On Monday, Vertex Pharmaceuticals secured approval of a new cystic fibrosis drug. Margot Cleveland bought steaks.
She was in the mood to celebrate. Cleveland’s son, 10, was born with cystic fibrosis. He recently started taking an older Vertex medicine, but hopes to switch soon to the newly approved drug, called Trikafta. Life with cystic fibrosis was about to get a lot less stressful.
“When you first hear the diagnosis about your newborn, that’s the worst. You think the worst,” said Cleveland, an adjunct professor at the University of Notre Dame and a contributing writer to The Federalist. “But when Vertex’s first drug came out, we knew they had cracked the code and that a drug would eventually come for us. Now, I know that my son’s lungs will function as well as mine. That’s just unbelievable.”
The Food and Drug Administration’s press release announcing the Trikafta approval didn’t mince words. The medicine is a breakthrough for nearly every person living with cystic fibrosis.
How Vertex came to invent Trikafta is an exceptional story. Few medicines are as effective, or as life-changing, as this one is expected to be. The basic research that led up to the moment took a generation, but development moved incredibly fast once the biology of cystic fibrosis was cracked. Trikafta is likely to save lives, yet it comes with a high price — $311,000, likely covered by insurance. Its arrival has seemed certain from the outside for years, yet several times, it almost didn’t happen.
Trikafta is a “transformative medication which is going to significantly improve outcomes for people with cystic fibrosis,” said Dr. Mike Boyle, senior vice president of therapeutics development at the Cystic Fibrosis Foundation, which funded the early research on Vertex’s cystic fibrosis drugs.
Cystic fibrosis is an inherited disease in which thick, sticky mucus builds up in organs including the digestive system and, most seriously, the lungs. It is often fatal in early adulthood. Most previous treatments have only slowed the inevitable decline of patients’ lungs. Trikafta increased the amount of air patients could expel from their lungs in one second by an average of 14%.
“That’s a game-changer for people with cystic fibrosis,” said Dr. Steven Rowe, director of the Cystic Fibrosis Research Center at the University of Alabama at Birmingham.
A previous drug, Kalydeco, also from Vertex, was similarly effective. But Kalydeco only helps 6% of the 30,000 Americans who live with cystic fibrosis, which is caused by many different genetic mutations. Trikafta, a combination of three medicines, including Kalydeco, can help 90% of cystic fibrosis patients. That leaves 10% without a new treatment.
Trikafta has also made Vertex one of the most successful companies in biotech by any measure. It is Vertex’s fourth cystic fibrosis medicine approved since 2012, a superlative scientific and regulatory performance. Vertex revenue has tripled and its stock price has soared more than fivefold.
For Vertex chief executive Dr. Jeffrey Leiden, Trikafta’s approval is a triumph that comes just months after he announced his retirement as CEO next year, though he will remain as chairman.
“When I started at Vertex in 2011, I promised employees and patients that we would not stop until we had a treatment for nearly everyone with CF,” Leiden said. “So, for me — and I’m the old guy here — this is a great way to end a career. We have conquered a disease. You don’t get to do that very often in this business.”
Leiden leaves his successors with twin challenges. They must convince the world that the new drug is worth its price, which is roughly the same as Kalydeco even though Trikafta treats nine times as many patients. And then the company must repeat the success story in other diseases.
When the gene for cystic fibrosis was discovered in 1989, the New York Times trumpeted that “the prospects for saving the lives of people with cystic fibrosis have been greatly enhanced.” Yet a decade later little progress had been made.
Robert Beall, then the CEO of the Cystic Fibrosis Foundation, went searching for a drug company that would try to take on the disease, which affected 30,000 people in the U.S. and was considered too rare for most companies to target. He found no takers save Aurora Biosciences, a San Diego company founded by chemist Roger Tsien, who would later share a Nobel Prize in 2008.
In 2000, the CFF agreed to fund drug discovery work in cystic fibrosis at Aurora with $47 million over five years. One year later, Vertex bought Aurora for $592 million in stock (biotech firms had valuations inflated by the e-commerce boom) but it wasn’t clear if Vertex had interest in continuing Aurora’s cystic fibrosis research. In the 2014 book “The Antidote,” Vertex’s chief business officer said the company eventually decided to keep Aurora’s cystic fibrosis program alive because the CFF’s funding — which came without any demand for a future payoff — was “a less expensive form of financing.”
With Vertex’s commitment secured, an Aurora researcher, Paul Negulescu, took charge of what was now Vertex’s San Diego laboratory. He believed strongly in the cystic fibrosis program. Another researcher, biologist Eric Olson, helped lead the efforts to find the first drugs that worked on CFTR, a protein that when mutated or missing, causes cystic fibrosis.
The team needed to determine how to know whether potential CFTR-modulating medicines were working. Biologist Frederick Van Goor, hired at Aurora on the day the Vertex acquisition was announced, came up with the solution. Van Goor’s fix used cells derived from human bronchial tubes to test the potential of drugs. In healthy people, these cells, which are long and hairlike, sway freely like windblown grass. In people with cystic fibrosis, the bronchial cells look like they’re stuck in the mud, barely moving at all.
Sabine Hadida, a chemist, led the creation of a drug that broke many of the rules of traditional chemistry. It was hard to even dissolve it in water. But when Van Goor introduced it to the claggy bronchial cells cultivated from patients with a specific cystic fibrosis mutation, those cells started to move again.
It was a dramatic discovery. Vertex’s cystic fibrosis program was building momentum. By 2008, longtime Vertex CEO Joshua Boger said he “couldn’t stop this program if I tried.” But for Vertex management and its investors, cystic fibrosis remained a sideshow.
