Vertex Pharmaceuticals (VRTX) is acquiring an experimental, longer-acting version of its cystic fibrosis drug Kalydeco from Concert Pharmaceuticals (CNCE) for use in future combination regimens to treat the underlying cause of the inherited lung disorder.
According to terms announced Monday, Concert will receive $160 million in cash from Vertex for worldwide rights to the drug known as CTP-656. Concert is also eligible for another $90 million from Vertex if CTP-656 secures approval in the U.S. and approval and reimbursement in Europe.
CTP-656 is essentially the same drug as Vertex's Kalydeco except hydrogen atoms are replaced by deuterium atoms to make it last longer in the body. Where cystic fibrosis patients must take Kalydeco twice per day, Concert has presented data showing CTP-656 can be taken once daily.
The convenience of a once-daily version of Kalydeco is important to Vertex because it has the potential to simplify dosing of combination regimens the company has in development, or may develop in the future to treat cystic fibrosis.
For example, Vertex's latest and most important cystic fibrosis doublet in late-stage clinical trials right now, tezacaftor/Kalydeco, is formulated into a single tablet taken by patients in the morning. But patients must also take a second dose of Kalydeco at night.
Once Vertex gains control of CTP-656, it could be combined into a single tablet with tezacaftor that patients would only need to take once per day without another pill needed at night.
Concert started a phase II study of CTP-656 late last year. Once the deal closes, Vertex will take over conduct of the phase II study and be in charge of all future development of the drug.
Concert's business model is based on using deuterium chemistry to develop improved versions of existing drugs. Concert's chemical modifications are typically done to drugs that are otherwise under patent protection, so from a legal standpoint, it's easier for the company to enter into partnerships, which it has done with Avanir Pharma, Celgene and Jazz Pharmaceuticals.
Until Monday, Concert was developing CTP-656 on its own, which placed the company at risk for being sued for patent infringement by Vertex, Concert has previously acknowledged.
Concert's concern about a potentially expensive legal fight with Vertex likely played a part in the modest deal terms for CTP-656. So did the fact that CTP-656, on its own, wasn't going to be entirely useful in a cystic fibrosis treatment market moving rapidly toward combination regimens.
At most, gaining full control of the drug will only cost Vertex $250 million, and Concert will get no ongoing royalties on sales of the drug, if approved.