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Vertex to Buy Concert's Cystic Fibrosis Candidate for $160M
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Vertex Pharmaceuticals Incorporated (VRTX - Free Report) announced a definitive deal to buy the worldwide development and commercialization rights of Concert Pharmaceuticals’ cystic fibrosis (CF) pipeline candidate, CTP-656 for an upfront payment of $160 million in cash.
Shares of Concert Pharma rallied 62% on Monday while Vertex’s share price increased about 1%.
In fact, Vertex’s shares have picked up well in 2017, after declining last year. This year so far, Vertex’s shares have risen 23.4%, outperforming an increase of 10.3% for the Zacks classified Large-Cap Pharma industry.
Vertex plans to develop CTP-656 for potential use in future once-daily regimens in combination with its other pipeline drugs to treat the underlying cause of CF. If CTP-656 is approved for use in combination regimens, Vertex will pay up to an additional $90 million in future regulatory approval milestone payments.
Concert is currently evaluating CTP-656 in a phase II study in patients with CF who have gating mutations. Upon closing of the deal, Vertex will be responsible for the candidate’s development. Vertex will also acquire rights to all of Concert's other CF research and preclinical programs, per the deal.
With purchase of CTP-656, Vertex will get a potential competitor for its triple combo regimen off its back for a reasonable price of 250 million. Also, CTP-656 - a reformulation of Kalydeco - can potentially be dosed once daily while Kalydeco is a twice daily drug.
Meanwhile, the deal should help Vertex maintain dominance in the CF market. Vertex presently markets two CF drugs – Kalydeco (ivacaftor) and Orkambi (lumacaftor-ivacaftor combination). It is also developing many new combination regimens with CFTR modulators. Vertex is evaluating CF corrector VX-661 in combination with ivacaftor. Vertex is also evaluating a couple of next-generation CFTR correctors - VX-152 and VX-440 - as part of a triple combination with VX-661 and ivacaftor. If the triple-combo regimes are successful, Vertex can address a significantly larger CF patient population. The triple combination CF regimens are therefore crucial for long-term growth at Vertex.
The CF market represents huge commercial potential. It is a rare, life-threatening disease estimated to affect about 75,000 people in North America, Europe and Australia. Vertex enjoys a strong position in this market as it is the first company to successfully develop a drug (Kalydeco) that treats the underlying cause of CF.
Undoubtedly, the CF market has been attracting the interest of several companies like AbbVie, Pfizer, Inc. (PFE - Free Report) and Sanofi (SNY - Free Report) . These companies are pursuing the development of CFTR potentiators, CFTR correctors and candidates with other mechanisms of action that can address the underlying cause of CF.
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Vertex to Buy Concert's Cystic Fibrosis Candidate for $160M
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) announced a definitive deal to buy the worldwide development and commercialization rights of Concert Pharmaceuticals’ cystic fibrosis (CF) pipeline candidate, CTP-656 for an upfront payment of $160 million in cash.
Shares of Concert Pharma rallied 62% on Monday while Vertex’s share price increased about 1%.
In fact, Vertex’s shares have picked up well in 2017, after declining last year. This year so far, Vertex’s shares have risen 23.4%, outperforming an increase of 10.3% for the Zacks classified Large-Cap Pharma industry.
Vertex plans to develop CTP-656 for potential use in future once-daily regimens in combination with its other pipeline drugs to treat the underlying cause of CF. If CTP-656 is approved for use in combination regimens, Vertex will pay up to an additional $90 million in future regulatory approval milestone payments.
Concert is currently evaluating CTP-656 in a phase II study in patients with CF who have gating mutations. Upon closing of the deal, Vertex will be responsible for the candidate’s development. Vertex will also acquire rights to all of Concert's other CF research and preclinical programs, per the deal.
With purchase of CTP-656, Vertex will get a potential competitor for its triple combo regimen off its back for a reasonable price of 250 million. Also, CTP-656 - a reformulation of Kalydeco - can potentially be dosed once daily while Kalydeco is a twice daily drug.
Meanwhile, the deal should help Vertex maintain dominance in the CF market. Vertex presently markets two CF drugs – Kalydeco (ivacaftor) and Orkambi (lumacaftor-ivacaftor combination). It is also developing many new combination regimens with CFTR modulators. Vertex is evaluating CF corrector VX-661 in combination with ivacaftor. Vertex is also evaluating a couple of next-generation CFTR correctors - VX-152 and VX-440 - as part of a triple combination with VX-661 and ivacaftor. If the triple-combo regimes are successful, Vertex can address a significantly larger CF patient population. The triple combination CF regimens are therefore crucial for long-term growth at Vertex.
The CF market represents huge commercial potential. It is a rare, life-threatening disease estimated to affect about 75,000 people in North America, Europe and Australia. Vertex enjoys a strong position in this market as it is the first company to successfully develop a drug (Kalydeco) that treats the underlying cause of CF.
Undoubtedly, the CF market has been attracting the interest of several companies like AbbVie, Pfizer, Inc. (PFE - Free Report) and Sanofi (SNY - Free Report) . These companies are pursuing the development of CFTR potentiators, CFTR correctors and candidates with other mechanisms of action that can address the underlying cause of CF.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>