Vertex Pharmaceuticals, Kadmon Holdings Are Early Week Biotech Movers

vertex

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a big mover in the biotechnology space at the start of this week, with the action rooted in an FDA announcement hitting press during the session on Monday.

At the start of trade, the company reported that the agency in the US has given a regulatory green light to a drug called Symdeko, which is a combination of tezacaftor/ivacaftor and ivacaftor, in a targeted indication of cystic fibrosis (CF). Specifically, it’s targeting CF in people ages 12 and older who have two copies of the F508del mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene or who have at least one mutation that is responsive to tezacaftor/ivacaftor.

That sounds like a pretty convoluted target right off the bat, but it’s actually a pretty large market. Cystic fibrosis is one of those conditions for which certain treatments work incredibly well in one group of patients but are pretty much useless in number and, as such, the addition of a fresh treatment to the array of options already available is a real bonus for both the population suffering from CF and the company that manages to pick up a green light for the asset.

Additionally, and as an important point, Symdeko is a drug that treats the underlying condition (i.e., the cause of CF) as opposed to just the symptoms – mucus buildup, pain, etc. – as is the case with many of the currently available assets on the market.

it’s ability to go after the root cause of CF as opposed to the symptoms means that it has the potential to not only relieve people of more negative implications of the disease but potentially also halt and even reverse severity progression.

And this is nothing new for Vertex – the company already has two assets of this type on the market, with Symdeko rounding off what could easily become a multibillion-dollar portfolio within the next few years.

Another big mover during the late session on Monday was Kadmon Holdings, Inc. (NYSE:KDMN). This one is rooted in an asset that’s slightly behind Vertex and Symdeko from a development perspective but in terms of market response, it’s had a far bigger impact.

Specifically, then, Kadmon just announced the release of topline data from a phase 2 trial that was set up to investigate a drug called KD025. The company is trying to show that this one can be used as a treatment for patients with idiopathic pulmonary fibrosis (IPF) and, specifically, those patients who were previously treated with or offered pirfenidone and/or nintedanib (the latter two of these are standard of care treatments in the space right now).

So, what did the data show?

Well, in a nutshell, it looks incredibly strong.

The median decline in forced vital capacity (FVC), which is a gold standard severity metric in IPF patients, as measured at 24 weeks, was 48 mL in the KD025 arm, compared to a median decline of 175 mL in the BSC arm. That equates to a relative difference of 73%, meaning there’s a clear and statistically significant clinical benefit associated with treatment in this patient population.

This drug is also an investigation as a potential treatment for a range of inflammatory conditions, with mild-to-moderate psoriasis being the current lead, and analysts expected could have a peak sales figure of more than $300 million annually by 2020. This assumes an approval in the indication for which the phase 2 trial just hit press as well as for the psoriasis program in the US.

As such, the recent data, which points towards a potential regulatory green light as and when this one goes in front of the FDA, is enough to get markets excited about the potential for long-term topline reward and Kadmon is picking up strength on the back of the release as a result.

Pretty much immediately subsequent to the release hitting press, the company was trading for a 21% premium to its preannouncement market capitalization (the numbers were reported after hours). Right now, Kadmon goes for $5.75 a share, up 18.8% on the $4.84 share at which the company closed out the session on Monday.

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