Vertex stock plummets

Down almost 17% just today alone. Wow, all these competing drugs and "disappointing" Prove results (from the bonehead trader perspective) are *really* taking the air out of VRTX. Hmmm, might be a pretty tasty buying opportunity. Anyone thinking about taking the plunge? ;-) Man, talk about volatile, gotta have some nerves of steel on this one.

http://finance.yahoo.com/q?s=VRTX

[FlGuy]

I've made a 'rash' of bad investments. What's another one.  Unfortunately, the company I work for has taken hits in the past several sessions.  At least there are some viable options with hcv even if there are none, financially speaking, where I work.  

[jmjm530]

Anyone thinking about taking the plunge?
------------------------------------------------------

The best hope for VRTX stock is if I don't buy. Certain death to the stock if I take a long position. That's how it always seems to go. LOL.

But seriously, biotech is a rocky ride and not for the faint of heart (or wallet). My guess is that the stock will be fine long-term but you have to have the stomach to stay in. I don't, so I've stayed out. At least so far.  

-- Jim

[jmjm530]

Wow. That's like a two-year low. Maybe. Maybe. Maybe. NAH :)

[pigeonca]

For whatever it's worth, I've read that Vertex Pharmaceuticals has a heavier than recommended load of debt, so that even if Vertex is a blockbuster, the company won't make that much money on it.  Still, buying some stock at twenty-four bucks a share is awfully tempting.  But then again, I'm like Jim: If I buy it, it will go down.

[geterdone]

For what it’s worth, I had said that Vertex would be a steal at $26 and at this point it is a bargain basement price and if it should dip below $24 I will be a buyer of its stock. I see vertex as a double if not a triple return going forward. This dip is just a reaction to all the data coming from the conference and even at that all the news is good Vertex is still the front runner for FDA approval and its sx can only get better with more research as with every other player that is in the same boat with their new drugs. It does seem so that the INF and Riba are the main medium in all the trails with the Ribavirin as the main component. The only catch I see is if a larger company would buy Vertex out which in it self is a win-win situation.

I also like the new underscoring of the medical terminology that Med Help has implemented and will help a lot of people when visiting this site.

Jasper

[geterdone]

Of course the above post is just my own take of the risk/ reward in the direction of Vertex for which I’d like to thank a certain individual for highlighting it progression.

jasper

[Proactive]

"The only catch I see is if a larger company would buy Vertex out which in it self is a win-win situation"
There are plenty of catches my friend, finanancing for continued operations, FDA approval/ phase 3 trial protocol, competition from others..And the biggy supply/demand for the stock,keep in mind the fiscal year end is approaching rapidly for the institutions (mutual funds end of Nov.?). Do you want to jeopardize your annual bonus, show in your annual statement to shareholders that you held the stock over the last year? (there goes your new climately control wine cellar)..

One thing my Daddy always said, if you want to get emotional by a puppy---not a stock.....;^)

[Proactive]

And I completely forgot to mention...While win-win for shareholders is up to debate, imo....it is a win-win for Hep C patients..If the drug merits approval....it will be brought to market, regardless of how it gets there......

[mremeet]

Yep, looks like alinia is starting to sink in as a possible threat. Especially since it's already available, FDA approved and relatively cheap...plus virtually no side effects and low toxicity? If it pans out on geno 1's as it appears to be doing for geno 4's, I'd say that's the ultimate threat to stock values like VRTX. And the thing is, is that if you buy in now, eventually the Alinia data will be produced for geno 1/2/3 and if it's good, I can't see that making the vrtx stock price going up one single bit. It's like a financial landmine hidden out in a field somewhere that you have to traverse. Oh well, nothing ventured nothing gained. In the meantime if you've got the avocados, time to ante up! ;-)

[jmjm530]

I think the stock will rebound once calm, cool and collected analysis realizes that Telaprevir still offers a better SVR rate in half the time -- and that figure could improve when they start allowing more agressive helper drugs. Not to mention that they're at least a year ahead of the competition, and I don't see Alinia as direct competition although certainly a player. What may be happening now is that many (the dumb money) are running scared based on hasty analsyis, and the smart money is just waiting to jump in. I know, because I'm always the dumb money that freaks and sells at the wrong time. LOL

[Andiamo1]

I came to the same conclusion as you and bought the stock.  Since I seem to have the same luck as you, I advise all to sell short - LOL.

