Shares of Vertex Pharmaceuticals (VRTX) are up 7% after a panel of Federal Health advisers agreed that Orkambi should be approved for Cystic Fibrosis patients. The panel voted 12-1 for approval even though the panel had some doubts about whether or not Orkambi showed a huge statistical improvement in lung function or not.
This new combo treatment, known as Orkambi, combines Kalydeco and a new cystic fibrosis drug from Vertex lumacaftor. Kalydeco was approved by the FDA back in 2012 for cystic fibrosis patients. Kalydeco was approved for a rare form of cystic fibrosis which only has about 2,000 patients at the age of 6 years and older in the U.S.
Orkambi will now target a higher population of the cystic fibrosis patients. It will target 8,500 patients in the U.S. that are 12 and older. The measure for all cystic fibrosis endpoints in clinical trials is improvement in lung function. The FDA panel advisers were conflicted because while Orkambi obtained a statistically significant improvement of lung function by 2% to 3%, it was no where near Kalydeco’s improvement of lung function by 10%.
The FDA is now set to decide upon approval by July 2015 and will take the FDA panel advisers’ recommendation into play. The FDA can go against the panel’s recommendation, but that typically doesn’t happen. Many analysts are expecting a peak value of $5 billion dollars for Orkambi, and the drug could be closely priced to Kalydeco. Kalydeco commands a $300,000 dollars in one year per patient. No matter what price Orkambi is set at, it will definitely generate billions in revenue for Vertex.
