The Antidote: Inside the World of New Pharma (48 page)

The following Monday at the start of business the FDA notified Vertex by fax that it had approved Incivek. The label had no serious issues. The blockade was down. Within an hour, a twenty-four-hour nurse hotline was activated, and the sales and patient support operations went live. Outside Chicago white-suited line workers started final packaging around the clock, determined to have the drug on loading docks within twenty-four hours, to reach the first pharmacies by Wednesday.

After a brief flurry of champagne toasts across the various departments, Emmens, Mueller, Smith, Wysenski, Pace, and Partridge converged on the square windowless room outside Smith’s first-floor office in JB-II for an eleven o’clock conference call with analysts. The table was littered with scripts, whiteboard markers, Dunkin’ Donuts cups, Diet Cokes, and BlackBerrys. Kauffman, traveling, was on his cell phone in an airport, available to answer questions.

“Two things to hit on,” Partridge coached. “The DDIs in the med guides; throughout the label—with food . . . with food.”

“Stay away from all comments on Victrelis,” Smith advised. “We’re very happy with our label. That’s it. Any questions on consensus projections, I’d best take them.”

The most urgent question, of course, was price. After Emmens and Mueller laid out the particulars of how Vertex had discovered and studied Incivek and elaborated on the breakthroughs the drug represented to patients and physicians, Wysenski announced its decision on how and what to charge for its first product.

“We believe that patients who need Incivek should be able to get it regardless of their ability to pay,” she began. Vertex had assembled a commercial program not unlike “need-blind” admissions, which as practiced by wealthy colleges and universities amounts to: we’re going to charge premium prices but we say to you that if you qualify and we accept you
we’ll make sure you can be here, even if it means we pay your way. Once you received a prescription for Incivek, Wysenski said, you could go to a website and find a menu of copay assistance and free-medicine programs. Dressed crisply in black slacks, a paisley blouse, a lime-green rain jacket, and a chain necklace, she elaborated:

“Our copay assistance program is designed to cover up to 20 percent of the total cost of Incivek for the full course of treatment for people who are covered under commercial providers. The copay program has
no
income restrictions. For people who are
uninsured
or
who are rendered uninsured
, and also have an adjusted gross household income of less than $100,000, we plan to provide Incivek for free.

“Now to Incivek pricing.” Wysenski paused; Emmens and Smith performed silent drumrolls. “We’ve set the price of Incivek at $49,200 for the entire twelve-week course of therapy.

“I’d like to comment on the factors that we considered in our pricing decision. Broadly speaking our mission is to discover, develop, and launch medicines that cure or significantly advance the treatment of serious and life-threatening diseases. This is both expensive and risky, and we are committed to spending the money needed to enable us to tackle more tough diseases—this includes hiring and retaining the best scientists and medical team possible. More specifically, we took into account the fact that unlike HIV or hepatitis B, hepatitis C can be cured with a single course of treatment. We also considered the costs of other medicines and procedures used today to treat and care for people with hepatitis C and how well those treatments work.”

By decoupling price from access to drug, Vertex presumed to diffuse any controversy while reassuring doctors that Incivek was a premium product. As the colleges and universities long ago discovered, with certain products, like education and medicine, consumers accept and trust that high costs confer higher quality and greater value, and so Vertex had no reason, other than access to strapped government dispensaries, to compete with Merck on pricing.

The analysts, following up, requested numerous clarifications. They had based their valuations for the most part on a lower price. Even if they had gotten the cost of Incivek wrong they wanted to be sure they could
defend their previous projections about how VRTX could be expected to do in the months ahead, even if it meant rejiggering the prescription rates they used in forecasting income. The stock price started the morning pointing downward, but throughout the conference call it recovered, rising more than 1 percent. As the discussion wound down, Wysenski and Pace fist-bumped, then, as the participants started collecting their materials, Partridge took a call from an investor, Adam Koppel.

If there was one fund manager most closely, and emotionally, tied to the company, it was Koppel. As a managing director of the Boston-based Brookside Capital, a Bain Capital–owned hedge fund, he currently held about five million shares. Koppel had made his career on Vertex, first buying VRTX after meeting Boger in 2004, then moving in and out of the stock over the years. In 2006, when the share price dropped into the high teens, he bet big, making it Brookside’s largest holding by far. Its peak position was about $280 million.

Koppel came to investing from medical research and consulting. After finishing an MD-PhD in neuroscience at the University of Pennsylvania in the 1990s, he took an additional year to earn an MBA before going to work for McKinsey, advising biotechs. What he looked for in companies was the “DNA” to replicate success, and he believed Vertex was the first biotech since Genentech to have it. Koppel got to know Boger, Smith, Alam, and Graves during the heady, triumphalist period of Incivek’s clinical program, and he loved the company’s swagger and way of thinking. Loyal to the old guard, he at first gave Wysenski a rough time, attacking her commercial strategy as thin. He thought the jury on Emmens was still out.

Koppel was “so shocked,” he said, by the Merck-Roche alliance that he felt he needed to hear from Emmens directly. “Can you just help me understand what they’re thinking?” he asked.

“I believe they’re on their back foot now in the market,” Emmens said. “So they’re gonna attack rash. Roche gives them an additional voice. It doesn’t change the drug. We have the better drug.”

Koppel was eager to know if Vertex was in the market to buy a late-stage nuc, to counter the threat from Pharmasset, BMS, and Gilead, where McHutchison and the clinical team had several nucs and were
running an array of clinical trials, testing them in various combinations. “We won’t discuss business development,” Emmens said. Smith, out of earshot, mentioned that Koppel’s fund also owned 10 percent of a company, Idenix, that was promoting a nuc.

