Vertex: Staying aggressive

Source: Vertex

Vertex: Staying aggressive 

2011: $707 million
2010: $637 million
As a percentage of revenue: 50%
Research chief: Peter Mueller

Now that Vertex ($VRTX) actually has revenue to count, it can start to compare what it spends on research and development. But after scoring a landmark approval for the new standard therapy for hepatitis C, Incivek, the biotech has demonstrated that it plans to continue to step up research spending as the best method for safeguarding its financial future.

Vertex makes no apologies for spending an added $70 million on R&D last year, for a total of $707 million. The extra cash went into preparing for more clinical studies in 2012. And this year it says the total figure could climb as high as $760 million.

Much of that money will be earmarked to fuel its race for an interferon-free hep C cocktail. After finding itself with the leading new drug, Vertex soon after found itself trailing a pack of developers who had captured the imagination of investors with the potential of a new generation of treatments. But rather than coast along, Vertex executed a pact with Alios that gave it a promising program. And Vertex clearly intends to spend what it takes to catch up as quickly as humanly possible.

Under the direction of Peter Mueller, Vertex's R&D division has outlined plans for additional studies of the cystic fibrosis drug Kalydeco, both solo and in combination with VX-809 and VX-661. The combo with 809 recently posted promising mid-stage data for a large segment of the cystic fibrosis community, indicating that Vertex could be on a straight path to a much larger market. And that prospect helped rally a flagging share price. New development activities are planned for VX-509, a mid-stage JAK3 therapy for rheumatoid arthritis, and VX-787 for the treatment of influenza. And then there's continued investment planned to fund post-marketing studies of Incivek.

Vertex has some big challenges to face. But it has one of the most celebrated R&D chiefs in the business and the cash to pursue its goals. The odds may be long, but Vertex remains competitive on the R&D front.

Vertex: Staying aggressive

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