Americans filled roughly one opioid pain prescription for every two U.S. adults in 2020—despite a raging opioid epidemic, where 80,000 people a year fatally overdose. Everyone knows the drugs are dangerous, but patients need pain relief, and the alternatives are limited.
A nonaddictive pain pill that works as well as an opioid, with none of the same addiction risk and side effects, would be an instant blockbuster. Drug companies have met with repeated failures in their efforts to develop one, but
Vertex Pharmaceuticals
(ticker: VRTX) could be close to a breakthrough.
Late this year or early next, the company plans to announce the results of four studies of a pain drug it calls VX-548. Three of the studies are testing VX-548 taken over a short period as a treatment for acute pain, while a fourth aims to measure the efficacy of the drug when taken over a longer duration for chronic pain.
If the trials are successful, sales of VX-548 could hit $5.1 billion a year by 2030, according to Leerink Partners analyst David Risinger. That would be transformative for Vertex, which currently sells treatments for cystic fibrosis and records annual sales of under $10 billion.
“The opportunity is wildly underestimated,” says Risinger.
He compares the potential of the Vertex pain pill to that of Wegovy and the other GLP-1 obesity drugs that made
Eli Lilly
(LLY) and
Novo Nordisk
(NVO) the most valuable companies in biopharma. “Obesity drugs had underperformed and failed for 20 years, and people didn’t contemplate how big the market was,” Risinger says. “The exact same is the case here for pain.”
Some scientists who study pain, however, aren’t yet convinced by VX-548. They say that while the need for the drug is clear, its efficacy isn’t. In an editorial published in the New England Journal of Medicine in August, Dr. Mark S. Wallace, a professor in the department of anesthesiology at the University of California, San Diego, wrote that the methodology of early trials of VX-548 make it difficult to gauge how effective the drug is at reducing pain.
In a study of patients recovering from tummy-tuck surgeries, and another of patients recovering from bunion corrections, subjects who received a high dose of VX-548 reported more reduction in pain than those who received a placebo or an opioid.
But Wallace points to potential problems with the trial, suggesting that the opioid used may not have been given frequently enough, and noting that patients were allowed to take ibuprofen along with the medicines being tested but that data on how they used the ibuprofen weren’t presented.
The risk that the next set of trials could find that the drug has limited efficacy will chill investors who watched the potentially multibillion-dollar market for Aduhelm,
Biogen’s
(BIIB) hotly anticipated Alzheimer’s disease therapy, deflate over the same concerns in 2021.
A Vertex spokesperson told Barron’s that both the tummy-tuck and bunion-removal trials were “unambiguously” successful. The spokesperson said the Phase 2 trials weren’t designed to compare the effect of VX-548 with the effect of the opioid, but that the continuing Phase 3 trials are. As for the ibuprofen, the spokesperson said that allowing for its use is “typical” in this type of study, and that data on how it was used weren’t included in the report because it wasn’t what the study was designed to measure.
Even if VX-548 proves less potent than the company hopes, it could open the door to better nonopioids in future. Yale neurology professor Dr. Stephen Waxman points to the earliest statins, drugs that prevent heart attack and stroke. While first statins weren’t particularly effective, “they encouraged the development of subsequent generations of statins, which were very important,” says Waxman.
But nonopioid pain drugs have a history of disappointing investors. The most recent example, nerve growth factor inhibitors, were plagued with safety issues:
Pfizer
(PFE) and Lilly got as far as a Food and Drug Administration rejection of their version of the drug before dropping it in 2021, while
Regeneron Pharmaceuticals
(REGN) killed its version late last year, despite some positive Phase 3 data. Today, the only nerve growth factor inhibitor pain medicines on the market are drugs for pets.
VX-548 works differently than opioids and other pain medicines, which block transmission of pain within the central nervous system. VX-548 interrupts pain signals before they reach the brain, blocking a specific sodium channel that transmits pain in the peripheral nervous system. While the science underlying the medicine has existed for decades, earlier efforts to design similar pills resulted in medicines with serious side effects. VX-548 is more precise in its targeting, and its side effects appear minimal.
The question for investors is whether to buy the stock ahead of the coming trial results. If the studies show that VX-548 is better than a placebo and as good as an opioid—with no worse side effects—FDA approval and widespread adoption could come quickly.
In a note out in early October, Goldman Sachs analyst Salveen Richter wrote that if VX-548 appears to work as well as an opioid in the Phase 3 trials focused on acute pain, Vertex shares, recently $362, would be worth an additional $58 each. If the drug works even better than opioids, she writes that it would be worth an additional $88 per share. In a best-case scenario—if the chronic-pain study is also positive—Richter estimates that the stock would be worth an additional $119 per share.
Richter is less concerned about the downside risk if the trials fail. She says the market currently isn’t giving Vertex much credit for its pain program, and that the company’s cystic fibrosis franchise alone is worth $326 per share. Leerink’s Risinger is similarly undeterred by the risk. “It’s possible the stock could be down close to 20%” if all the trials fail, he says. “But the upside, if there’s success in those three trials, is quite significant.”
If approved, VX-548 would be an easy sell to treat chronic pain, where opioids are less effective and the potential for abuse is highest. But the first trials are focused on acute pain, a more challenging market because generic opioids are cheap and seen as less of a risk when given over a short duration. Still, Risinger says he’s certain that insurers will pay more for an opioid alternative. “I cannot imagine an insurance company or [pharmacy benefit manager] saying to a doctor or patient, we need you to fail the opioid first,” he says.
For investors, a bet placed now on the outcome of the pain trials, while risky, could be a smart one. The downside risk seems acceptable in the face of the size of the opportunity. Wall Street is appropriately skeptical of new pain medicines, but based on the early studies, Vertex’s drug seems to have a good shot at succeeding in the trials. If the drugs work, it will be good news for society—and for investors.
Corrections & Amplifications: Animal health company Zoetis sells two nerve growth factor inhibitors, one for dogs and one for cats. A previous version of this story mistakenly stated that Zoetis’s cat pain medicine is the only nerve growth factor inhibitor on the market.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
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