The stock is up a litle today and I think more analysts will up their recommendation after the meeting is over.  This is just a knee jerk trader reaction IMHO.

[Liv]

Haven't seen you on this site for a while.  What's your take on the Vertex news?   You seem to be pretty savvy on this subject as well.   I'm with jmjm530 though, if I invested the stock would tank as soon as my broker said thanks for the purchase.

[Liv]

Sorry, your name got cut off.

[Liv]

Sorry all, it happened again.

[GoofyDad]

Hey Jasper - I'm interested in what type of earnings per share you forecast to acheive the 3x valuation projection? And how long of a run could we expect before competing products or diminishing demand starts to erode earnings?  I confess to not even knowing total shares outstanding - but if they've been cash strapped in the past it would seem likely that shares could be pretty diluted at this point.

Anyway, if you have a moment to summarize what you put into your projections I for one would be interested....

[Andiamo1]

Vertex has a market cap of > 3 billion making it expensive still.  On the plus side, the market for PIs is estimeated to be about 4 billion now and growing to 11 billion.  The only way to take a stab at earnings is to make a guess on the percentage Vertex will get.  It will be very high initially, since there will be no competition for a year at least, and then only one or two others for another year.

The market fundementals are so shaky now, you also have to factor in a major correction.  With gold > 800 and oil heading for 100 - perhpas today - the market will likely take a major hit in the near future.

The bottom line - who knows - LOL.

[mremeet]

At $24 a share, knowing it probably will be the first PI to make it to an otherwise PI desolate market, and it will probably have that exclusive position for at least a year or two, then I'd say the odds of making some serious dough on this one are better than your odds at the blackjack table in Vegas (which actually aren't too bad). That is, IF you ride out the wild undulations until FDA approval (which may take it well below $24/share). We know that Telaprevir works and it works for the vast majority who take it with IFN+riba, even in the poor bastards that get a nasty rash (like yours truly). We know that it doesn't seem to have any serious long term effects at this point. We know there are a  boatload of people who want and NEED this drug - and right NOW. I think it will be FDA approved and I think there will be a lot of people waiting in line to get it too. And even when the other drugs come online, including Alinia should it pan out, each individual drug will have its own niche. None of them are one stop cure-alls, there's plenty of room for all of them to get in on the action. A whole new world of custom tailored treatment will open up. Those with bad VX rashes will go with Boceprevir. Those with severe Boceprevir induced diarreah (diarrhea) will go with Telaprevir. Those with intolerances to both PI's might use Alinia. Tough to treaters may use various cocktails of all these drugs...etc etc. And in the meantime Vertex is putting it's data and front-runner experience to use by developing a refined version of VX950. It's several years away, but I'd guess its deployment will not be that far behind many competing PI's. All in all my guess is that VRTX at $24/share at this point is a good gamble. Still a gamble, but as usual nothing ventured nothing gained.

[Andiamo1]

I agree completely with your assessment of the stock.  I do think you can't make a buying decision without taking into consideration the entire market fundamentals.

The fundamentals are deteriorating at a rate I have not seen in my lifetime before now.  

[mikesimon]

From Forbes
".......Vertex could win the race to the market, yet still lose out in the long run as competitors introduce slightly better drugs a couple of years later. This happens all the time in the drug industry. Merck pioneered cholesterol-lowering drugs, only to see Pfizer's  (nyse: PFE -  news  -  people ) Lipitor come along a few years later and steal much of the market.

Vertex' telaprevir suffers somewhat from being a front-runner. The drug has completed more clinical trials than its possible competitors, so more of its warts are known. "It is difficult to judge other compounds at an earlier stage where we don't have the data," notes Vertex spokesman Michael Partridge, who says the company is confident in its position. "Early-stage trials are one thing; getting through [trials on] 500 or 600 patients gives you some confidence."

Here are some issues that have investors nervous about the Vertex pill:

--Efficacy. Used in a 24-week treatment regimen, telaprevir helped drive away the virus in 61% and 65% of patients, respectively, in two midstage trials when combined with standard treatment. This appears to be clearly better than standard treatment alone, which works 40% to 50% of the time for the most common viral strain. But telaprevir's results numbers were at the low end of expectations, says Cowen & Co. analyst Rachel McMinn.

