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Vertex Pharmaceuticals (NASDAQ: VRTX ) announced promising results on Thursday from a phase 2 study of experimental drug VX-661 and Kalydeco in treating specific forms of cystic fibrosis. Shares of the biotech soared by 58% in early trading on Friday on the news.
What it means
The mid-stage clinical trial found significant improvement in lung function among adult patients with cystic fibrosis who have two copies of the mutation of the cystic fibrosis transmembrane conductance regulator, or CFTR, gene, known as F508del. Cystic fibrosis is caused by mutations in the CFTR gene resulting in missing or defective CFTR protein. There are more than 1,800 of these mutations, with the F508del mutation being by far the most common.
In the study, adult patients who received 100 mg and 150 mg dosages of Vertex's VX-661 drug in combination with Kalydeco experienced lung function improvement 9% and 7.5%, respectively, better than patients taking placebo after 28 days. Vertex received Food and Drug Administration approval for Kalydeco last year in treating cystic fibrosis for another mutation known as G551D.
Results from the study showed that VX-661 was generally well-tolerated. Most adverse events weren't serious. Vertex officials stated that the adverse events observed were similar between the patients receiving VX-661 and those receiving placebo.
These results are promising because cystic fibrosis has few effective treatments available currently. Around 30,000 Americans suffer from cystic fibrosis, which currently has no cure. Many of these patients don't live past their 20s.
After this positive news from the phase 2 study, Vertex says that it will talk with regulatory officials about moving forward with additional studies. No surprise there.
Analysts scrambled to reflect the positive results in their views of the stock. Canaccord Genuity immediately upgraded Vertex from hold to buy. DeutscheBank bumped its price target up to $100 per share. Shares traded near $53 per share prior to the announcement of the study results.
The company already has two products on the market, hepatitis C drug Incivek and Kalydeco. It also has another experimental cystic fibrosis drug, VX-809, in a late-stage study. More success for VX-661 and VX-809 would position Vertex as something of a juggernaut in the cystic fibrosis market.
This latest development bodes extremely well for Vertex. However, anything can happen in future clinical studies. Safety issues could arise. Larger-scale studies could prove disappointing. At this point, though, Vertex looks poised to continue its winning ways.
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