Vertex's Casgevy launch advances amid CF business growth

Vertex Pharmaceuticals has been making significant strides with its cystic fibrosis (CF) treatments while simultaneously diversifying its revenue streams. The company has been particularly successful with its CFTR modulators, which have sustained its stronghold in the cystic fibrosis market. However, Vertex is now aiming to build on this foundation with its CRISPR-partnered gene-editing cell therapy, Casgevy.

Casgevy received regulatory approval for treating sickle cell disease (SCD) in December, followed by approval for beta thalassemia the next month. Vertex is making notable progress in activating authorized treatment centers (ATCs), engaging with physicians and patients, and engaging in discussions with payers, according to Stuart Arbuckle, the company's Chief Operating Officer.

Cell collection is another critical aspect of Casgevy’s launch, which was highlighted during Vertex's first-quarter earnings call. As of mid-April, cells had been collected from five patients in regions where Casgevy is approved, namely the United States, Europe, and the Middle East. Arbuckle considered this milestone a significant achievement, given the complexity and length of the patient journey on Casgevy.

Analysts from Mizuho Securities and William Blair have also weighed in on Casgevy's progress. Mizuho's Salim Syed described the initial cell collection numbers as decent and anticipated that they would increase more substantially in the coming months. William Blair’s Miles Minter noted that Vertex might start recognizing revenues from Casgevy as early as the second quarter of 2024, potentially leading to a more considerable influx of revenue in the latter half of the year. William Blair projects Casgevy to generate around $84.4 million for the year.

In terms of ATC activation, Vertex had nine centers operational at the time of Casgevy's launch and has since increased that number to 25 across the U.S., Europe, and the Middle East. This figure includes 18 centers in the U.S. alone. By contrast, Bluebird bio, a competitor in the SCD gene therapy space, has around 60 treatment centers in the U.S. but has so far only collected cells from one patient for its SCD therapy.

One area where Vertex sees significant potential is in Bahrain and Saudi Arabia. Analysts from William Blair argue that Casgevy's sales opportunities in these regions are currently underestimated. Arbuckle echoed this sentiment, noting that the eligible patient populations for SCD and beta thalassemia in these countries number around 23,000, which could present a larger opportunity than the U.S. market.

Despite the focus on Casgevy, Vertex's CFTR modulators continue to perform well. In the first quarter of 2024, the company’s product revenues surged by 13% to $2.69 billion. This growth was driven by the triple-combination therapy Trikafta in the U.S. and its international counterpart, Kaftrio. Vertex has successfully extended the use of its CFTR drugs to younger patient groups both domestically and globally.

Looking ahead, Vertex remains optimistic about its revenue prospects. With Casgevy gaining traction and Trikafta maintaining its market position, the company has reiterated its full-year revenue forecast. For 2024, Vertex expects to generate between $10.55 billion and $10.75 billion in sales.

In conclusion, Vertex Pharmaceuticals is successfully leveraging its expertise in CF treatments while making substantial headway with its new gene-editing therapy, Casgevy. The company’s dual focus on maintaining its core business and exploring new therapeutic avenues appears to be paying off, setting the stage for continued growth and diversification.