Vertex Pharmaceuticals saw its shares jump 16% to close at $36.71 on Friday, as investors reveled in the news that the company has pretty much secured the future of its promising hepatitis drug, VX-950, after signing a $545 million deal with healthcare major Johnson & Johnson.
Under the terms of the deal, J&J unit Tibotec will support development of the drug -which has already demonstrated a potent ability to dramatically cut hepatitis C viral load in the blood without serious side effects - while another J&J group, Janssen Pharmaceutica, gains exclusive ccommercialisation rights to the agent in Europe, South America, the Middle East, Africa and Australia.
Vertex will retain exclusive commercial rights in North America, and will get an upfront payment of $165 million upon signing. In addition, the group could be adding substantial ballast to its coffers with up to $380 million on successful development and launch of VX-950 in the territories, and a royalty stream on product sales in Europe and other territories outside of North America and the Far East.
The companies have also agreed to establish a global health initiative, primarily geared towards developing nations, that aims to help boost the prevention, diagnosis, treatment and cure of the disease.
Summing up the need for an increased effort in the area, Joshua Boger, President and Chief Executive Officer of Vertex, remarked: “Hepatitis C virus infection represents a significant public health concern around the world…An estimated 170 million people are infected with HCV worldwide, however only a fraction of those patients are diagnosed and even fewer are treated.”