"We," "us," "Vertex" and the "Company" as used in this Annual Report on Form 10-K, refer to Vertex Pharmaceuticals Incorporated, a Massachusetts corporation, and its subsidiaries.
"Vertex" is a registered trademark of Vertex. "Lexiva" and "Telzir" are registered trademarks of GlaxoSmithKline plc. Other brands, names and trademarks contained in this Annual Report on Form 10-K are the property of their respective owners.
PART I
ITEM 1. BUSINESS
OVERVIEW
We are in the business of discovering, developing and commercializing small molecule drugs for the treatment of serious diseases. In November 2010, we submitted a new drug application, or NDA, requesting approval to market telaprevir in the United States for the treatment of patients with chronic hepatitis C virus, or HCV, infection. In January 2011, we received priority review designation for our telaprevir NDA from the United States Food and Drug Administration, or FDA, and the target date for the FDA to complete its review of the telaprevir NDA is May 23, 2011. We expect to obtain approval for and initiate sales of telaprevir in the United States in 2011. We are pursuing a number of other clinical development programs, including a registration program for VX-770, the lead drug candidate in our cystic fibrosis, or CF, program. We plan to continue investing in our research and development programs and to develop and commercialize selected drug candidates that emerge from those programs, alone or with third-party collaborators.
OUR PIPELINE
Our pipeline is described in the following table. In addition to the drug candidates listed below, we are engaging in Phase 1 clinical trials and/or nonclinical activities with respect to a number of additional drug candidates, including compounds intended for the treatment of HCV infection, CF and influenza.
OUR STRATEGY
Our goal is to be a biopharmaceutical company with industry-leading capabilities in the research, development and commercialization of innovative drugs that provide substantial benefits to patients with serious diseases. The key elements of our strategy are:
Obtain FDA marketing approval for and effectively commercialize telaprevir in the United States. We are focused on obtaining approval for and successfully commercializing telaprevir as a treatment for patients infected with genotype 1 HCV. We have submitted our NDA for telaprevir to the FDA and plan to initiate sales of telaprevir in the United States in 2011. We are seeking approval to market telaprevir as a treatment for patients infected with genotype 1 HCV who have not received previous treatment for their infection, referred to as treatment-naïve patients, and patients infected with
genotype 1 HCV who have failed to achieve a sustained viral response, or SVR, after prior treatment with pegylated-interferon, or peg-IFN, and ribavirin, or RBV, referred to as treatment-failure patients.
Become a biopharmaceutical company capable of discovering, developing and commercializing medicines. We believe we need an effective sales and marketing organization to augment our research capabilities, late-stage development organization and third-party manufacturing relationships. In 2010, we established a sales and marketing organization in the United States to support the sale of telaprevir, if approved. In order to support the potential Canadian launch of telaprevir, we have begun establishing sales and marketing capabilities in Canada. If our registration program for VX-770 is successful, we also intend to establish sales and marketing capabilities in Europe in order to prepare for potential commercial sales of VX-770 in international markets.
Invest in research and early-stage and mid-stage clinical development programs. We intend to continue to invest significant resources in research programs and early-stage and mid-stage clinical development programs as part of our strategy to develop drug candidates in disease areas with significant unmet medical need. In 2011, we are continuing to conduct Phase 2 clinical trials involving drug candidates that could address significant unmet needs in HCV, CF, rheumatoid arthritis and epilepsy. We expect to continue focusing our research activities toward therapies addressing serious diseases, because we believe these therapies have the potential to deliver the greatest value for patients, physicians and the health care system.
Capitalize on collaboration arrangements and business development opportunities. Collaborations have provided us with financial support and other valuable resources for our development and research programs, and business development opportunities have provided us with drug candidates and important research resources that have contributed to a number of the drug candidates in our current development pipeline. We plan to continue to rely on collaborators to support, develop and/or commercialize some of our drug candidates in markets in which we are not concentrating our resources. We also opportunistically seek to license or acquire drugs, drug candidates and other technologies that have the potential to strengthen our pipeline, drug discovery platform or commercial opportunities.
DRUG CANDIDATES
HCV Infection
Telaprevir (VX-950) (investigational oral HCV protease inhibitor for the treatment of HCV infection)
Telaprevir, our lead drug candidate, is an orally-administered hepatitis C protease inhibitor that we have evaluated in treatment-naïve and treatment-failure patients with genotype 1 HCV infection in combination with peg-IFN and RBV. Telaprevir works by inhibiting the NS3-4A serine protease, an enzyme necessary for HCV replication.
We have collaboration agreements with Janssen Pharmaceutica, N.V., or Janssen, a Johnson & Johnson company, and Mitsubishi Tanabe Pharma Corporation, or Mitsubishi Tanabe, relating to the development and commercialization of telaprevir. Pursuant to these agreements, we are responsible for the commercialization of telaprevir in North America, Mitsubishi Tanabe is responsible for the commercialization of telaprevir in certain Far East countries, including Japan, and Janssen is responsible for the commercialization of telaprevir in the rest of the world. Telaprevir was discovered in our collaboration, now ended, with Eli Lilly and Company. We expect to pay Eli Lilly certain royalties on future sales of telaprevir.
On November 23, 2010, the FDA received our NDA for telaprevir. In January 2011, the telaprevir NDA was accepted for filing by the FDA, and we received priority review designation. The FDA's target review completion date for telaprevir is May 23, 2011. The FDA's regulatory review process for
the telaprevir NDA includes, among other things, a detailed review by the FDA of the data and information contained in the NDA, meetings and frequent communications between us and representatives of the FDA, and FDA inspections, including inspections of clinical trial sites and third-party facilities used to manufacture telaprevir. If applicable regulatory criteria are not satisfied, the FDA could refuse to approve or delay the approval of the telaprevir NDA. In addition, we have completed our New Drug Submission to the Therapeutic Product Directorate of Health Canada. Telaprevir was granted priority review in Canada. We are seeking to obtain approval for and launch telaprevir in Canada in the second half of 2011.
In December 2010, Janssen announced that the marketing authorization application, or MAA, for telaprevir was granted accelerated assessment by the European Medicines Agency, or EMA, in the European Union. Review under the accelerated assessment procedure is provided by the EMA for drug candidates of major therapeutic interest and shortens the timeframe for review by the EMA. In the first quarter of 2011, the EMA accepted the telaprevir MAA. Janssen is seeking to obtain approval for and launch telaprevir in the European Union in the second half of 2011.
Background: Prevalence and Treatment of Hepatitis C Virus Infection
Exposure to the hepatitis C virus often leads to chronic infection, although patients frequently do not have symptoms and are unaware that they have become infected. Over time, liver inflammation develops in many patients, which can progress to scarring of the liver, called fibrosis, or more advanced scarring of the liver, called cirrhosis. Patients with cirrhosis may go on to develop liver failure or other complications of cirrhosis, including liver cancer. The World Health Organization has reported that HCV infection is responsible for more than 50% of all liver cancer cases and two-thirds of all liver transplants in the developed world.