Boston’s most valuable biotech? It’s not who you might expect. – The Boston Globe

“Biogen has been type of the highest canine within the Boston biotech neighborhood for a few years,” mentioned John Maraganore, former chief govt of Cambridge-based Alnylam Prescribed drugs. “However now we see Vertex rising to the highest, applicable to their title.”

How the corporate received there by dominating the drug marketplace for a single long-untreatable illness is without doubt one of the metropolis’s greatest biotech success tales, and it’s not over but.

Extremely, Vertex has constructed its empire by promoting simply 4 life-changing medication for cystic fibrosis, a uncommon genetic situation that predominantly impacts the lungs and digestive system. Due to these capsules, sufferers are respiratory simpler, feeling extra energetic, and beginning to reside longer, too.

The corporate has turn out to be more and more engaging to buyers partly as a consequence of its higher-than-expected gross sales of these medication, which have little competitors on the horizon, and its plans to broaden into different illnesses.

“Vertex has actually benefited from a extra skittish, risk-averse biotech market proper now, and it’s been a kind of distinctive sorts of ‘Goldilocks’ shares that has progress, but in addition has safety,” mentioned Paul Matteis, a biotechnology analyst on the funding agency Stifel.

Over the previous yr, Vertex has unveiled promising knowledge on a non-addictive painkiller that might present an alternative choice to opioids; a gene-editing remedy developed with Cambridge-based CRISPR Therapeutics that might heal damaged blood cells in sickle cell illness; and a stem cell-derived remedy that might turn out to be a long-awaited remedy for sort 1 diabetes.

“The corporate is at a brand new inflection level at this time,” Vertex chief govt Dr. Reshma Kewalramani mentioned in an interview. “What we need to do is replicate what we’ve completed in cystic fibrosis and remodel, if not remedy, a number of further illnesses.”

Though many of those packages had been underway earlier than Kewalramani grew to become CEO in April 2020, she saved pushing them ahead throughout the pandemic.

The agency has doubled down on cutting-edge medicines with the opening of a brand new lab and manufacturing facility within the Seaport devoted to cell and gene therapies. About 3,100 of the corporate’s 4,300 workers are primarily based in Boston, and extra jobs are on the way in which with a deliberate enlargement within the Seaport.

Fueling this progress are the agency’s extremely efficient, and extremely worthwhile, capsules for cystic fibrosis, which made $7.57 billion in gross sales final yr. The overwhelming majority of that got here from a single drug, Trikafta, which was permitted in 2019 and prices $311,500 per affected person a yr. Whole revenues might rise to $8.8 billion this yr, and better nonetheless in years to return as Trikafta turns into obtainable in additional international locations and for youthful ages.

Though Vertex has been a giant title in Boston’s biotech neighborhood for many years, the agency’s present degree of success was by no means assured.

“I at all times considered them as Genzyme’s and Biogen’s little brother,” mentioned Kenneth Kaitin, a professor of drugs and drug trade professional at Tufts College College of Drugs. Whereas Genzyme pioneered therapies for uncommon illnesses and Biogen for a number of sclerosis, “there was poor Vertex trying to play with the large boys, however they’d no marketed merchandise,” he added.

Within the twenty years after it was based by Joshua Boger in 1989, Vertex burned via billions of {dollars} attempting to make medicines for most cancers, viral infections, and different illnesses. The corporate’s massive break got here in 2011 with the approval of Incivek, a hepatitis C therapy. Gross sales shortly topped $1 billion in 2012 earlier than evaporating over the following two years when a competitor launched a more practical drug.

“We received out-innovated,” mentioned Stuart A. Arbuckle, the chief business and operations officer. “That was a painful lesson to be taught.”

Vertex used its income from Incivek to keep away from the same failure in cystic fibrosis. The corporate’s first drug for the illness, Kalydeco, was permitted in 2012 to assist stabilize the precise proteins, referred to as CFTR, which might be essential for clearing mucus from the airways however are damaged or lacking in folks with cystic fibrosis.

That first tablet solely labored for about 4 p.c of sufferers. Over the following eight years, beneath CEO Jeffrey Leiden, the corporate rolled out three extra medication, culminating with Trikafta, which stabilizes CFTR proteins in additional than 90 p.c of sufferers with cystic fibrosis.

