Abbvie’s experience makes it a useful partner
Despite Vertex’s long standing presence in CF, relationships with specialists and experience in conducting trials, Galapagos/Abbvie have established enough of a presence to create some anticipation of their triple combination among pulmonologists. At this stage there are enough patients with unmet medical need to
recruit for trials and the logistics of running such trials are not onerous. Given the unmet medical need, combined with very high pricing, Vertex has not garnered
much brand loyalty from specialists to whom we have spoken, meaning that establishment of a franchise should largely be down to the quality of the product.
Abbvie has demonstrated its ability to build a brand (Humira) in a very competitive area (autoimmune), arguably with limited differentiation, by high quality marketing
and successful negotiation with payors. If two undifferentiated triple combinations
reach the market, this experience and competence will be valuable.
Notably, Abbvie brings experience of running US clinical trials, which will be required for US approval.
High pricing of Vertex products could lead to opportunity for GLPG
CF one of the highest priced therapy areas, with Kalydeco’s US list price of $300,000 per patient per year and Orkambi $259,000; prices in UK are significantly
lower at £168,000 and £104,000 respectively. Despite a likely discount to payors of >25%, the healthcare systems can only bear these costs because of the limited
number of patients with the disease that are eligible for therapy. We suspect that given the likely increased number of patients that would be eligible for a triple
combination, pricing will likely be lower than Kalydeco. High pricing, along with limited efficacy in the case of Orkambi, has led to a situation where prescribers
would readily switch if a cheaper or more effective therapy became available. We have seen analogous situations before eg Roche/Novartis Lucentis in wet AMD,
where a company has charged a high price for a therapy area where it has a monopoly, leading to a successful challenge from a new entrant eg Eylea.