Will The FDA Approve A Label Expansion For Vertex’s Blockbuster Cystic Fibrosis Drug Orkambi?

By Killian McKee, Slingshot contributor

This week we examine the probability of Vertex Pharmaceuticals’ (NASDAQ:VRTX) cystic fibrosis drug Orkambi being granted an FDA label expansion to treat 6- to 11-year-olds. Currently, this highly profitable CF drug treats patients over the age of 12 with two copies of the F508del mutation. Investors should be interested because VRTX will increase the U.S. F508del CF market size by about 16% if it is able to begin treating 6- to 11-year-olds. Vertex is the only major player in the F508de CF market. Let’s take a deeper look at CF, the market, and what sort of impact relabeling might have on Orkambi.

What’s the Situation?

Cystic fibrosis is a serious genetic disease causing frequent lung infections, a reduced ability to breathe over time, and a thick buildup of damaging mucus in other organs. There are around 1,800 variations of CF dependent on which specific genes are defective in an individual. One of the most common types involves having two copies of the F508del mutation. Around 30,000 people in the U.S. suffer from some form of CF, with 50% suffering from the F508del variety. 2,500 people over the age of 12 in the U.S., Canada, and Australia are eligible for treatment with Orkambi, with an additional 2,400 ranging in age from 6–11.

The total CF market size is projected to be around $4 billion by 2019. Currently, treatments for CF typically aim to address the symptoms, but not the underlying cause of the disease. Until recently, ivacaftor (present in VRTX’s Orkambi and Kalydeco) was the only FDA approved drug treating the underlying symptoms of some types of CF. Clearly, the market holds high profit potential for those drugs’ ability to treat the underlying aspects of the disease.

A Brief History of Vertex and CF

VRTX developed two CF drugs, Orkambi and Kalydeco. Orkambi treats patients over the age of 12 with the F508del mutation, while Kalydeco treats those over the age of 2 with a variety of less common mutations. Our focus is on Orkambi because of its potential for a label expansion.

In 2015, Orkambi became the only FDA approved treatment for the most common type of CF. Orkambi works by combining ivacaftor and lumacaftor to correct the misfolded protein that results from the F508del mutation. The drug has proven profitable; VRTX made $223 million in revenues the first quarter of 2016 and expects around $1 billion by the end of the year.

What Has the Data Shown?

In June 2016, VRTX presented data on a Phase 3 study examining the efficacy of using Orkambi to treat 6- to 11-year-olds. The results demonstrated the drug was well tolerated with 4 severe adverse events out of the 58 children tested. The FDA set a target date for review of 9/30/16.

What Else Should You Know?

  • VRTX recently completed enrollment for a similar six-month Phase 3 study seeking a label expansion in the European Union to treat 6- to 11-year-olds with Orkambi. There are about 3,400 eligible patients in this age range.
  • VRTX’s most recent Phase 3 trial evaluating Orkambi in 6- to 11-year-olds failed to meet its secondary endpoint of forced expiratory volume in one second, only showing a P value of 0.067.

What’s the Next Step?

Speaking to a CF expert that currently treats a large number of patients with Orkambi and is familiar with the current data from the open label study that forms the basis of the sNDA application. Talking to an expert could help clarify what decision the FDA will make regarding a label expansion, and how this will impact Orkambi’s ultimate influence on the CF market.

Questions for a CF Expert:

  • How many CF patients do you currently treat? How many are on Orkambi? How effective do you think Orkambi is as a treatment?
  • How important is an official label expansion from the FDA for the 6- to 11-year-old population to you when deciding if a patient should go on Orkambi? Do you currently have patients on the treatment? If a patient that would fit the new label is not currently on treatment is that due to clinical reasons or something payor?
  • Do you think the data for Orkambi supports a label expansion in this patient population?
  • The trial missed the secondary endpoint of forced expiratory volume in one second, only showing a P value of 0.067. How important do you think this is?
  • Do you think it is reasonable for investors to look to the fact that Kalydeco was approved for 2–5 year olds despite missing this endpoint in its own Phase 3 study?
  • What would you expect from the E.U. assuming the six-month trial demonstrates similar results to the most recent data?
  • Are there any characteristics you think the FDA will consider about Orkambi beyond the data i.e. anything we should keep on the radar we might have missed about the drug?
  • Management has recently begun warning that profits might not be quite as high as they initially projected due to a dip in refill rates. Why would patients forgo refilling if it is such an important treatment? Would these reasons hold true across all age ranges of the patient population?

Conclusion

Orkambi effectively treats the most common type of CF and makes VRTX steep profits. Currently, the drug is only available to those ages 12 and above, but a supplemental new drug application being reviewed this September could expand this range to ages 6+. An approval would open VRTX’s market while increasing treatment options for patients. Interviewing a CF expert could help investors gain a better perspective into the chances of a label expansion and allow them to make more diligent investment decisions.

How To Participate in the Expert Call

Users interested in participating in the VRTX expert call can join the project and add their questions for the expert. The call will be free for current Slingshot Insights members. Users can listen live or to a recording that will be available immediately after the call, on the project page.