Dr. John P. Clancy, vice chairman of medical analysis for the Cystic Fibrosis Basis, mentioned Vertex’s medicines cut back the period of time sufferers spend on every day care, similar to clearing mucus that accumulates to harmful ranges of their airways. “It’s essentially altering how their life is lived.”

Vertex has one more medication for the illness in superior medical research that might wrap up by early 2023. Kewalramani thinks the brand new tablet might enhance the well being of sufferers much more dramatically than Trikafta, could possibly be taken as soon as a day as a substitute of twice a day, and will probably enhance Vertex’s income even additional.

The corporate’s dedication to bettering its cystic fibrosis medication has made it arduous for potential opponents, together with AbbVie, whose experimental capsules have underperformed in comparison with Trikafta. If Vertex’s new drug proves higher nonetheless, the corporate will strengthen its efficient monopoly on therapies for the illness.

The agency’s success hasn’t come with out criticism. Vertex has confronted some resistance from European well being care methods over its costly drug costs. And the Institute for Scientific and Financial Evaluate, or ICER, a drug-pricing watchdog, concluded that Trikafta would should be discounted no less than 73 p.c — or price not more than $85,500 a yr — to be thought-about cost-effective.

“No one can remorse the innovation that has led to the present lineup of cystic fibrosis medication,” mentioned ICER president Dr. Steve Pearson. “However even when you will have a drug that’s actually significantly better than what sufferers had earlier than, it’s attainable for the drug to be overpriced.”

A latest survey of Fortune 500 firms underscores simply how worthwhile Vertex’s medication are. The agency reaped about $798,000 per worker in 2020, making it essentially the most worthwhile firm by that measure within the drug trade and the sixth most worthwhile general — beating out tech and finance giants Alphabet, Apple, Meta, Microsoft, and Visa.

An unusually small salesforce, which numbers simply 16 folks within the US, helps preserve Vertex’s prices down — partly as a result of they’re the one recreation on the town for cystic fibrosis. An estimated 83,000 folks have the illness within the firm’s main markets of Australia, Canada, Europe, and the US.

Kewalramani mentioned Vertex is engaged on a one-time gene remedy for the illness. However technical challenges which have stumped scientists for many years might not be resolved any time quickly. In the meantime, Vertex is partnering with Moderna on an inhalable mRNA remedy that will assist sufferers who’re missing CFTR altogether make the essential protein of their lungs. A medical trial of that strategy might start subsequent yr.

Vertex can be within the early phases of growing a number of totally different stem-cell-derived therapies for sort 1 diabetes that it acquired by buying two startups, Semma Therapeutics and ViaCyte.

These stem cell therapies, in addition to the corporate’s CRISPR gene-editing work on genetic blood illnesses and muscular dystrophies, mark a radically new path for Vertex, which has lengthy centered on growing pill-based medication designed by chemists. However chief scientific officer Dr. David Altshuler mentioned these new packages match squarely in Vertex’s wheelhouse of engaged on illnesses the place the foundation trigger is nicely understood and there’s a transparent technique for learn how to deal with it.

Biotech analysts say it’s arduous to level to any single experimental remedy as the primary driver of the corporate’s inventory efficiency.

“The overwhelming majority of large-cap biotech firms find yourself getting constructed on one or two actually massive drug franchises after which have problem in reinventing themselves as soon as competitors emerges,” Matteis, the Stifel analyst, mentioned.

However Vertex is attempting arduous to buck that development. Final yr, the corporate spent greater than 40 p.c of its income on analysis and improvement of recent medication — excess of most pharma firms.

And for the reason that firm is sitting on about $9.3 billion in money, buyers are questioning if Vertex will purchase one other agency. Kewalramani acknowledged that “there are good values available,” however that any acquisitions would wish to align with the agency’s analysis technique.

“The one factor I can let you know is Vertex goes to develop,” Kewalramani mentioned. “And headquarters for us is true right here in Boston.”

Ryan Cross could be reached at ryan.cross@globe.com. Comply with him on Twitter @RLCscienceboss.