The harsh reality is that more than 109,000 people died from a drug overdose in 2022, placing the national total since 2000 at more than 1.1 million overdose deaths. Not surprising, then, that a study from RAND found that more than 42% of the participants reported personally knowing at least one person who’s died from an overdose.
A number of these overdoses were due to opioid addiction. That’s why doctors are seeking safer post-surgical alternatives to the addictive opioids that are linked to thousands of deaths in the U.S. annually. Patients often get hooked on the drugs after getting a prescription after surgery or from a serious injury.
So if a pharmaceutical company could come up with a non-addictive drug to help patients with acute pain, it will likely turn into a blockbuster - along the lines of those GLP-1 weight-loss drugs.
Here's a closer look at one pharma company is getting closer to achieving such a feat.
Vertex Pharmaceuticals: An Alternative to Opioids
That company is Vertex Pharmaceuticals (VRTX), an S&P 500 Index ($SPX) firm with a market capitalization of $110 billion. Vertex announced on Jan. 30 that its non-opioid pain treatment, a pill called VX-548, passed three Phase III studies with flying colors. Its drug was found to induce significant pain reductions in various situations.
Two of these late-stage studies assessed VX-548 in patients who had undergone either a tummy tuck - also known as abdominoplasty - or bunionectomy, which is a corrective procedure to remove a bone deformity in the toes. The results showed that the drug eased pain after surgery by significantly more than a placebo. Relief also came faster, with participants who received Vertex’s treatment in the trials reporting reduced pain within a few hours.
There were also few side effects to treatment, supporting Vertex’s case that its medicine could be widely used. In a statement, Vertex said it plans by mid-year to ask the FDA for approval of VX-548 in moderate-to-severe acute pain.
However, the results were not all good news. VX-548 did not prove superior to a combination of the widely prescribed opioid hydrocodone bitartrate and Tylenol, falling short on this key secondary goal that Vertex had set for both trials.
How VX-548 Works
Still, the findings were rare good news in a long history of mostly futile efforts to develop drugs that can knock out pain without the potential for dependency that comes with opioids. Vertex spent many years developing this drug, building upon research showing the role cellular gates, known as sodium channels, play in relaying pain signals.
Certain types of these gates are found only in peripheral nerve cells. This is crucial, because sodium channels are vital for many functions, and blocking them broadly would come with unacceptable side effects. VX-548 inhibits one of these peripheral channels, dubbed Nav1.8, to tamp down pain signaling from nerve cells to the brain.
Vertex believes VX-548 solves the trade-off physicians and patients face when weighing the efficacy of opioid painkillers against their risk.
While not perfect, the positive findings are a boost for Vertex, which has put VX-548 at the center of its plan to expand beyond the cystic fibrosis (CF) drugs that made it one of the largest biopharmaceutical companies by market capitalization.
Why Vertex Stock Is a Buy
The company also continues to benefit from high sales of Trikafta/Kaftrio - its triple-combination CF regimen. While Vertex is now able to treat the majority of cystic fibrosis patients in North America, Europe, and Australia, management believes that it could treat up to 90% of all people with CF if it receives approval for expanded indications. Vertex estimates that there are 83,000 patients living with CF in the U.S., Europe, Canada, and Australia.
In addition, the company continues to gain approval for younger age groups for its cystic fibrosis drugs, and to expand the number of countries providing coverage for these products. It recently announced plans to submit its “vanza triple” regimen to global regulatory authorities by mid-2024, including a New Drug Application to the FDA and a Marketing Authorization Application with European regulators for CF patients aged 6 years and older.
The company’s fourth-quarter product revenues were up 9% year-on-year, driven by solid performance of Trikafta/Kaftrio. Sales of this drug were up 15% year-on-year, due to uptake for children aged 2-5 in the U.S. following the treatment’s recent launch and label extensions outside of the U.S. for younger children.
Vertex is also investing in diseases like sickle cell (it recently won a landmark approval of the first CRISPR-based drug), and Type 1 diabetes. The company said in December that VX-548 also helped patients with chronic nerve pain caused by diabetes.
In December, the FDA approved Vertex’s gene-editing treatment for two blood disorders, sickle cell disease and transfusion-dependent beta thalassemia. The drug, called Casgevy, was developed in collaboration with Crispr Therapeutics AG (CRSP).
Casgevy could have strong pricing power and eventually become a blockbuster drug. I like that two additional phase 3 studies have been initiated to evaluate Casgevy in pediatric patients, which would broaden the addressable patient population, if approved.
Vertex CEO Reshma Kewalramani recently touted VX-548’s potential to investors, pointing to the large market for a potent, safe and non-addictive pain killer. And he’s right - Vertex is on the verge of bringing the first new class of medicine for acute pain in over 20 years.
Each year, more than 80 million people in the U.S. suffer from acute pain episodes. That could translate to VX-548 reaching peak sales of more than $10 billion a year.
The odds are high that Vertex will be adding a lucrative acute pain blockbuster drug to its lucrative CF franchise. This makes VRTX stock a buy under $450.
