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Vertex (VRTX) Ends Further Study on AAT Deficiency Candidate

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Vertex Pharmaceuticals Incorporated (VRTX - Free Report) announced that it will not pursue late-stage development of its investigational oral small molecule corrector, VX-864, being evaluated for the treatment of alpha-1 antitrypsin deficiency (AATD).

The decision was taken despite a phase II study on the candidate in AATD, an inherited condition that raises risk of lung and liver disease, achieving its primary endpoint. Data from the study showed that treatment with VX-864 (across all three dose groups) led to a statistically significant increase from baseline in functional levels of alpha-1 antitrypsin (AAT), a protein mainly produced by the liver, as compared to placebo over 28 days of treatment. Treatment with VX-864 resulted in a mean increase of 2.2 to 2.3 micromolarin plasma functional AAT levels across all dose groups compared to placebo. Similarly, treatment with VX-864 also led to statistically significant increases in antigenic AAT levels (mean increase of 2.7 to 3.5 micromolar) compared to placebo. The candidate also demonstrated a favorable safety profile.

Though the data provided proof-of-mechanism, the company believes that the magnitude of treatment effect observed in the study is unlikely to lead to any substantial clinical benefit.

Vertex’s shares declined around 13% in after-hours trading on Thursday after the decision was announced. Vertex’s stock has declined 8.3% this year so far against an increase of 0.1% for the industry.

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Vertex will instead advance other novel small molecule correctors into clinical development in 2022, which have the potential for increased clinical efficacy.

We remind investors that in October last year, Vertex had dropped development of another small molecule corrector for AATD, VX-814, based on the safety and pharmacokinetic (PK) profile of VX-814 observed in a phase II study. The study was being conducted to evaluate the ability of VX-814 to increase plasma functional AAT levels over 28 days of dosing. However, elevated liver enzymes were observed in several patients, which were more than normal limits. Meanwhile, exposure levels were low as observed in the analysis of PK data from the study, which the company believes would make it impractical to safely reach targeted exposure levels and thus meaningful increases in AAT levels.

Vertex’s main focus is on the development and marketing of its cystic fibrosis (CF) franchise. However, it also has an early-stage portfolio in other specialty disease areas. Other than AATD, these disease areas include pain, sickle cell disease, beta-thalassemia and APOL1-mediated kidney diseases. AATD was viewed by some investors as the most meaningful program in Vertex’s non-CF pipeline and the failure of two candidates in this program is quite a setback for the stock.

Zacks Rank and Stocks to Consider

Vertex currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the healthcare sector are BioNTech (BNTX - Free Report) , Regeneron Pharmaceuticals (REGN - Free Report) and Repligen Corporation (RGEN - Free Report) . While BioNTech has a Zacks Rank of 1, Regeneron and Repligen carry Zacks Rank #2 (Buy).

BioNTech’s earnings estimates have risen from $20.14 per share to $30.71 per share for 2021 and from $8.70 per share to $25.05 per share for 2022 in the past 30 days. The stock is up 194.2% this year so far.

Repligen’s earnings estimates have risen from $2.21 per share to $2.26 per share for 2021 and from $2.53 per share to $2.56 per share for 2022 in the past 30 days

Regeneron’s earnings estimates have risen from $49.48 per share to $49.51 per share for 2021 in the past 30 days. The stock is up 10.2% this year so far.

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