--Side effects. In one trial reported at the ongoing Boston meeting, 18% of patients on telaprevir dropped out of the study early, versus just 3% of patients on existing therapy. Most of the patients who quit the trial complained of troublesome side effects such as rashes. Vertex says it is working on ways to reduce the dropout rate in future trials. Schering-Plough says its drug does not have the rash problem, although patients report it does leave a metallic taste in the mouth. (However, Schering-Plough reported a dropout rate due to side effects of 9% to 12% with its drug, not much different from the Vertex pill.)

--Dosing. The Vertex drug must be taken three times a day, leaving room for competitors to come in with more convenient products eventually."

From The Motley Fool
".....As I mentioned last week, there will be competitors to telaprevir on the market after it gets approved. The data that Vertex presented during the AASLD conference only confirms what Rule Breakers analyst Charly Travers thought about the drug when he first recommended Vertex for the newsletter back in February 2005 (shares are still up more than 100% since then).

Shares of Vertex will gyrate up and down whenever competitors release new data, such as occurred with Schering-Plough's (NYSE: SGP) boceprevir a few weeks ago. As analysts waffle over the odds of these other drugs getting approved, there will be volatility in shares of Vertex, but it doesn't reduce the very strong likelihood that Vertex's telaprevir will be the first new anti-HCV treatment on the market in years."

Mike


  
  
  

[Willy50]

http://www.thestreet.com/_yahoo/newsanalysis/biotech/10388846.html
(please visit the link for the complete story- Willy)

Vertex Shares Face Long Road Back

By Adam Feuerstein
Senior Writer
11/7/2007 1:03 PM EST
(this was on page 4-Willy)
(Ian) Smith, always eager to defend Vertex, acknowledges the competition, but emphasizes that Vertex also has a follow-on hepatitis C drug, dubbed VX-500, which should start human clinical trials before the end of the year.

Vertex hasn't released any details about VX-500 and what advantages it may have over telaprevir, but it's a safe bet to assume that Vertex is engineering the drug to have an easier dosing schedule and/or fewer side effects.

[Proactive]

"I do think you can't make a buying decision without taking into consideration the entire market fundamentals" I completely agree, a good percentage of an individual stocks movement is directly releated to general market movement and sentiment,it has to weigh in the decision making process to buy any stock...
Looks like institutional interest is slowing today in VRTX, little over 2m shares traded @ 2:30pm..
boy has Fidelity taken a thumping on this one the last few months...youser, they are/were holding 31 million shares..

[mremeet]

I agree with your market fundamentals assessment. But if I were ballsy enough to snap up some VRTX at $24/share I would not expect a profit out of it until at least FDA approval, which in all likelihood is at least 1.5 years away. By that time hopefully the credit debacle will have resolved itself in a reasonably healthy manner (which I think it will). As far as oil and housing, oil will keep going up, but in a measured way (barring war in the middle east or another big terrorist attack - wild cards in play here, no doubt). People will just start having to sell their SUV's and join the rest of the world with expensive gas - tough. Oil/gasoline is still relatively cheap in the US when compared to historical values and inflation is factored in, and it's still a damned site cheaper here than almost anywhere else in the developed world (which ties to our productivity/GNP). Residential housing will likely continue to slip for another year and then stagnate for several years afterward (which I view as a good thing after this ridiculous runup in recent years). Commercial real estate is doing ok as far as I know. But overall I don't see another major black friday-ish market crash coming our way anytime soon. And although I certainly can't predict the future and I'm neither bear nor bull, but even if there were a significant correction (i.e. more than a 1000 point downturn in the dow) medicine is pretty recession proof (as long as it works, that is). If Teleprevir offers new hope to those in need of it (which it obviously does), and it becomes available before any of its competitors (which I think it will, alinia aside), then patients in need of it are not going to be avoiding it simply because the dow hits 10,000 (or below) again. They're not going to avoid coming in for treatment simply because they're retirement accounts are pummeled into the dirt. They also won't avoid it because of serious trouble in the middle east, they won't avoid it because of an expansion of war, and they won't avoid it because of gas being $6/gallon. They're going to do the same thing they would do if the birds were chirping, the sun was shining, gas was $2/gallon, they were flush with cash and the market hits 18,000...and that's do whatever it takes to get better, which will include taking (and hence buying) teleprevir.

