Vertex Pharmaceuticals Inc. (VRTX) recently reported positive results from a mid-stage study of its candidate VX-765. The study evaluated the safety and tolerability of VX-765 in treatment-resistant partial onset epilepsy patients. The patients, who were enrolled, showed no improvements even after being treated with at least two currently available therapies for partial epilepsy.

Data from the study (phase IIa) demonstrated that the candidate had a similar safety profile as compared with placebo. Positive results from the study have encouraged the company to evaluate the candidate in a larger and longer-duration phase IIb study for the same indication. Vertex Pharma intends to initiate the study by the fourth quarter of 2011.

Last month Vertex Pharma reported positive data from a late stage study (STRIVE) on VX-770. The study evaluated patients suffering from cystic fibrosis (CF).

We note that another key candidate in Vertex Pharma’s pipeline, telaprevir, is currently under regulatory review in the US for the treatment of hepatitis C virus (HCV). The US Food and Drug Administration (FDA) has set May 23, 2011, as the target date for telaprevir.

Vertex Pharma has also completed a New Drug Submission to the Therapeutic Product Directorate of Health Canada, for the approval of telaprevir for treating patients suffering from HCV. The Canadian regulatory body has also granted priority review status to the candidate, bringing down the review time to 6-9 months from the standard 18 months. Moreover, the European Medicines Agency (EMA) accepted telaprevir for accelerated review in December 2010.

The company has joined hands with Johnson & Johnson (JNJ) and Mitsubishi Tanabe Pharma for telaprevir. While Johnson & Johnson is responsible for the commercialization of telaprevir outside North America and the Far East, Mitsubishi Pharma will market it in Japan and certain areas of the Far East.

Neutral on Vertex Pharma

We currently have a Neutral recommendation on Vertex Pharma, which is supported by a Zacks #3 Rank (short-term Hold rating). The positive data and the eventual approval of VX-765 should aid long-term growth of the company. However, with Vertex Pharma banking on telaprevir, we believe that any delay in the approval of the candidate would weigh heavily on the stock.

 
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