Vertex surges on cystic fibrosis drug study data
Vertex surges on trial data for experimental cystic fibrosis regimen of Kalydeco and VX-661
NEW YORK (AP) -- Shares of Vertex Pharmaceuticals Inc. surged Friday after the company reported positive clinical trial results for a drug regimen designed to treat cystic fibrosis.
THE SPARK: Vertex said Thursday that patients who took Kalydeco, a drug that was approved in 2012, and an experimental drug called VX-661 had a greater improvement in lung function than patients who took a placebo. Vertex said it plans to run more studies of VX-661 and could advance it into late-stage clinical trials based on the results of those studies and discussions with regulators.
THE BIG PICTURE: Cystic fibrosis causes sticky mucus buildup in the lungs and other organs, leading to infections, digestive problems and usually early death. Patients with the disease have various genetic mutations that interfere with the flow of chloride and water across cell walls, causing buildup of internal mucus.
The Food and Drug Administration approved Kalydeco Jan. 31 to treat a rare form of the disease that affects just 1,200 people in the U.S., or 4 percent of the population with cystic fibrosis. It was the first drug approved to treat the root cause of the disease. Vertex reported $171.6 million in sales of the drug in 2012.
VX-661 is designed to treat the most common form of cystic fibrosis. Vertex is testing the drugs in combination to see if they improve results for patients with the more prevalent form of the disease.
THE ANALYSIS: Cowen & Co. analyst Phil Nadeau said he now believes there's a better chance that at least one of Vertex's experimental cystic fibrosis drug candidates will succeed in late-stage testing. He maintained a "Neutral" rating on the stock and said he thinks Vertex will have about $5 billion in total sales of cystic fibrosis drugs by 2017.
Citi Investment Research analyst Yaron Werber said the results were "impressive," and kept a "Buy" rating on the shares. He raised his price target to $110 per share from $63.
SHARE ACTION: Vertex stock climbed $32.73, or 62 percent, to $85.60 Friday. The shares are trading at their highest price since late 2000, and peaked at $85.90 earlier in the day.
