Vertex Pharmaceuticals aims to cure patients with previously incurable diseases. The biotechnology company uses an integrated, multidisciplinary approach -- employing biophysics, computer-based modeling, and functional genomics -- to speed up the discovery and development of new drugs. Its first commercial product, Incivek (telaprevir) for hepatitis C virus (HCV), was launched in 2011, and a second drug for cystic fibrosis, Kalydeco, was launched in 2012. The company has other drugs in development, including additional treatments for HCV and cystic fibrosis, as well as epilepsy and rheumatoid arthritis.
The company gained FDA approval for its leading hepatitis C candidate telaprevir in mid-2011; the drug was launched as Incivek and represented the first approved drug in a new class of antivirals. The drug is in clinical trials worldwide, and was approved for sale in Canada, Japan, Switzerland, the European Union, and other countries later that year. Incivek is marketed as Incivo in Europe; in 2013 Vertex sold royalty rights to the Incivo line in Europe and other regions to Janssen Pharmaceutica (a division of Johnson & Johnson), which had already been marketing the drug in the region through a licensing agreement.
Not long after Incivek was launched, the company achieved another success with the FDA approval of cystic fibrosis candidate Kalydeco. It is working to expand that drug into additional global markets as well. The Cystic Fibrosis Foundation helped to fund the discovery of Kalydeco (as well as another compound still in development stages), and as a result Vertex pays royalties to the foundation on sales of Kalydeco.
Like most discovery and development companies, Vertex depends upon third-party manufacturers to produce the drugs used in its clinical trials. Upon launch of Incivek and Kalydeco, the company maintained the same operating pattern of using third parties to manufacture its products.
Sales and Marketing
Vertex has partnered with Janssen Pharmaceutica and Mitsubishi Tanabe Pharma to market Incivek in international markets, but has kept North American commercial rights for itself. In anticipation of the drug's FDA approval, in 2010 Vertex set up the sales and marketing infrastructure to support a commercial launch.
Vertex is marketing Kalydeco in the US on its own, and is working to gain approval for the drug in additional countries as well.
Historically, as a development-stage company, Vertex has relied on funding from collaboration and licensing partners to support its research and development efforts, and it continues to seek new partners and acquisition targets to gain new market opportunities. However, achieving commercialization for Incivek in 2011 allowed the firm to grow its revenues exponentially that year (from $143 million to $1.4 billion) and pull its net income level into the black (to some $30 million) for the first time since its founding. As a new therapy in the high-demand HCV marketplace, Incivek achieved some $950 million in sales revenues for the company in the second half of the year alone; in addition Vertex received milestone and royalty payments from both Janssen and Mitsubishi Tanabe upon the commercialization of Incivek in international markets.
In 2013 the company announced a restructuring program to refocus its operations around the cystic fibrosis marketing and sales operations. As part of the reorganization, Vertex reduced its workforce by about 17%. The move reflects increased competition in the hepatitis C market.
To further reflect its focus on cystic fibrosis, the company sold rights to its hepatitis drug Incivo (known as Incivek in the US) and other regions to Janssen Pharmaceutica for some $152 million. Vertex retains rights to the drug in the US market.
The company continues with work to expand its line of commercial products through internal R&D programs. In addition to its additional HCV and cystic fibrosis candidates, other compounds in clinical development are being investigated for the treatment of epilepsy and inflammatory diseases, specifically rheumatoid arthritis, as well as epilepsy and influenza A.
Vertex, which was formed in 1989, has research facilities in California, Iowa, and Massachusetts, as well as in Canada and the UK.