Vertex Pharmaceuticals (VRTX - Get Report) presents important final data from the phase II study of VX-809/Kalydeco at the 2012 North American Cystic Fibrosis (NACF) conference on Thursday, Oct. 11. I'm flying to Orlando, Fla., for the conference to cover the presentation and Vertex's investor meeting. Partial top-line results from this VX-809/Kalydeco study were announced over the summer (more on those data below). At the NACF meeting, we'll see a breakdown of response from the three different VX-809 dose groups, individual patient data and perhaps more insight into why the reduction in sweat chloride was smaller than expected (and whether this matters or not). Vertex has already made the decision to move the 600 mg dose of VX-809+Kalydeco into a phase III study to start early next year. [A higher 400 mg twice-daily dose of Kalydeco may also be included.] The phase II study of VX-809/Kalydeco has been shrouded in some controversy. Recall, investors were angered after Vertex was forced to revise (lower) interim results because of an internal data-analysis screw up. The company also changed the way it reported final data from the study, leaving the impression that some nasty bits about VX-809/Kalydeco might be in hiding. Vertex shares soared from $37 to $64 in May after the initial data from the VX-809/Kalydeco study were announced. Since then, however, the stock traded down, falling to $49, and is now close to $60. Vertex's cystic fibrosis drug franchise is the company's most important growth driver now that sales of the hepatitis C drug Incivek are falling. The F508del mutation patient population targeted by the VX-809/Kalydeco combination represents about 40% of cystic fibrosis patients and could generate $3 billion to $4 billion in sales (on top of the $1 billion or so in peak sales of Kalydeco monotherapy in the much smaller G551D mutation patient population). Here's your handy-dandy primer on what we know already about the phase II VX-809/Kalydeco study: The study tested three different doses of VX-809 (200 mg, 400 mg, 600 mg) plus the standard dose of Kalydeco against a placebo. For the first 28 days of the study, VX-809 was dosed alone; VX-809 was then combined with Kalydeco for days 28-56. The primary endpoint was improvement in lung function assessed by FEV1, which measures the amount of air a patient can forcibly exhale in one second. FEV1 is the measure of clinical benefit accepted by FDA and European regulators for the approval of new cystic fibrosis drugs. Reduction in sweat chloride is a laboratory marker of improved CFTR protein function (missing or malfunctioning CFTR proteins causes cystic fibrosis) and is a co-primarny endpoint of the study. The results: From the start of the study through day 56, patients treated with high dose (600 mg) of VX-809 and Kalydeco experienced a 6.7% improvement in lung function compared to placebo and a 3.4% improvement within the drug treatment group. Both results were statistically significant. Over the same time period, placebo-treated patients saw their lung function fall by 3.3%. Vertex has not yet disclosed final lung function results for all patients across the three different doses of VX-809. The company did say that patients treated with the low- and mid-doses of VX-809 plus Kalydeco also experienced statistically significant improvements in lung function compared to placebo although the improvements were lower than what was seen with the highest dose of VX-809. There was no decrease in sweat chloride for placebo patients from day 0 to 28 or day 28-56 in the study. For 600 mg VX-809 patients, there was a -5.91 nmol/l reduction in sweat chloride from day 0-28 and another -2.82 nmol/l reduction during day 29-56. The reduction in sweat chloride between the 600 mg VX-809 dose and placebo was not statistically significant.
@chasingthealpha asks, "How is $OSIR almost $360M in mcap? This is junk." Osiris Therapeutics (OSIR - Get Report) shouldn't trade for much more than cash -- let's call it $2 per share -- for fundamental reasons that I've written about for a long time. I'm not a believer in Osiris' stem-cell therapy Prochymal because the clinical data are entirely unconvincing. [It's been months since the <a href="http://www.thestreet.com/story/11590215/1/biotech-stock-mailbag-osiris-arena-ampio.html">Canadian approval</a> but still no sales.] Worse, Osiris has a bad habit of misleading investors about its business. Most recently, Sanofi (SNY) ended unilaterally a Prochymal partnership entered into originally by Genzyme, before Sanofi took over. Just about the only thing Osiris does well is manage its stock price, which at almost $11 has more than doubled this year. Shocking, but true. How does Osiris CEO Randy Mills do it? Simple, he doesn't really run a publicly traded company. Here's what he said this summer at an investor conference, in a fleeting moment of transparency: It's important to understand the ownership of Osiris and how we think. We are more than 50% held inside and I can walk into a room in Zurich with a handful of people and probably have 75% of the outstanding shares represented. Not by new traders but by people who have been investing in the company for 20 years. They are very long-term investors in the company and understand what the company is and where it's going. They are in it to create value and not to have the stock fluctuate day to day. Because of this, I get very clear direction. I know exactly who my boss is and I know exactly whether he is pleased or not pleased with what I'm doing. Because it is our company, because we essentially own it, we don't do things that in the long term would decrease our value. [Emphasis mine.] The "boss" Mills refers to is Swiss investor Peter Friedli and the handful of people who own 75% of Osiris' outstanding shares -- Friedli's friends and business associates. This is why Osiris has a $360 million market value. -- Reported by Adam Feuerstein in Boston. Follow @AdamFeuerstein