“Roche doesn’t have any skin in the game,” Emmens told Koppel. “Its reps have no incentive to say boceprevir is better. I don’t think you can take a rep and turn his brain off.”

Pace ushered Emmens to a small room in the communications suite directly after the call, to begin a round of press interviews. His time in the spotlight had arrived. Whether he truly thought the Merck-Roche tag team represented no real material threat to Vertex or was simply unfazed by a weaker product, Emmens was compelled, as Boger had always been, to challenge industry behemoths. “We be small,” he liked to tell company employees, “but we be fierce.” He told the interviewers what he’d told the analysts: Vertex had the better drug, more effective, simpler to use; the pricing decision was “appropriate” given the relative value to patients, physicians, and payers; the Merck-Roche alliance was bluster. “It’s a relatively small number of prescribers,” he told Reuters. “I don’t think we need to shout too loudly.” Looking ahead, he said, to the next wave of competition for supremacy with an all-oral treatment, Emmens noted that it was easy to lose one’s head over preliminary results and that most experimental drugs fail.

“The new standard you have to compare yourself to is tough,” he said. “It’s us.”

“Welcome, everybody, in this evening hour,” Mueller began, addressing an invited group of about a hundred—those who had worked most closely in bringing VX-950 out of the lab, through the clinical and regulatory gauntlets as telaprevir, and finally to patients, as Incivek. He stood near the checkout counter in the JB-II cafeteria, the largest space in the building, hours after the markets had closed. More champagne was passed around. Most of their coworkers were back at their desks or headed home. “I think it is a fantastic event, and I’m so excited I can’t tell you. I cannot still believe that it happened, but it did.”

“I can’t believed that you hugged me today!” Emmens shouted from the sideline.

“I think that is the most astonishing accomplishment and achievement that we have as a company, and now we are moving really in the right direction,” Mueller said. “I want to introduce you to a new type of tradition that we will have in the future. This monster is a bell: the transformational life bell.” Mueller uncovered an old firehouse bell, bought on eBay, mounted on a rolling cart, and painted purple. He explained that throughout human history, a tolling bell has signified, among other things, hope, freedom, accomplishment and unity, and that from now on, Vertex would ring its bell whenever it received regulatory approval for a new product.

“When we really think about what we did with this wonderful Incivek approval today, we gave hope to millions of people who have now the freedom to achieve a better life and a cure. I think that this is really fantastic. The accomplishment I really want to give back to you.”

No one in the room—not Kauffman, Murcko, Kwong, Kieffer, Hurter, Condon, Weet, or the many others who contributed key insights or volunteered extra weekends when a problem needed solving—no one could say definitively which of them had been indispensable, making the decisive difference, enabling Vertex against withering odds and the best efforts of its many competitors to keep going, push upfield, take its shot on goal, and score. Murcko calculated there were at least fifty major contributors without whose timely work the project might have stalled. In his toast, Mueller recognized them all collectively.

“I want to say just a couple of words to remind everybody. When we started out it was a very, very difficult active site to approach. Protease inhibitors are a tough thing to do and not many are out there. I think our scientists and our environment did a phenomenal job to tackle that type of approach. Then it looked like you never could make the drug. The first kilogram cost $2.5 million. To do any sort of clinical trials was almost impossible for a small company. It was a bold decision to move forward.

“And then we learned that nobody can swallow the drug because
no one can formulate it. I must say we did a phenomenal job to come forward with the presentation as it is today: two tablets daily three times a day. This was not a given. With the clinical trials we had those long periods in front of us, forty-eight-week regimens, which is a huge, huge problem for a small company to do. It’s costly, it’s time consuming, it’s difficult. I must say the clinical guys revved up phenomenally, to change the treatment paradigm. This is not easy to accomplish. There were tons and tons of interactions with the regulatory agencies needed to accomplish this. We built in the last year the most sophisticated manufacturing network that basically provided us a supply chain that is unheard of in industry. Cost of goods now is orders of magnitude less than it was initially. This is a huge, huge difference.”

Vertex created Incivek, but Incivek also created Vertex. Mueller was its main beneficiary, inheriting a small world-class research organization with a powerful scientific culture; expanding it in conjunction with a bold, committed clinical group; bringing in inspired CMC and manufacturing; assembling a lean, $500 million-a-year outfit with a record of success and a promising pedigree. He was the scientific leader of a maturing drug company just beginning to make its mark on the world, and he knew the future depended not only on his ability to advance and incorporate new methods but upon the alliances he built. He finished by praising their united spirit. “You cure people,” he said. “This is the high art of what we are in. This is a phenomenal ongoing journey. And it’s not just Vertex alone; it’s Vertex in the context of a broader community. We are all working together in trying to tackle the tough diseases that nobody else can tackle.”

Mueller pulled the rope on the side of the bell. Its deep, mellow sound filled the cafeteria. He pulled the rope again, beaming, and again, until the sound of the bell was drowned out by the exultation in the room.

Notable by his absence was John Thomson. He sat at his desk downstairs, plowing through his email. Thomson had just returned from China. He wanted to get home to see his wife, Jackie. In the tolling upstairs, few were reminded that among the major intellectual turning points that resulted in Incivek, it was the initial belief that such a drug was possible and that Vertex, with its severely limited resources, could
produce one, that ignited all the others. No one in the early days believed more fervently or worked as hard or proved as much or argued more determinedly against giving up. Thomson remained the truest of true believers in Boger’s original vision, and Incivek was as much his achievement as it was the company’s.