[Andiamo1]

Yes, Vertex is a good place to be.  If the market takes a dive, Vertex will hold up better than most.  The big problem is that the FED has lost control of the dollar and long bond interest rates.  If the economy continues to soften, as I expect it to, they will be unable to lower rates without causing a crash in the dollar.  It actually started to happen today and is now spilling over into the asian markets.  Tomorrow will be an interesting day.

Until the financials own up to the problems, the market will continue to be volatile.  If the SIVs, CDOs and LBOs are as bad as some people think, this will be a serious recession.  In any case, I own  Vetex stock and I will not sell it any time soon.  I would be cautious about any long positions now.

[geterdone]

Pro, O’ yeah, the end of year window dressing. With tutes owning roughly 92% of vertex and 105m float, I am sure the volatility will be extreme going into the end of the year for the very reasons you have stated. Yeah, learned the puppy syndrome back in 2000 although there was one good hammer in the bag and it paid off quite nicely in seven years and I see Vertex as another that will do the same in three to four years or maybe longer if one has the patients and endurance for the ride.

Goofy, I used the yard stick assumption that andiamo1 referred to in his post and the fact that there are 170m infected worldwide and vertex will have a large chunk of that market going forward. Vertex now has the back up data and the up coming trial may eliminate some of the adverse events with in the prove 1 and 2 trials.  

I had made the call to the broker Tuesday morning for 400 shares but he was out of the office, lucky for me at that time, I never did call back. I don’t think we have seen the true bottom yet, because so much information coming out about all the new drugs for hepc and the economy and geopolitical crisis coming to the fore front.

When posting the other morning I did not reference in the post that Vertex is a long term buy over the next ¾ years and at this level it is priced reasonable but if it continues to drop in the coming weeks it would be an even better long term buy and hold. An article from the Streets.com / Adam Feuerstein pretty much sums it up as with all the other post on this thread.

An article from the Streets.com / Adam Feuerstein

http://www.thestreet.com/_yahoo/newsanalysis/biotech/10388846.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Got to go to work…
jasper

[mremeet]

Yep I agree completely, the unscrupulous lenders who gave all those subprime loans should be made to suffer, they should NOT be bailed out by the fed one single bit. And the wannabe McMansion homeowners and the get rich quick flippers who foolishy took out those loans need to feel the consequences of their behavior too. The taxpayers nor the fed should not bail any of them out, let the free market work and let it punish those that have behaved badly. I also think that people who build homes in fire/flood/mudslide zones without insurance (especially upper and middle class people) should pay for their own folly. If our society starts shielding fools and greedy crooks from the consequences of their actions (at the expense of the ordinary taxpayer), we ALL will suffer greatly from it in the long run.

Oh yeah and I read your profile. I about fell off my chair when you said this: "After age and HCV reduced my cognitive capabilities, I decided that I would be better suited to senior management, so I became an executive vice president :)." LOL! HA HA! That was awesome, you sound like a good boss. They're hard to come by nowadays, as you might have noticed. Good luck with the rest of your treatment, VRTX stock aside sounds like the brass ring is already in hand.

[Andiamo1]

Thanks for the good wishes.

By the way, Goldman Sachs just upgraded Vertex to a buy!

[mikesimon]

From The Fool Board:
Not gonna have time to put together the report I envisioned. Few too many desperate client's to save. Thems the breaks. However, the below pretty much sums it up as I put the SGP vs. VRTX results together to try to come up with some sort of comparison.

