Vertex Pharmaceuticals Incorporated (VRTX) Nears FDA Approval For Cystic Fibrosis Drug

A potential blockbuster drug for cystic fibrosis developed by Vertex Pharmaceuticals has cleared a major regulatory hurdle, putting it on track to receive final FDA approval this summer. An independent scientific advisory panel on Tuesday recommended the highly anticipated specialty drug Orkambi for FDA approval. Boston-based Vertex projects the new medicine will bring in billions of dollars and help the company reach profitability for only the second year in its 26-year history. Vertex has a market value of $30 billion, which is one of the highest among biotechnology companies.

The FDA’s Scientific Advisory Committee, a group of independent experts, heard presentations from FDA staff, Vertex representatives and patients before recommending Orkambi for approval on Tuesday. Though the FDA is not required to follow the committee’s advice, a drug that secures the group’s recommendation is nearly always approved.

Dr. Bonnie Ramsey, a lead investigator in the company’s clinical trials and a professor of pediatrics at the University of Washington, closed the company’s presentation by saying access to Orkambi “will have a major impact” on patients, the Street reported.

Orkambi is a pill taken twice daily that treats a particular genetic mutation known as F508del that causes cystic fibrosis in about half of patients with the disease, according to the Cystic Fibrosis Foundation. In the U.S., about 30,000 people have cystic fibrosis and roughly 70,000 suffer from it worldwide. The disease, for which there is no cure, affects the lungs and other organs and makes breathing and digestion difficult.

Orkambi’s approval should help Vertex live up to analysts’ expectations that the company could earn as much as $1.1 billion in revenue in 2016. If the company is finally profitable in any of the next three years, executives will receive more than $53 million in retention bonuses, as the Boston Globe reports.

The new pill is the latest to debut in a class of medicines known as combination therapies that join two existing drugs into one medicine. This approach is popular with pharmaceutical companies because it provides a way to quickly create new drugs by repurposing existing treatments. The market for combination products is projected to grow by 7.9 percent through 2019 and reach an estimated value of $115 billion, according to an analysis by Transparency Market Research.

Orkambi combines a drug called Kalydeco, which already has been used to treat some cystic fibrosis patients, with a medicine known as Lumacaftor. Both are produced by Vertex. In Tuesday’s presentation, Vertex representatives tried to show the FDA panel that the combination of these drugs proved more effective than Kalydeco alone. Clinical trials showed that Orkambi improved lung function in patients by 2.6 percent to 4 percent above existing drugs, which some critics said did not represent a meaningful improvement.

Though the FDA does not consider a drug’s cost in the approval process, the price of Orkambi was the “pink elephant in the room,” as the Street posted in a live blog of the hearing. Kalydeco is priced at $300,000 for one year of treatment and the price of Orkambi has not yet been disclosed.