Vertex is taking the ax to one of their rare disease drugs after evidence of liver damage emerged in a key Phase II study that blocks any uses of the higher doses that would be needed to treat genetic cases of alpha-1 antitrypsin deficiency.
The big biotech had highlighted a similar approach to mid-stage work that got them through major R&D work in cystic fibrosis, which created the foundation the company is built on.
But in the trial of some 50 patients, 4 taking different doses of the drug demonstrated elevated liver enzymes “greater than 8 times the upper limit of normal.”
Those cases resolved, but there’s no getting around the safety barrier now erected against its use among these patients. And the news took a painful 12% bite out of the company’s stock after the bell on Wednesday.
“Based on the liver enzyme elevations observed, along with the determination that we would not be able to safely achieve targeted exposure levels with VX-814, we are discontinuing further development of this molecule,” said Vertex CMO Carmen Bozic in a prepared statement.
For Vertex, the setback could loom larger than any single program might normally warrant. The company, now managed by a new CEO, has to prove to investors that it can go past its big success with CF and prove it can develop drugs for other conditions. Some, like Geoffrey Porges, see today’s fail as an ominous sign.
Investors are likely to question whether the heralded Vertex research capability is really validated beyond CF, and therefore what sort of value the stock deserves beyond the present value of the CF franchise alone. In our sum of the parts analysis, Vertex’s CF franchise alone is worth ~$220-240/share, and this is the range we expect the stock to trade to after this disclosure.
This doesn’t mark the end of the AAT program, though. Vertex has a “structurally distinct” drug dubbed VX-864 in Phase II with data due out in 2021. And they have other backup molecules at the ready in case that program also ends in failure.
Much of the focus in this arena has centered on RNAi drugs from some of the big players, which have been teaming up on clinical efforts. Arrowhead just signed up to partner with Takeda on AAT while Alnylam and Dicerna recently joined forces as well. Vertex had one of the alternative efforts in place.
