Sometimes good enough really is good enough. But only if you're treating the right patient population.

Vertex Pharmaceuticals (NASDAQ:VRTX) seems to be really good at picking them.

The biotech gets a passing grade for improving lung function in its clinical trials dubbed "TRAFFIC" and "TRANSPORT" testing the combination of Kalydeco and lumacaftor. And the company deserves a little extra credit for decreasing pulmonary exacerbations and helping cystic fibrosis patients gain weight. See Stephen Simpson's article for a full breakdown of the data.

Shares shot up 40% today, but it wasn't because the data was great. It wasn't. A mean absolute improvement in lung function of 2.6-4.0 percentage points is better than nothing, but it isn't anything to get excited about. By comparison, Kalydeco on its own produces a 10.6-12.5 percentage point change in mean absolute improvement in lung function compared to placebo in cystic fibrosis patients with a different mutation.

It's that "better than nothing" that's caused shares to climb higher today. There aren't any drugs to treat cystic fibrosis patients with the mutation that the patients in the trials have. There are a couple of antibiotics -- Gilead Sciences' (NASDAQ:GILD) Cayston and Novartis' (NYSE:NVS) Tobi -- that are used to treat patients when they get the inevitable bacterial infection in their lungs, but the drugs don't actually improve lung function. Gilead Sciences and Novartis could see their sales go down given the reduction in pulmonary exacerbations if Vertex's combination is approved.

And it will get approved
Again it comes down to the lack of treatments. The Food and Drug Administration is highly likely to approve the drug because it's better than placebo. Side effects seemed mild enough although there were a few cases of early signs of liver damage; they seemed to go away when patients went off the drug so the FDA should give the company a pass given the unmet need.

After the combination is approved, doctors will prescribe it because, again, there are no other options. A slight improvement is better than nothing. Fortunately the drug appears to work over the entire 24-week study, so it could be a drug that patients stay on for life.

Not like the last time we saw this story
This isn't the first time Vertex has hit a pot of gold. Its last foray into treating diseases with few options was in hepatitis C. The treatment at the time only cured about 50% of patients and had nasty side effects. Vertex's Incivek substantially improved the cure rate and decreased the time patients had to deal with the side effects from the existing drugs.

Two problems quickly arose though. Patients only needed to take one course of treatment, so to increase sales, Vertex had to find more and more new patients. And Gilead came along with a better treatment knocking sales down substantially.

Vertex won't have to worry about the treatment issues since its drugs don't cure cystic fibrosis patients, but investors should keep an eye on AbbVie and Galapagos that are developing competing cystic fibrosis drugs. Fortunately they're years away from getting drugs on the market, so Vertex has plenty of time to react.

In fact, Vertex is working on a new drug, VX-661, which might be used in combination with Kalydeco and lumacaftor. Let's hope the triple combination performs better than "good enough."

This company is going beyond good enough.
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Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences and Vertex Pharmaceuticals. The Motley Fool owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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