At the same time that Vertex’s early work on cystic fibrosis was showing promise, other scientists at the company were nearing the completion of clinical trials showing for the first time that a drug was capable of directly attacking the hepatitis C virus. This groundbreaking medicine, called Incivek, was approved in 2011. Incivek not only dramatically increased the cure rate for hepatitis C compared to prior therapies, but it did so in less time.
The drug was a commercial blockbuster, catapulting Vertex into profitability for the first time. The company moved ahead with plans to relocate its employees from a ramshackle collection of older buildings in Cambridge, Mass., to brand new, twin office towers overlooking Boston Harbor.
It didn’t take long for Vertex’s hepatitis C business to run into trouble. Incivek sales peaked at $1.1 billion in 2012 but declined just as quickly. New, more effective hepatitis C drugs from rival companies like Gilead Sciences entered the market. Vertex’s future was threatened.
Leiden, who had been on Vertex’s board of directors since 2009, became its chief executive in February 2012. Dr. David Altshuler, a prominent geneticist who has since become the company’s chief scientific officer, was also a director. He remembers a July 2012 board meeting at which Leiden laid out Vertex’s options in stark terms.
Vertex could double down in hepatitis C, but it would mean abandoning all of its other disease programs. Or, the company could put itself up for sale and let an acquirer sort out a future path. The course of action Leiden recommended, however, was different. He wanted Vertex to make a big bet on cystic fibrosis. This would mean laying off hundreds of people and losing money again, but Leiden believed a shift to developing cystic fibrosis drugs could return Vertex to profitability.
“The part that’s so amazing,” Altshuler said, “is that there were like 14 things that had to go right.”
Kalydeco, Vertex’s first cystic fibrosis drug, was approved in January 2012, just before Leiden was stepping into the CEO job. By 2013, the drug had delivered sales of $371 million. That was a good start, but Kalydeco was only capable of treating about 4% of cystic fibrosis patients. Learning a hard lesson from its hepatitis C failure, Vertex knew it needed to invent additional drugs and combine them together so that more cystic fibrosis patients could be treated effectively.
The work also needed to be done fast. Fortunately, Vertex had come to have great confidence in the ability of those wavy, hairlike bronchial cells. If a potential drug made those bronchial cells in a Petri dish sway, Vertex moved quickly into clinical trials.
“We had amazing biomarkers that were highly predictive of efficacy, and this allowed us to move fast from small, 20-patient clinical trials directly into large Phase 3s,” Leiden said.
Vertex’s second cystic fibrosis drug, Orkambi, was approved in 2015. That was followed by Symdeko in 2018. Both products were two-drug combinations (backboned by Kalydeco), which dramatically expanded the number of cystic fibrosis cases that could be treated. But Orkambi and Symdeko were also less effective.
If two drugs could work together, then why not three drugs? And if three drugs are more effective, why not test multiple triplet regimens at the same time, and choose the best one? This was Vertex’s next big push. It was an unusual decision to make, but it sped up the development process and decreased the risk of failure, Leiden said.
Vertex moved four different triplet regimens into the clinic. When clinical trial readouts emerged, the results were so similar that Vertex has a hard time choosing a winner. Normally, developing a new medicine takes 15 years. Trikafta came together — from synthesis in the lab to approval — in just three years.
“In seven years, we went from being able to treat a handful of cystic fibrosis patients to treating 90% of them now, with Trikafta. That’s historic. It’s never been done in the industry before,” said Leiden.
The addition of Orkambi and Symdeko to Vertex’s cystic fibrosis business helped the company grow revenue to $3 billion in 2018. This year, with a small boost from the early launch of Trikafta, Vertex expects total sales to exceed $3.7 billion. Five years from now, analysts forecast Vertex’s cystic fibrosis drug sales to exceed $8 billion, without any significant competition.
But to reach that lofty revenue potential, Vertex needs to convince the world to pay for its inarguably potent medicines at a time when drug prices are a topic of national passion. Some countries, including Britain and France, have balked at paying for Vertex cystic fibrosis drugs. The Institute for Clinical and Economic Review, a U.S. group that analyzes drug value, has concluded that Vertex’s cystic fibrosis drugs “far exceed standard cost-effectiveness levels.”
And Wall Street can be fickle. Vertex’s stock price has remained relatively flat over the past year, largely because investors anticipated Trikafta’s approval. The billions of dollars in sales that the drug is expected to deliver are also somewhat baked into Vertex’s current $49 billion market value.
Investors are certainly cheered by Vertex’s cystic fibrosis success but they also want to see the company diversify, so it doesn’t rely solely on cystic fibrosis like it once did with hepatitis C.
Vertex believes it can be successful in other rare diseases. Among the new projects being followed most closely are experimental Vertex drugs targeting alpha-1 antitrypsin deficiency (AATD), a disease whose pathology the company believes mirrors cystic fibrosis in important ways. AATD is like a “twin sister” of cystic fibrosis, Leiden said.
Vertex has also partnered with CRISPR Therapeutics on genome-editing therapies for beta thalassemia and sickle cell disease.
The company will be guided by Dr. Reshma Kewalramani, who will become Vertex’s CEO when Leiden steps down.
“We have conviction that we are going to be able to do this very intricate dance, run this orchestra, play this football play, whatever analogy you want to use across a very complicated organization,” Kewalramani said. “To do this at this speed.”
Correction: A previous version of this story misstated Mike Boyle’s title.