Vertex's VX-661 Has Positive Outlook Despite Futility Finding

Although a study testing a combo of the company's cystic fibrosis drug Kalydeco and the investigational VX-661 in patients with minimal CFTR function was ended due to futility, Vertex is on pace for a 2017 filing of the combo in three other CF subpopulations.

Vertex Pharmaceuticals Inc. revealed that a combination including one of its experimental cystic fibrosis drugs failed to show a significant benefit in one of the most challenging CF subpopulations, but three other Phase III trials of the combo are ongoing with an FDA filing anticipated in late 2017.

The company will terminate the study testing the combination of the firm's first marketed CF drug, Kalydeco (ivacaftor), and the new VX-661, Vertex announced Aug. 15 after the market closed. Vertex's stock price has been largely unaffected by the news, finishing the day down 2.42% to $100.00 on Aug. 16.

The Boston specialty pharma is studying the Kalydeco/VX-661 combo in four Phase III studies expected to enroll more than 1,000 total CF patients – the other three trials will continue.

The company also plans to launch a Phase II study later this year investigating a triple combination in the subpopulation where the tandem of Kalydeco (ivacaftor) and VX-661 failed – CF patients who are heterozygous for the F508del mutation of the cystic fibrosis transmembrane conductance regulator (CFTR) gene and have a second mutation that results in minimal CFTR function.

Kalydeco, a CFTR potentiator, is approved as monotherapy for some CF patients, while VX-661 is a CFTR corrector used to expand the reach of Kalydeco, including in patients with the F508del mutation. Vertex already markets one CFTR corrector, Orkambi (lumacaftor), which is used in combination with Kalydeco. (Also see "Vertex’s Orkambi Approved With Broad Label For Cystic Fibrosis" - Pink Sheet, 2 Jul, 2015.)

In the Phase III study in the so-called F508del het/min subpopulation, 150 patients were enrolled in the first of two parts of the study with an interim futility analysis planned after at least eight weeks of dosing. This interim analysis showed that a pre-specified improvement in lung function had not occurred and the data safety monitoring board recommended that the study be halted, without enrolling the second portion.

Vertex noted that the interim look showed no safety concerns. It plans to include data from the study in its new drug application (NDA) planned for the second half of 2017, and analysts pointed out that the clean safety findings could prove important as the Kalydeco/VX-661 combo could find traction in patients who have halted treatment with Orkambi due to safety and tolerability issues.

In an Aug. 15 note rating Vertex shares "outperform," Leerink Partners analyst Geoffrey Porges said the het/min subpopulation offered both the greatest upside (about 25% of the total CF population), but also the biggest challenge for the two-drug combo. If Vertex were to succeed in getting the combo approved for all four subpopulations being studied in its Phase III program, it would increase the company's pool of treatable CF patients by about 17% (5,800 additional patients) in the US, offering an incremental revenue opportunity of $1.1bn beyond what Vertex currently brings in with Kalydeco and Orkambi.

Approved July 2, 2015, Orkambi got off to a solid start, posting sales of $131m during the third quarter of 2015, with market penetration of roughly 35% of the patients covered by its label. (Also see "Vertex Gears Up For Next Generation In CF Therapy" - Pink Sheet, 29 Oct, 2015.) On July 27, Vertex reported that Orkambi brought in $245m during the second quarter of 2016 while Kalydeco brought in $180m in the same period.

At the time of its approval, some analysts were skeptical of lumacaftor's added benefit to Kalydeco, with one analyst calling lumacaftor "a mediocre drug" that CF patients would be inclined to try to see if it would work, even though its effect on FEV1 in clinical trials was much less than that seen with Kalydeco monotherapy. (Also see "Why Pricing Orkambi Below Kalydeco Is A Savvy Strategy For Vertex" - Pink Sheet, 13 Jul, 2015.)

Incremental Value Over Existing CF Franchise

Success in the three ongoing pivotal studies of the Kalydeco/VX-661 combo could increase Vertex's patient base by about 9% (2,850 patients) domestically, meaning an incremental earnings possibility of about $485m (assuming pricing comparable to Orkambi), Porges said. Beyond safety and tolerability, Leerink projects that the combo could offer patients a 4%-5% improvement in FEV1 (forced expiratory volume at one second) score, compared to Orkambi's 2%-3% improvement, in patients homozygous for the F508del mutation, one of the other Phase III trial populations.

"Unlike most investors, we believe that VX-661 could lift the relatively low adoption of the Orkambi combination [with Kalydeco] to materially higher levels, offering increased revenue potential from existing Orkambi populations and revenue from other, non-labeled indications as well," the analyst said. Porges expects that VX-661 could offer improvements over Orkambi on hospitalizations and exacerbations, as well as on tolerability issues such as drug-drug interactions and metabolic effects.

He predicted that the combo would succeed in the other three Phase III studies – in F508del homozygous patients, for which the regimen has FDA breakthrough therapy designation, patients with one copy of the F508del mutation and a second mutation that results in residual CFTR function, and in patients with one copy of the F508del mutation and a second mutation that results in a gating defect in the CFTR protein.

In an Aug. 15 note, Credit Suisse analyst Alethia Young said futility was widely expected in the het/min subpopulation study. Success in the heterozygous/residual CFTR function trial, however, would be a huge inflection point for Vertex, she wrote, as the company failed earlier this year to obtain FDA approval to add such patients to labeling for Kalydeco. FDA issued a "complete response" letter to Vertex's sNDA to add patients with 23 residual function CFTR defects to the drug's indication, the company announced on Feb. 5. (Also see "Keeping Track: FDA Turns Down Telesta's MCNA, Broader Use Of Vertex' Kalydeco" - Pink Sheet, 8 Feb, 2016.)

Young said her modeling assumes about 1,600 patients will discontinue therapy with Orkambi by the end of 2016, and that the Kalydeco/VX-661 combo could offer the potential to treat some of these discontinuing patients. "The residual population is about 3,000, with 1,500 in the US," she said. "We assume a launch in 2020, but note in the US a positive Phase III residual study may help [Vertex] get to market in this population sooner than our assumption."

Remaining Phase III Studies Progressing

Vertex said the treating the het/min subpopulation is a difficult hurdle, but that it felt obligated to try the Kalydeco/VX-661 combo in these patients because they currently have no treatment options. The company now hopes its triple combination will prove effective in this subgroup and plans to launch a study following completion of Phase I studies in health volunteers of the third, unspecified agent.

On its website, Vertex lists two CF candidates, both next-generation CFTR correctors, in Phase I – VX-152 and VX-440. The company also has VX-371, an inhaled epithelial sodium channel (ENaC) inhibitor, in Phase II for CF.

Enrollment is now complete in the planned 500-patient study in the F508del homozygous population, which will study the two-drug combo for 24 weeks. In all of the studies, VX-661 is being dosed once-daily at 100 mg, while Kalydeco is dosed every 12 hours at 150 mg. Vertex expects data from the homozygous population study in the first half of 2017.

The company expects to complete enrollment in September of the 200-patient study investigating the combo in heterozygous patients with a second mutation that results in residual CFTR function. These patients will receive Kalydeco monotherapy or placebo for eight weeks, followed by an eight-week washout period, and then eight weeks on the combo or placebo. Data are expected in the first half of 2017.

Less far along is the pivotal study in heterozygous patients with a second mutation that results in a CFTR protein gating defect. Enrollment of about 200 patients who will be treated for eight weeks is expected to finish by the end of 2016 or early in 2017, Vertex said.