Vertex shares ($VRTX) took a nasty tumble this morning, freefalling 18% on the news that the company was forced to revise the data on its closely watched cystic fibrosis combo therapy after learning that the initial interim data report had been bungled.
Instead of an impressive 46% experiencing an improvement in lung function of 5% or more in the 37 patients treated with a VX-809 and Kalydeco combo, the true number was 35%. And instead of 30% hitting an improvement of 10% or better, the true figure was 19%. The results were also relative rather than absolute improvements. Vertex said the incorrect data was the result of a "misinterpretation" of the data it received from an outside data analysis firm.
Investors and analysts hate these kinds of ugly surprises. Worse data could shrink markets and potential sales. And Vertex shares, which had been suffering from comparisons with a host of rivals anxious to steal chunks of the growing hepatitis C market, had spiked 86% on the sterling data initially released, creating an expectation that Vertex could introduce a new therapy for cystic fibrosis that would address a much broader group of patients than its pioneering drug Kalydeco.
Despite the change, Vertex insists that it's still on track to Phase III. And it released new numbers showing that patients achieved a mean average improvement of 8.5%, once you factored in the sharp decline in the condition of the patients taking a placebo. Analysts immediately noted that the decline among the patients was much deeper than expected, raising a question whether investigators would see that kind of mean improvement in a late-stage study.
Vertex insists that it is in good shape.
"The improvements in lung function seen to date in this study exceeded our expectations. We're continuing to move forward as quickly as possible toward a pivotal study of VX-809 and Kalydeco in people with two copies of the F508del mutation," said Chris Wright, Vertex's senior vice president of global medicines development and medical affairs.
While the numbers don't measure up to the initial release, Vertex's experimental combo still looks like a solid prospect for cystic fibrosis patients. Aside from offering a cautionary tale to anyone responsible for data analysis--and a damaged market cap--not that much has changed for the biotech company.
"This is a downward revision, but is still good data, in our opinion," noted ISI analyst Mark Schoenebaum.
Special Report: The biggest R&D spenders in biotech