Vertex Gambles on New Cystic Fibrosis Drug to Cannibalize Sales of Trikafta
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Vertex is developing a new CF drug that performed well in trials and could get approved in 2024, competing with its existing best-selling CF drug Trikafta
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Rather than milk Trikafta revenue, Vertex plans to spend $100M to get faster approval for the new drug and accelerate the process of cannibalizing Trikafta
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This makes sense because the new drug will have lower royalty payments, meaning higher profit margins for Vertex even if revenue stays flat
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Vertex has done this before, repeatedly replacing older CF drugs with newer better versions while still growing revenue
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The move signals confidence that the new drug will expand Vertex's core CF business and profitability, benefiting patients and shareholders