· First off, SGP dosed their patients with 4 weeks of SoC prior to initiating 12 weeks of boceprevir. This compares to telaprevir in that telaprevir had no such pre-dosing. Ie., it is almost certain that if telaprevir were predosed with 4 weeks of standard of care followed by telaprevir that the telaprevir results would have been even better. Therefore, there is no way to in any accurate way compare boceprevir to telaprevir. The boceprevir results are exaggerated in comparison to telaprevir by the 4 weeks of pre-dosing SoC
o This comes at a cost for boceprevir in that boceprevir, at a minimum will require one month extra treatment than will telaprevir.
o It comes at another cost as well. RVR (rapid viral reduction) is considered the most important indicator as to whether or not a patient will clear the virus long term or not. Clearly boceprevir's RVR is not something to brag about (and SGP has purposely and knowingly chosen not to publicize this figure – if the week 16 SVR is known, the week 4 RVR is clearly known as well).
§ This has other implications as well. If the RVR is much weaker, then it is probable that the virus rebound % will be materially higher than it is for telaprevir who we know has an incredible RVR number.
· Second, it is clear from the language used in SGP's press release that the results were not present in an Intent to Treat (ITT) manner as Vertex is using. VRTX's scoring system counts any drop out, for any reason, as a failure. This is true even if the person who dropped out, say for personal reasons (say mother is sick in Australia and had to fly home to take care of the family farm) is considered a failure, and this is considered a failure even if that patient, with shortened treatment, was long-term SVR at 44 weeks (ie, a medical cure, but considered a failure under ITT scoring). SGP's results are therefore inflated relative to VRTX's scores by quite a bit.
o The language used in SGP's press release is as follows: Patients receiving these boceprevir regimens achieved a high rate of early virologic response, with 70, 79 and 54 percent of patients, respectively, having undetectable virus (HCV-RNA) at week 12 of boceprevir therapy compared to 34 percent of patients in the control arm (Roche Cobas Taqman 1.0 assay; lower limit of detection is 15 IU/mL).
o It is unambiguous that the results were only of patients who made it through the entire drug regiment of 4 weeks SoC and 12 weeks of boceprevir. There is no other way to interpret this language unless the writer was utterly careless (possible but extremely unlikely in the world of medical press releases of this sort).
o Further, the term "early virologic response" is misleading and actually misused as we know "early virologic response" is for RVR, which is taken at week 4 or earlier, and has a medically understood term. The term is obviously used to attempt to inflate what is here.
· Third, these results are really at week 16 not week 12, which goes back to the first point. You can't even really compare them to telaprevir, because along with the different scoring mechanism (which we can make reasonable adjustments for), it really was not the same medicinal regiment.
· Finally, telaprevir's results are at 20 week follow up, or week 32. There will be viral rebound, and this is without question. Boceprevir's viral rebound, due to what appears extremely likely as an inferior RVR, will almost certainly be higher that it was for telaprevir, which if memory serves was 4% in one arm of a study and 6% in the other arm of the study.
o This also means that Boceprevir's Adverse Events (Aes) will also go up, as there will be drop outs going forward.

This stated, and it is quite direct and material issues which makes one mad that persons paid 6 figures a year, who are supposed "experts"; ie, the analysts, have not even brought these matters forward and let this misperception continue to exist.

[mikesimon]

The numbers:

Using ITT: Boceprevir's 79% first has to be adjusted for dropouts. The drop out rate due to AE's was 9% in the study (in reality it is probably higher as there will be patients who drop out for no real reason at all and those are excluded as AEs, but for this purpose we will just use 9%. Boceprevir's number then, is at best, 71% and most probably lower by 1-2%.
· There will also be further A.E.s going forward, to be conservative we will use 2% additional AEs.
· There will also be viral rebound, and viral rebound at probably a higher percentage then experienced with telaprevir due to the differences in RVR (which by the way, would be consistent with phase I results in which telaprevir had vastly superior results 4 log reduction vs. 2 log reduction (and it should be noted nothing else has had more than a 2 log reduction in any clinical trial to date except for telaprevir which shattered the 2 log reduction). To give SGP the benefit of the doubt we will use 6% as the viral rebound rate, but I would not be surprised at all to see 8-12%.
· Using these numbers, to "norm" SGP's numbers to telaprevir, using an ITT methodology and extrapolating out to week 32 (it would be week 36 for SGP as the equivalent) boceprevir scores 62% this vs. 70% for telaprevir. (as so far reported). And again, if VRTX were to add 4 weeks of SoC its results likely would increase. Were SGP to remove the initial 4 weeks of SoC its results likely would dramatically decline.
· It should also be noted, that in addition to all of the above, SGP used HCV RNA <15 IU/ml as their standard of meeting SVR whereas VRTX used HCV RNA <10 IU/ml. Some say this difference is not that material, however, looking at VRTX's RVR results, they kept RVR for <30 IU/ml and at <10 IU/ml and the difference respectively was 88% and 79%. A 9% negative difference when using the more stringent standard. So SGP's results almost certainly would need to be adjusted downward even further due to their use of a higher SVR of 15 IU/ml. To be conservative, lets use 2% additional reduction as 15 is a more stringent standard than 30 and will produce a smaller difference so instead of cutting the difference in half I'll use a much smaller conservative adjustment.
o The final adjusted SGP number is therefore 60%, and using equivalent accounting and methodology could be somewhat lower as well in comparison to VRTX's 70% SVR (Sustained Viral Response).
We could also reverse the score and do it SGP's way by adjusting back in the AEs, and ignoring any viral rebound that will certainly occur. This is easier to do than it was to adjust SGP's numbers to VRTX's methodology. Simply add them back. 70% plus 11% AE +6% viral rebound =87% plus you have to add back for miscellaneous dropouts the number of which we do not know. As you can see, the number for telaprevir will approach or possibly exceed 90% at 12 week SVR using SGP's methodology vs. SGP's 79%.

