Reshma Kewalramani from Vertex website

Vertex Pharmaceuticals’ chief executive officer Reshma Kewalramani pictured above. Photo courtesy of Vertex.

On Monday, at the virtual JP Morgan Healthcare Conference, Vertex Pharmaceuticals’ chief executive officer Reshma Kewalramani said the company is looking to buy “mid- and late-stage assets.”

The Boston-based company is coming off a busy December 2020. On December 28, Vertex announced that Health Canada had accepted its New Drug Submission (NDA) for Trikafta for Priority Review for cystic fibrosis (CF) in patients aged 12 years and older. With that review, the timeline is decreased from about 300 days to 180 days. The target action date is in the first half of 2021.

Earlier in the month, on December 21, the U.S. Food and Drug Administration (FDA) approved Trikafta for people with CF ages 12 years and older with certain mutations in the CF transmembrane conductance regulator (CFTR) gene that are responsive to Trikafta based on in vitro data. Symdeko and Kalydeco also were approved to include additional responsive mutations in CF patients six years and older and four months and older, respectively.

“The approval for expanded use of three of our CF medicines based on our well-established in vitro model is a testament to the relentless commitment of our scientists to reach our goal of developing treatments for all people with CF,” Kewalramani said at the time.

On December 22, 2020, Vertex inked a strategic research collaboration and license deal with Waltham, Massachusetts-based Skyhawk Therapeutics. They will focus on discovering and developing novel small molecules that modulate RNA splicing. Under the deal, Vertex paid Skyhawk $30 million upfront, and received options to exclusively license worldwide intellectual property rights to candidates from the collaboration. Once Vertex exercises its options, it will handle development and commercialization. Skyhawk is eligible for up to $2.2 billion in potential milestone payments in addition to potential royalties on future sales.

Bill Haney, chief executive officer of Skyhawk, said at the time, “In collaboration with the Vertex team, we look forward to using our SkySTAR platform to discover and develop novel small molecule therapeutics that modulate RNA splicing which have the potential to transform the lives of patients with serious diseases.”

What makes the M&A strategy newsworthy is that Vertex has typically shied away from large mergers and acquisitions. But Kewalramani’s comments suggest that with companies with drugs in Phase II and Phase III clinical development having rising valuations, Vertex might be willing to make some big investments. She said that with cash coming in from its growing CF pipeline, the company now has the “financial firepower” to jump in to more and larger deals.

That does not, however, mean she lacks confidence in the company’s current pipeline. But realistically, she acknowledged that not every program would succeed. She would know first-hand. In mid-October 2020, the company shelved its VX-814 program for Alpha-1 antitrypsin deficiency (AATD). AATD is a genetic disease resulting in a missing liver protein. Children with AATD either do not produce enough of the alpha-1 protein or the protein they do produce is abnormal. The accumulation of the abnormal protein causes damage to the liver.

The Phase II trial of the drug resulted in patients demonstrating elevated liver enzymes, AST/ALT, and in four patients across different doses, the elevated liver enzymes were eight times greater than the upper limit of normal. They all either resolved or were resolving at the time of the statement, but Vertex decided it would not be feasible to safely reach exposure levels.

Vertex has an interesting pipeline. It is working on a CRISPR-based, possibly curative treatment for sickle cell disease and beta-thalassemia in partnership with CRISPR Therapeutics. Data on two clinical trials were presented in December and Kewalramani also offered a brief update at the JP Morgan conference, saying “over 20 patients” had been dosed in the studies with enrollment likely to be completed this year.

The company has also submitted an Investigational New Drug (IND) application to the FDA for the first human trial of a cell therapy for Type 1 diabetes that employs a cell therapy designed to produce insulin-manufacturing pancreatic islet cells. The FDA hasn’t made a decision yet, but Kewalramani said they expect it to get the greenlight this year. The company’s diabetes focus is built on a $1 billion acquisition of Semma Therapeutics in 2019.

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