Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Not-So-Solid Data Might Be Good Enough for Vertex

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

When a biotech says that its clinical trial failed its primary endpoint, but appears to be working in a subset of patients, you should stop reading the press release and run away. That is unless the drug treats a disease with relatively few treatment options, and looking at the subset makes biological sense. In that event, you should read further. (But lace up those shoes, just in case.)

The latter applies to Vertex Pharmaceuticals (NASDAQ: VRTX  ) , which announced yesterday the results of its trial testing its cystic fibrosis drug Kalydeco. In patients with a mutation called R117H, the 117th amino acid is changed from an arginine to a histidine, in case you were wondering.

Technically, the trial failed. There was a 2.1 percentage point difference in percent predicted FEV1 -- the amount of air that can be exhaled in one second -- between patients taking Kalydeco, and those taking placebo. The difference wasn't statistically significant.

But when Vertex looked at just the adults in the trial, which it was planning on doing before the trial started, the difference was a solid 5.0 percentage points, which was statistically significant. It turns out, the young kids in the analysis of the full trial data are skewing the data. For kids 6 to 11, those taking placebo actually improved, while those on drug declined slightly.

Will the Food and Drug Administration buy it?
Vertex plans to share the data with the FDA to see if the agency thinks the subset data is compelling enough to put on the label, which would allow Vertex to market the drug for R117H patients.

If this was your run-of-the-mill disease with multiple treatment options, there's no doubt the FDA would tell the company to run another trial; by statistical norms, all secondary endpoints are meaningless if a trial failed its primary endpoint.

Of course it makes sense that adults in decline would be more likely to respond to a drug than kids who are still close to normal; clearly, there's some variation in the FEV1 readouts in young children if the placebo group improved.

Besides Kalydeco, there aren't any drugs available for treating the underlying disease in cystic fibrosis patients. Current treatments, such as Gilead Sciences' (NASDAQ: GILD  ) Cayston and Novartis' (NYSE: NVS  ) Tobi, are antibiotics that help fight infections caused by mucus buildup in the lungs. Kalydeco attempts to fix the problem that causes the mucus buildup in the first place.

Does an expanded approval really matter?
Worst case scenario, the FDA asks Vertex to run a clinical trial in adults only with R117H patients, putting a potential approval in that indication years away.

But in the meantime, the data is still out there for doctors to see. Vertex can't market Kalydeco for that indication, but the biotech can present the data at scientific meeting, and publish it in a peer-reviewed journal. If doctors are convinced the drug can help their patients, they can prescribe it off label, because Kalydeco is already on the market to treat another mutation.

Insurers could push back and refuse to pay for the drug in R117H patients, but if it improves lung function and helps patients use less of Gilead Sciences' and Novartis' antibiotics, the financial impact might not be enough to justify the backlash that comes with refusing to pay for a doctor-recommended treatment.

Our top pick in 2014
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2773289, ~/Articles/ArticleHandler.aspx, 9/25/2016 3:23:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
VRTX $90.63 Down -1.49 -1.62%
Vertex Pharmaceuti… CAPS Rating: ****
GILD $81.37 Down -0.15 -0.18%
Gilead Sciences CAPS Rating: *****
NVS $81.48 Down -0.55 -0.67%
Novartis CAPS Rating: ****