The Motley Fool’s readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I’ve decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here is last week’s selection.
This week, I’m going to turn my attention to the biotechnology sector to highlight the truly exceptional CEO of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Jeffrey Leiden.
Despite only manning the helm of Vertex for a year, Jeffrey Leiden has done a phenomenal job of guiding both Vertex’s existing products and its pipeline. Vertex’s biggest claim to fame is Incivek, a medication that’s combined with intravenous interferon and ribavirin to treat hepatitis C. Sales of Incivek shot out of the gate like a rocket, completely leaving Merck & Co., Inc. (NYSE:MRK)‘s Victrelis in the dust.
However, revolutionary new forms of all-oral hepatitis-C treatments appear to be on the horizon from both Gilead Sciences, Inc. (NASDAQ:GILD) and AbbVie Inc (NYSE:ABBV). This week, Gilead tested its experimental hep-C drug, Sofosbuvir on patients with genotypes 2 & 3 that had failed prior therapies. Sofosbuvir, as it has in all previous late-stage trials, significantly outperformed the control arm, registering a cure rate of 76% after 13 weeks and 50% after 12 weeks. An approval appears all but a certainty. Similarly for AbbVie, its drug combination, when combined with a ribavirin, was nearly perfect in eliminating detectable levels of the hep-C virus in a 79-patient clinical trial.
While this should definitely be a concern that keeps Vertex from sitting on its hands, it’s also not the end of the world, either. For one, there have been numerous failures of hep-C pipeline candidates. None may be more memorable than Bristol Myers Squibb Co. (NYSE:BMY)‘s BMS-986094, acquired from Inhibitex, which caused the death of a patient in trials and hospitalized numerous others. Research on the drug was eventually discontinued, and Bristol was forced to write down $1.8 billion of the value of its Inhibitex acquisition. Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX) hasn’t fared much better with clinical holds being placed on two of its hepatitis-C pipeline candidates directly related to the cardiovascular concerns raised from BMS-986094’s failure. This leads me to believe that while Incivek may begin to be phased out over time, it still has plenty of revenue-generating capacity left to come.
Vertex’s remaining pipeline and FDA-approved treatments are nothing to sneeze at as well. Vertex is making solid strides in treating cystic fibrosis, with the approval of Kalydeco last year to treat those with the G551D mutation (about 4% of all cystic fibrosis patients), as well as ongoing trials of VX-809 in combination with Kalydeco. With so few cystic fibrosis treatments available, this could be another area where it claims significant market share.
