Vertex Pharma (VRTX) Announces FDA Approval for ORKAMBI in Children 6-11; Lowers 2016 ORKAMBI Revenue Outlook

Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today announced that the U.S. Food and Drug Administration (FDA) approved ORKAMBI® (lumacaftor/ivacaftor) for use in children with cystic fibrosis (CF) ages 6 through 11 who have two copies of the F508del mutation. People with this mutation represent the largest population of those with CF, a rare, life-threatening disease. ORKAMBI is the first and only medicine to treat the underlying cause of CF for people with this mutation. It was previously approved by the FDA for use in people ages 12 and older with two copies of the F508del mutation. With today’s approval, approximately 11,000 people with CF are eligible for treatment with ORKAMBI in the United States. ORKAMBI will be available for eligible children ages 6 through 11 in the United States as soon as possible. Vertex also today lowered its guidance for 2016 ORKAMBI revenues to a range of $950 million to $990 million.

“The ability to treat children as young as six who have the most common form of the disease is an important milestone as we pursue our goal to develop medicines for all people with CF,” said Jeffrey Chodakewitz, M.D., Executive Vice President and Chief Medical Officer at Vertex. “We believe it is important to treat the underlying cause of the disease as early as possible in these patients.”

The approval is based on data from a previously announced open-label Phase 3 clinical safety study of ORKAMBI presented at the 39th European Cystic Fibrosis Society Conference in June 2016. These data will be presented at the 30th Annual North American Cystic Fibrosis Conference October 27-29 in Orlando, Florida.

Vertex plans to submit a Marketing Authorization Application (MAA) variation in the European Union in the first half of 2017 for children ages 6 through 11 who have two copies of the F508del mutation. This application will be based on data from a Phase 3 efficacy study with a primary endpoint of absolute change in lung clearance index (LCI). These data are expected before the end of 2016.

ORKAMBI Financial Guidance

Vertex today revised its guidance for 2016 ORKAMBI revenues. The company now expects ORKAMBI revenues of $950 million to $990 million. Vertex’s prior guidance was for total 2016 ORKAMBI revenues of $1.0 billion to $1.1 billion, and to date Vertex has reported ORKAMBI revenues of $223 million and $245 million for the first and second quarters of 2016, respectively. Vertex expects third quarter ORKAMBI revenues to be between $230 million and $235 million. The revised guidance primarily reflects the following:

• The slower than anticipated launch in Germany where fewer than 20 percent of the approximately 2,500 eligible patients have initiated treatment to date;
• That we are approaching peak penetration for ORKAMBI in the U.S. where there are approximately 8,500 eligible patients ages 12 and older; and
• Slower than expected refills for ORKAMBI during the summer months of July and August.

Today’s approval in people ages 6 through 11 will drive growth in the U.S. in the fourth quarter of 2016. Growth for ORKAMBI in 2017 will be driven both by obtaining reimbursement approvals in key European and other countries and by continued growth among eligible patients ages 6 through 11 in the U.S.

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