So score 60% boceprevir (at best, and with 4 weeks longer treatment) vs. 70% telaprevir (with 4 weeks shorter treatment, and 4 weeks less of SoC is no minor detail).

Or score 79% boceprevir (again at 4 weeks longer treatment, and this number is probably even a bit lower) vs. ~90% for telaprevir.
Either way you look at it, it appears that the boceprevir press release is quite misleading if its intent was to compare itself vs. telaprevir, which of course it was, as the press and analysts have adopted the language that boceprevir is "comparable". It is disappointing to see just how unsophisticated the analysts have been as it relates to this press release as I have seen nothing of this sort in analysis. Probably paid reports have such analysis, but nothing that has come out into the public domain has.
If anyone sees any screaming errors from this analysis I would be ecstatic to go over them and nail this down.

It looks to me that without question the boceprevir "scare" is without merit, and did I mention that boceprevir, at best, can probably start there phase III in March of 2009, at best? Over a year or more behind at present in development.

[mremeet]

Mike, Not sure who wrote what you referenced from the “fool board” (presumably Motley fool?). But in regards to a few of the comments:

Foolquote: “First off, SGP dosed their patients with 4 weeks of SoC prior to initiating 12 weeks of boceprevir. This compares to telaprevir in that telaprevir had no such pre-dosing…This comes at a cost for boceprevir in that boceprevir, at a minimum will require one month extra treatment than will telaprevir.”

I wouldn’t know exactly why the curious boceprevir 4 week SOC pre-dosing strategy was implemented. But it was discussed a while ago here when the initial boceprevir results were released. I speculated about why boceprevir was dosed 4 weeks after “pre-loading” with SOC, mostly to get riba/IFN serum levels up and to get VL down prior to the PI’s introduction, thereby helping to prevent the production/survival of PI resistant strains (thereby allowing the PI to suddenly “blitzkrieg-ingly” wipe out the remaining virus too quickly for it to react and breed resistance). And that “guy on the internet” theory was based on some brief semi-vague comments made by a Schering researcher during a press release/interview. But I’m still not completely sure what the strategy is and whether or not it has merit. So unless the fools on motley fool know more than we do (which maybe they do?), I think it’s premature to suggest that boceprevir may take another 4 weeks of treatment when compared to telaprevir. Just because the SP trial had a 28 week group, that doesn’t mean that it’ll end up taking precisely that long to get good results with many patients. Also, the 4 week SOC pre-loading strategy may work out very well, especially in certain patients. I don’t know that it will or won’t, but the SP researcher guy made some pretty sly comments to suggest he thought that it did (and he was already sitting on a bunch of data when he intimated that). If he’s right, and if this theory has merit, it could actually *shorten* treatment, not lengthen it. And of course if this strategy works for boceprevir, I can’t see any reason why it wouldn’t work for telaprevir also. I was hoping HR would discuss this dosing strategy and see what he makes of it.

Foolquote: “It comes at another cost as well. RVR (rapid viral reduction) is considered the most important indicator as to whether or not a patient will clear the virus long term or not. Clearly boceprevir's RVR is not something to brag about...This has other implications as well. If the RVR is much weaker, then it is probable that the virus rebound % will be materially higher than it is for telaprevir who we know has an incredible RVR number.”

If they’re referring to the low RVR rate because of the postponed introduction of boceprevir (compared to telaprevir’s concurrent SOC initial dosing in Prove 1/2/3), that’s obviously an unfair apples to oranges comparison. Also, if the aforementioned latent PI introduction theory has real merit, the existing simple dynamic of 4 week UND RVR equating to SVR may no longer hold in the same manner. There may be a new type of post 4wk RVR that will define and predict ultimate treatment success (again if the latent PI introduction strategy has merit).

