Vertex Pharmaceuticals is making a significant move to diversify its portfolio and pipeline with a landmark acquisition valued at $10 billion. The company has announced its plans to acquire Crinetics Pharmaceuticals, a firm known for its recently launched drug and a late-stage clinical asset, both of which hold substantial sales potential across multiple indications.
Based in Boston, Vertex is expanding into endocrinology, as highlighted by Reshma Kewalramani, the company’s CEO, during a conference call on Monday. The two primary assets from Crinetics, along with its pipeline of rare disease treatments, are projected to reach peak sales of $5 billion. This announcement follows the recent presentation of long-term data for Palsonify, Crinetics’ FDA-approved treatment for acromegaly, a rare endocrine disorder.
Kewalramani noted, “The timing (of the deal) is now because the company is available now, the data is available now, and we believe we are the right group to take Palsonify, build on what the Crinetics team has done, and bring it to the world.”
Acromegaly is characterized by elevated growth hormone levels, resulting in joint pain, enlarged hands and feet, and various cardiac and metabolic complications. It is estimated that around 20,000 individuals in the United States suffer from this condition. In September, the FDA approved Palsonify, an oral small molecule designed to bind to and activate a receptor, subsequently suppressing growth hormone levels.
Vertex is also optimistic about Atumelnant, a drug currently in clinical development for congenital adrenal hyperplasia (CAH). This hereditary condition affects the adrenal glands’ capacity to produce cortisol, leading to elevated levels of androgens and adrenocorticotropic hormone (ACTH). Atumelnant aims to block ACTH and is under investigation to help patients manage their CAH with glucocorticoid doses closer to normal physiological levels, which Kewalramani describes as “the Holy Grail of what doctors and patients expect” from CAH medication.
Current standard treatment for CAH involves high doses of glucocorticoids, synthetic versions of cortisol, which can lead to numerous side effects. Vertex cited phase 2 results showing that Atumelnant allowed for more physiologically appropriate dosages while normalizing androgen levels. A phase 3 study for CAH is currently ongoing, and the drug is also being evaluated for treating another rare endocrine disorder, ACTH-dependent Cushing’s syndrome.
In the competitive landscape for treating acromegaly, Crinetics’ therapies are expected to offer advantages over existing marketed products from Novartis and Ipsen, which face generic competition despite their success. While a competitor offers a maintenance pill for acromegaly, it is only approved for patients responding to injectable treatments. Palsonify is positioned as a first-line oral treatment for acromegaly, providing easier dosage than injectables.
Meanwhile, CAH is a less crowded indication with only one FDA-approved therapy currently on the market, Neurocrine Biosciences’ Crenessity, which targets a pituitary gland mechanism. Kewalramani emphasized that Crinetics’ drug distinguishes itself by improving androgen levels and reducing glucocorticoid dosages for effective CAH management.
Vertex categorizes its primary therapeutic areas as “pillars,” with cystic fibrosis remaining the most critical and constituting a significant portion of the company’s projected $11.9 billion in revenue for 2025. Vertex has made strides to diversify beyond cystic fibrosis by establishing pain and renal pillars, the latter of which was bolstered by the $4.9 billion acquisition of Alpine Immune Sciences last year—then Vertex’s largest acquisition—aimed at developing a treatment for various kidney disorders.
Crinetics launched Palsonify, its inaugural commercial product, last October and reported $10.3 million in product sales for the first quarter of this year. The European Medicines Agency has also approved Palsonify, which is under review by other global regulatory bodies.
When Crinetics went public in 2018, its shares were priced at $17 each. As part of this acquisition, Vertex will pay $85 in cash for each Crinetics share, reflecting a 102% premium over the biotech’s Monday closing stock price. Charlie Wagner, Vertex’s Chief Operating Officer and Chief Financial Officer, expressed confidence in the acquisition’s value, stating it aligns with the sector’s norms for commercial or near-commercial assets.
“We believe this combination makes Vertex a stronger and more diversified company with a long growth runway while staying true to the strategy that has led to our success,” Wagner stated.
Analysts from William Blair described the acquisition price as somewhat steep but indicated that it could be reasonable if acquired assets meet Vertex’s sales expectations. They noted that this acquisition represents the first instance they have heard of potential multi-billion dollar sales projections for Atumelnant—an optimistic assessment when compared to Neurocrine’s product. A significant portion of the projected $5 billion in peak sales is anticipated to derive from Atumelnant, which carries higher risks due to its current developmental stage.
Vertex plans to finance the acquisition of Crinetics through its available cash and a committed bridge financing of $4.5 billion. The deal is subject to approval from Crinetics’ regulators and shareholders, with both companies aiming to finalize the transaction within the current quarter.
Photo: David L. Ryan/The Boston Globe, via Getty Images
