Vertex shares plunged 10 per cent yesterday after a misunderstanding with its data analysis vendor led to it overstating results.
On May 7 shares in Vertex jumped by 50 per cent after it posted positive interim Phase II data for its cystic fibrosis therapy. Yesterday, however, the biotech made an embarrassing climb down when it said a mix up with its data analysis service provider led to it overstating the effect on patients.
“This mistake is very disappointing, it’s unacceptable to us. It’s not how we do business at Vertex. This was a very unfortunate misinterpretation between us and an outside vendor”, Jeffrey Leiden, CEO of Vertex, told investors in a conference call yesterday.
Vertex assumed the data its service provider sent was absolute. The data was actually relative. By reporting the relative data as absolute Vertex overstated the proportion of patients who achieved a five percentage point improvement in lung function by almost one-third.
While the data is still positive and Vertex plans to enter Phase III trials with the treatment, the error is an embarrassment, particularly for a biotech that has built its reputation on quality, cutting-edge science.
The Massachusetts-headquartered biotech took its share of the blame, instead of trying to pin the debacle on its service provider, and committed to improving communication with its data analysis vendor. “We’re taking steps to fix it and make sure it doesn’t happen again”, Leiden said.
Outsourcing-Pharma asked Vertex if it will continue to work with the data analysis service provider but the biotech declined to give further information. “We are not providing any additional details at this time”, Dawn Kalmar, director of product communications at Vertex, told Outsourcing-Pharma.
Since sharing interim results on May 7 the stock price of Vertex has increased by more than 70 per cent. After posting its correction yesterday shares in Vertex plunged by 20 per cent in pre-market trading and eventually closed down 11 per cent.