation, liver cirrhosis, liver transplant and possible liver cancer. We expected telaprevir to be greeted by the government and insurance companies, which spend ton of money on the HCV liver problems where treatments that do not work are, nevertheless, paid for.  More...

VERTEX (VRTX) A Historical Advancement In HCV Management

  Wednesday, May 26, 2010
Better than expected results are announced from phase 3 randomized, double-blind, placebo-controlled ADVANCE study with Vertex’ hepatitis C drug telaprevir. Around 1,095 patients suffering from the genotype 1 chronic hepatitis C virus took telaprevir, which has tremendously increased the cure rate at record treatment duration. Many liver experts considered this news a historical advancement in the management of progressive disabling, life-threatening and sometimes deadly chronic hepatitis C viral infection. First, the drug deals directly with the virus and, second, it wipes it out in a short limited time. The good news will be hailed by 3 millions people infected with the virus in the U.S. and by 170 million worldwide if they hear the news. 

Telaprevir’s trial results demonstrate that 75% of chronically infected patients with genotype 1 hepatitis C virus (HCV) who had not previously been treated achieved a sustained viral response (SVR or viral cure) after receiving 12-week telaprevir-based combination regimen followed by the conventional drugs pegylated-interferon and ribavirin. A slightly smaller number, 69%, of patients,  achieved the same results after a 8-week treatment with the same regimen. On the control arm, where the conventional treatments pegylated-interferon and ribavirin were given alone without telaprevir, only 44% achieved viral cure, but only after 48 weeks duration, i.e., four times the treatment duration with telaprevir. These results are better than scientists’ expectations, including those responsible for developing the drug.  

Considering the debilitating and life-threatening nature of HCV infection, one can imagine how precious telaprevir must be regarded by liver specialists who watch their HCV infected patients suffer progressive liver deterioration and general worsening of their general health. For years they witnessed patients horrified from the possibility of developing liver failure, liver cancer and from death. That’s what HCV causes. Escalating complications beginning with liver inflammation, liver scarring, liver cirrhosis, and, possible liver failure, and sometimes, liver cancer and death.

The trial results, no doubt, have increased our confidence that telaprevir will be the first protease inhibitor to reach the HCV market. Other large pharmaceutical and small biotechnology firms are also developing HCV drugs, yet, their investigational drugs are still in early and mid-term trials. A protease inhibitor, boceprevir, developed by Merck is in late phase trials. The results are expected to be unveiled before the end of the year. (For other small biotech firms developing HCV drugs go to Prohost Letter #302.)

Reaching the market earlier than other HCV products enables Vertex to capture a large part of the market and keep it. Some financial institutions believe that telaprevir could generate $3B in 2-3 years. Others expect larger revenues from the drug sales based on the fact that physicians would like to rid their patients from the virus as soon as possible. Many are convinced that the ideal regimen will be a combination of old drugs with the new protease inhibitor from beginning to end. For a more accurate speculation, however, we believe we should wait for the guidelines when issued to telaprevir’s providers. We must also wait for Vertex to put its price tag on the drug.

Vertex expects to file a New Drug Application (NDA) to the FDA for approval in the second half of 2010 for both treatment-naïve and treatment-failure patients. Vertex plans to launch the drug in the US in 2011. 

The results and the fact that telepravir combination will be given during a shorter time than the conventional drugs are big deal for HCV patients and their physicians. The short treatment duration encourages compliance, which is extremely important for halting the progression HCV complications into liver failure and cancer. Good news also is that we have witnessed a convincing increase in compliance during the numerous trials conducted with with telaprevir. The results represent a huge victory against the nasty HCV virus. 

VRTX is selling at less than $35 with a market value of around $7B. This amount is supposed to reflect the Vertex’ expected revenues from telaprevir (drug is partnered), the royalty payments of Vertex’ marketed HIV drug, and a pipeline that has several investigational drugs, which  include: A product for cystic fibrosis in phase 3 trials; three products in phase 2 trials (not partnered ) for HCV infection, inflammatory diseases, and epilepsy; two products for cystic fibrosis (partnered) in phase 2 trials; and 2 other HCV products (not partnered) in Phase 1 trials. The pipeline has another product in early development for cancer.  We believe the stock is worth much more than its current price. We hold a long position on VRTX with a near-term target $50. More...

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