Foolquote: “Finally, telaprevir's results are at 20 week follow up, or week 32. There will be viral rebound, and this is without question. Boceprevir's viral rebound, due to what appears extremely likely as an inferior RVR, will almost certainly be higher that it was for telaprevir, which if memory serves was 4% in one arm of a study and 6% in the other arm of the study.”

Once again this is premised on comparing apples to oranges. Should the latent PI introduction strategy have merit, simplistically analyzing the reported results based on what is known about standard RVR dynamics may not apply at all.

Mikequote: “It looks to me that without question the boceprevir "scare" is without merit, and did I mention that boceprevir, at best, can probably start there phase III in March of 2009, at best? Over a year or more behind at present in development."

Did you see “The Street’s” Feuerstein quote referenced in another recent thread concerning telaprevir’s FDA approval? Sounds like it could easily be pushed back to 2010-2011 based on what he could get out of Vertex rep Smith.

[mikesimon]

Yes, I read the Street's article. Of course, this stuff is just conjecture but I thought this take was interesting. I personally believe that RVR is RVR is RVR and that it will be shown to bode very well for SVR with any treatment approach. And the pre-dosing does change the equation and makes a head to head comparison impossible. If it works with one PI I would bet that it would  work with another and another - and why wouldn't it?
As to availability I am one of those who has been consistently conservative with estimates because I have been watching this stuff for too long to expect any drug to get to market when projected. Many members here have speculated that it will be late 2008 or early 2009. I have always thought mid to late 2010 was a more realistic date but I hope that it's sooner than that.  
I have resisted the urge to get involved financially because I am already to invested emotionally and I was looking at this stock way back when few people were or at least few people were talking about it - it was $10 and change I believe. My transplant surgeon asked me if I was invested then and I told him what I just said - too emotional for me. Then I saw this thread and decided to buy a little since it seemed negative and I like the contrarian approach on occasion. So I got in yesterday at close to the low. I'm ahead already and thinking about selling. Mike

[Proactive]

as long as you realize it's speculation (G) Speaking of which, I just bought some C @ 32.04...You want to speculate, look at some of the financials (lol)

[geterdone]

Hope this helps...

jasper

http://biz.yahoo.com/e/071109/vrtx10-q.html

[geterdone]

This is where Vertex may see significant savings going forward by internally funding more of their own programs and give them a greater control over the process.
jasper
We have elected to diversify our research and development activities across a relatively broad array of investment opportunities, due in part to the high risks associated with the biotechnology and pharmaceutical business. This diversification strategy requires more significant financial resources than would be required if we pursued a more limited approach. We are expending significant resources on development and commercialization of the drug candidates for which we currently have principal clinical development responsibility, in those markets where we have commercial rights. We rely on collaborators to develop and commercialize certain of our other drug candidates either worldwide or in the markets upon which we are not currently focused.
To date, we have relied on pharmaceutical company collaborators to develop and market our drug candidates that have advanced to late stage clinical trials or commercialization. Telaprevir is the first drug candidate for which we expect to perform all activities related to late stage development, drug supply, registration, and commercialization in a major market. We have limited experience in Phase 3 clinical development, supply chain management, and pharmaceutical sales and marketing, and we are building those capabilities as we advance telaprevir through clinical development. Even though telaprevir is a Phase 2b drug candidate, we are planning for and investing significant resources now in preparation for Phase 3 clinical trials, application for marketing approval, commercial supply and sales and marketing. Our engagement in these resource-intensive activities could make it more difficult for us to maintain our portfolio focus, and puts significant investment at risk if we experience significant delays in our development program for telaprevir, or do not obtain regulatory approval and successfully commercialize telaprevir in North America. Although we attempt to stage our investments in each drug candidate to coincide to some degree with the occurrence of risk-reducing events associated with the development of that drug candidate, we may not be able through this approach to reduce significantly the overall financial risk associated with our drug development activities. There is no assurance that our development of telaprevir will lead successfully to regulatory approval, or that obtaining regulatory approval will lead to commercial success.

