However, Vertex reduced their percentage of improved patients, from 45% down to 35%, marking a significant loss in patient improvement. In addition, Vertex said the trial showed 19% of patients experienced a 10 percentage point improvement or more, below the 30% it had first seen. Vertex shares remain above their price of $37.41, where they were trading when the company originally reported the data on May 7.
Chairman and Chief Executive Jeffrey Leiden told analysts on a conference call that the discrepancy stemmed from a misinterpretation of data provided by an unidentified third-party vendor. Vertex’s earlier release judged patients’ relative improvement rates compared with a placebo rather than reporting improvements on an absolute basis. Leiden called the misstep “disappointing” but said final data from the combination’s Phase II study, slated for release mid-year, “will trump all of this.” With aims of treating a broader population of cystic-fibrosis patients, Vertex conducted the midstage trial of its approved drug Kalydeco and an experimental drug, VX-809, in adults with two copies of the most common mutation in a gene dubbed F508del. While the lower report has caused the stock price to drop significantly, many analysts still have high hopes for Vertex and view VX-809 to have blockbuster multibillion dollar potential in the future. The initial results were significantly above Wall Street expectations and brightened prospects for Vertex, whose shares were under pressure late last year as it appeared the company was losing ground in the race to bring the next generation of hepatitis C treatments to market.
Vertex Pharmaceuticals posted a net income of $296.06 million in April 2012 with earnings at $.14 per share. Currently, EPS estimates for Q2 2012 sit at $.63 with the next earnings report out at on July 27. Based in Cambridge, Massachusetts, Vertex is an American biotechnology firm focusing on viral infections, inflammatory and autoimmune diseases, and cancer research.
Contributor Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com
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