Vertex is expanding the frontiers of cystic fibrosis (CF) treatment by developing “CFTR modulators” - VX-770 (a potentiator) and VX-809 (a corrector). These are drugs that fix the underlying genetic defect in the CFTR protein that causes the disease. Phase III trials of VX-770 are underway; if positive, this first-in-class agent could be on the market in 2012 for CF patients with the G551D mutation. This report reviews the science, the phase II results (for both agents), their implications and caveats. While VX-770 may reach the market with a G5551D label, the main market opportunity lies elsewhere, among patients with the ubiquitous F508del mutation. This report also discusses the likelihood that VX-770 may play a role in that setting as well, and the revenue potential that the F508del segment may represent for the company.

Published: May 6th, 2010

Number of pages: 29

Authors: Dr. Ilana Fogelman and Dr. Joel Braunstein

TABLE OF CONTENTS:
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BACKGROUND
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1. Cystic Fibrosis
− The disease
− The mutations that cause CF
− Mutation prevalence (US and abroad)

2. CFTR Modulators - Overview
− Potentiators
− Correctors

VERTEX’S POTENTIATOR - VX-770
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1. Discovery and in-vitro testing
2. The Phase IIa trial
3. The Ongoing Pivotal Phase III trials in patients with the G551D mutation

VERTEX’S CORRECTOR - VX-809
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1. Discovery
2. Phase II results

OPINION
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1. Vertex is at the forefront of CFTR modulation
2. What can we learn from VX-770’s “in-vitro” pharmacology profile
3. Phase IIa trial suggests activity in vivo, but requires cautious interpretation
4. Sweat chloride test has important caveats
5. How reliable are NPD and FEV1 results?
6. Are there relevant precedents for the sweat test results?
7. Do epidemiologic studies support the use of CFTR modulation as an outcome measure?

THE MARKET OPPORTUNITY
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1. The market opportunity in the G551D population
2. The upside potential for VX-770 in F508del mutation
3. VX-770 as a single agent in homozygous patients
4. VX-770 in combination with correctors (Vertex’s or other companies’)
5. The prospects for VX-809

COMPETITION
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1. Other CFTR modulators in development
2. Competition from other mechanisms of action

CONCLUSION
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