“”Telaprevir is the first drug candidate for which we expect to perform all activities related to late stage development, drug supply, registration and commercialization in a major market””.
In the past, we have sought collaborator funding for a significant portion of our research activities, which required that we grant to those collaborators significant rights to develop and commercialize drug candidates generated by that research.
In the future, we expect that we will ourselves fund a greater proportion of our research programs than in past years, using internal funds rather than collaborator funds.
We believe that this strategy will ultimately allow us to retain greater development control of, and commercial rights with respect to, those proprietary drug candidates that may meet our strategic internal investment criteria as in effect from time to time.
Also another link by Forbs..

http://www.forbes.com/free_forbes/2007/1126/082.html?partner=yahoomag

[Proactive]

Fro the 10Q
"Financing Strategy

At September 30, 2007, we had $514.5 million of cash, cash equivalents and marketable securities and no outstanding convertible debt. Because we have incurred losses from our inception and expect to incur losses for the foreseeable future, we are dependent in large part on our continued ability to raise significant funding to finance operations and to meet our long-term contractual commitments and obligations. In the past, we have secured funds principally through capital market transactions, strategic collaborative agreements, proceeds from the disposition of assets, investment income and the issuance of stock under our employee benefit programs. In order to fund our research, development and manufacturing activities, particularly for later stage drug candidates including telaprevir, we expect to continue to pursue a general financing strategy that may lead us to undertake one or more additional capital transactions, which may or may not be similar to transactions in which we have engaged in the past. We cannot be sure that any such financing opportunities will be available on acceptable terms, if at all."

Jasper, "internally funding more of their own programs" internally funding with externally borrowed funds.
In light of the current financial markets, terms for financing of continued operations are becoming much more expensive.

[Andiamo1]

I think they mean that the revenue from Telaprevir will fund other projects.  Telaprevir will be funded as usual.  The warning sentence is standard procedure for any financial disclosure when talking about the future.  In this case, it has more meaning due to the turmoil in the financial markets.

If Telaprevir takes too long to come to market the company will be in serious trouble. It looks, from their financial statement, that they bet the company on Telaprevir.

So far, it looks like a good bet.

[geterdone]

Pro this is from their 10k filing, with only 20m loans outstanding which can be paid in May and the converts… converted, Vertex can go back to the capital markets if need be to secure additional financing. Although their R&D expenses have increased during the prove 1 and 2 trials I am sure this is what they are addressing by internal funding. They now have the wiggle room going into 2008 with out the past baggage, remember window dressing… get all the troubling news out before the end of the year.
I may be wrong but it is the way I’m looking at it.

Cheers!
jasper

At September 30, 2007, we had cash, cash equivalents and marketable securities of $514.5 million, a decrease of $247.3 million from $761.8 million at December 31, 2006. The decrease is primarily the result of expenses relating to our clinical development activities. Capital expenditures for property and equipment during the nine months ended September 30, 2007 were $27.2 million.


At September 30, 2007, *** we had $20.0 million in loans outstanding under the loan facility established under our collaboration with Novartis, which is repayable, without interest, in May 2008***. In the third quarter of 2007, we repaid $42.1 million in aggregate principal amount of 5% Convertible Subordinated Notes due September 2007. During the first quarter of 2007, holders of $59.6 million in aggregate principal amount of our 5.75% Convertible Senior Subordinated Notes due February 2011 converted their 2011 Notes into 3,992,473 shares of our common stock at a price of $14.94 in principal amount per share. As a result of the conversion of the 2011 Notes in the first quarter of 2007 and the repayment of the 2007 Notes in the third quarter of 2007, **** no convertible debt was outstanding as of September 30, 2007****.

Research and development expenses increased $135.1 million, or 51%, to $397.7 million in the nine months ended September 30, 2007, including stock-based compensation expense of $38.6 million, from $262.6 million in the nine months ended September 30, 2006, including stock-based compensation expense of $23.7 million. The increase in research and development expenses was primarily the result of increased development investment to support the global Phase 2b clinical development program for telaprevir, as well as a $51.8 million increase in our investment in building commercial supply for telaprevir for use if telaprevir receives marketing approval, together with a $14.8 million increase in stock-based compensation expense. Development expenses increased by $117.9 million, accounting for 87% of the aggregate increase in research and development expenses. Research expenses increased by $17.3 million, of which $5.7 million was increased stock-based compensation expense.