Vertex Discontinues Diabetes Asset, Shifts Focus to Advanced Candidate

Vertex Pharmaceuticals has announced the discontinuation of its drug-device combo therapy for type 1 diabetes (T1D), VX-264, following disappointing efficacy results in a Phase I/II trial. Despite this setback, the company remains committed to advancing its diabetes portfolio, with analysts expressing optimism about the potential of Vertex's more advanced T1D candidate, zimislecel.

VX-264 Discontinuation and Financial Impact

Vertex revealed that VX-264, a pancreatic islet cell therapy encapsulated in the company's proprietary immunoprotective device, failed to meet the efficacy endpoint in a 90-day analysis of a Phase I/II trial. While the therapy met safety endpoints, it did not demonstrate sufficient increases in peak C-peptide, a marker of insulin production, to deliver meaningful benefits to patients.

As a result of this decision, Vertex will incur a $400 million impairment charge. However, analysts from Jefferies and BMO Capital Markets have downplayed the significance of this financial hit, noting that VX-264 was not a primary focus in industry expectations.

Zimislecel: Vertex's Leading T1D Candidate

With the discontinuation of VX-264, attention has shifted to zimislecel (formerly known as VX-880), Vertex's more advanced T1D candidate. Zimislecel, an islet cell therapy administered without a device and in conjunction with standard immunosuppression, is currently in Phase III clinical trials.

Key highlights of the zimislecel program include:

1. Enrollment and dosing for the Phase III trial are expected to be completed in the first half of 2025.
2. Regulatory submissions are anticipated in 2026.
3. The therapy has received various regulatory designations, including Regenerative Medicine Advanced Therapy (RMAT) and Fast Track status from the FDA.
4. Previous data showed that 12 patients on a full dose of zimislecel produced endogenous insulin by day 90, with 11 patients reducing or eliminating exogenous insulin use.
5. Three patients eligible for long-term follow-up at one year met the primary endpoint of eliminating severe hypoglycemic events, reducing HbA1c levels, and achieving insulin independence.

Analysts from BMO Capital Markets project worldwide peak sales of $900 million for zimislecel by 2032, potentially adding significant value to Vertex's portfolio.

Future Developments and Competition

Despite the setback with VX-264, Vertex remains committed to developing solutions that mitigate the need for immunosuppression in T1D therapies. The company is exploring alternative approaches, including:

1. Alternative immune-suppressant regimens
2. Gene-edited hypoimmune stem-cell derived islet cell therapies
3. Novel devices for encapsulating islet cells

In the competitive landscape, Sana Biotechnologies has recently reported initial signs of insulin production in a Phase I trial of its hypoimmune allogeneic islet cell therapy. However, Vertex maintains a significant lead with its Phase III zimislecel program.

As Vertex continues to advance its diabetes portfolio, the company is simultaneously preparing for the launches of two recently FDA-approved therapies: Journavx, a non-opioid pain medicine, and Alyftrek, a cystic fibrosis triple therapy. These developments, combined with the progress in its diabetes program, position Vertex as a key player in the pharmaceutical industry's growth trajectory.