Vertex Pharmaceuticals Incorporated'sVRTX efforts to expand the label of its cystic fibrosis (CF) treatment, Kalydeco, suffered a setback with the FDA issuing a Complete Response Letter (CRL). The company is looking to get Kalydeco approved for use in CF patients (ages 2 and older) who have one of 23 residual function mutations in the cystic fibrosis transmembrane conductance regulator (CFTR) gene.
The agency said that the application cannot be approved in its present form. Vertex's regulatory application was based on preclinical data for Kalydeco in residual function mutations, the established clinical profile of the treatment and previously reported data from an exploratory phase IIa study.
Kalydeco is currently approved in the U.S. to treat CF patients (ages 2 and older) who have one of 10 mutations in the CFTR gene ((G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N, S549R or R117H).
The CRL is disappointing as label expansion into this indication would have provided the company with access to more than 1,500 patients in the U.S. Currently, there is low visibility on the FDA's requirements for gaining approval - the company intends to meet with the FDA to determine the path forward. Shares were down 5.6% on the news.
Kalydeco, which brought in sales of $631.7 million in 2015, is expected to generate sales in the range of $670 - $690 million in 2016. Growth rate in patients on Kalydeco will be tempered by enrollment in the VX-661 program.
Meanwhile, investors will remain focused on the performance of the company's recently launched CF treatment, Orkambi. Vertex did not provide any guidance for Orkambi sales - the company said the same will be provided as the product launch progresses. The company is currently working on gaining country-by-country reimbursement in the EU where Orkambi was approved in Nov 2015. 2016 Orkambi sales will include that generated in the U.S. and Germany.
Vertex is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Ligand Pharmaceuticals Inc. LGND , Fate Therapeutics, Inc. FATE and Celgene Corp. CELG . All three are Zacks Rank #1 (Strong Buy) stocks.