The report, which is exaggerated or misinterpreted, appears to have been erroneous and triggered a short stock drop before the company and various analysts responded, calming investors.
According to a government database run by the U.S. Food and Drug Administration (FDA), 30 patients have died after taking Vertex Pharmaceuticals’ Symdeko (tezacaftor/ivacaftor and ivacaftor) for cystic fibrosis. However, the report, which is exaggerated or misinterpreted, appears to have been erroneous and triggered a short stock drop before the company and various analysts responded, calming investors.
The drug was approved in February 2018 in patients ages 12 years and older with two copies of the F508del mutation or one mutation responsive to the drug. Symdeko is the company’s third drug for cystic fibrosis.
CF is a rare, life-shortening genetic disease. It affects about 75,000 people in North America, Europe and Australia. It is caused by one of about 2,000 known mutations in the CFTR gene. When the CFTR protein is missing or defective, it results in poor salt and water flow in and out of the cells in numerous organs. In the lungs, this causes a buildup of abnormally thick, sticky mucus that can cause chronic lung infections and progressive lung damage that in many patients leads to death.
Vertex stated there is no evidence linking Symdeko use with the reported death. It further said the FDA has not communicated with the company about the drug’s safety. Nonetheless, company shares dropped as much as 4% at the news.
STAT reported, “Word of the deaths spread through Wall Street back channels Wednesday morning, leading to a flash crash on heavy trading volume. By midday, Vertex had recovered all of its paper losses. In a note to clients, Piper Jaffray analyst Edward Tenthoff said he found the ‘timing of this short rumor to be suspicious during a quiet, end-of-summer week.’”
Symdeko raked in $362 million in this year’s second quarter alone. The drug’s list price is $292,000 per year.
The database is the FDA’s Adverse Event Report System (FAERS). In addition to Tenthoff, Evan Seigerman, an analyst with Credit Suisse, noted that “We do not believe that this is new information.”
Although likely a false alarm or overreaction, this is not the first time FAERS has triggered stock concerns. On August 8, Sarepta stock plunged 13% after a report related to the FAERS database that a child in one of the company’s clinical trials for Duchenne muscular dystrophy was hospitalized with rhabdomyolysis. One particular problem with this is that the FAERS database is intended for adverse events of approved drugs, not experimental drugs.
Sarepta stated at the time, “Our investigation to date indicates that this report was not submitted to the FAERS database by a Sarepta employee or the study’s principal investigator. The submission reported a case of rhabdomyolysis in a participant in Sarepta’s Study SRP-9001-102, a blinded, placebo-controlled trial investigating the use of Sarepta’s micro-dystrophin gene therapy candidate in patients with Duchenne muscular dystrophy. Two weeks post-infusion, the patient presented with dark colored urine and elevated creatine phosphokinase (CK) levels but was otherwise asymptomatic. He was hospitalized for observation, discharged the following day and test results returned to baseline.”
Rhabdomyolysis is common in DMD patients.
This may be why Tenthoff calls the Vertex drop “suspicious.” The analyst may not be suggesting that someone is using the database as a way to manipulate stock, but that this particular drop didn’t make sense in terms of what was actually known.
Vertex stated, “Symdeko has been used globally by thousands of patients since its first approval in February 2018. We have not received any communication from the FDA regarding any concerns about the safety profile of Symdeko. In Phase III studies of more than 1,000 patients, Symdeko showed significant benefits in increasing FEV and reducing pulmonary exacerbations in CF patients. We have no evidence that links Symdeko treatment to the deaths reported in the FAERS database.”
