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What happened? 
Cystic fibrosis leader Vertex Pharmaceuticals (NASDAQ:VRTX) shared some good news with its investors this morning: The EU approved Vertex's Kalydeco for two new indications.

First up, Kalydeco can now be used in children age two to five who have one of nine gating mutations. Vertex estimates that roughly 125 patients in the EU meet this new indication. Next, the EU approved Kalydeco for use in patients who are older than 18 and have the R117H mutation. This labeling is estimated add another 350 patients to the mix.

All told this approval news should expand the addressable market for Kalydeco by roughly 475 new patients. The company intends to begin an arduous country by country reimbursement process right away.

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Does it matter?
While at first glance 475 new patients may not sound like much, when you consider that the current worldwide addressable market for Kalydeco is right around 3,400 patients, you can see that its actually a decent number. This approval should roughly expand the market for Kalydeco by 13%.

Given that Kalydeco is expected to generate between $605 million to $620 million in sales this year, every single label expansion the drug can grab is certainly helpful, so this approval could eventually be a modest needle mover for Vertex.

Perhaps equally important to the potential financial impact is that it widens Vertex's leads over companies trying to enter the space, such as Galapagos NV (NASDAQ:GLPG). Galapagos currently has an experimental cystic fibrosis medicine in phase 1 trials. However, given that cystic fibrosis has so many different mutations, even if Galapagos can move its drug down the regulatory pathway it will likely take years and many different approvals to catch up to Kalydeco. Still, Galapagos is a company to keep an eye on, as it's planning to start phase 2 trials later this quarter.

Of course, Vertex isn't sitting still after this approval either. The company is currently waiting on yet another potential label expansion for Kalydeco, this one in the United States. Vertex is pushing for Kalydeco to be used by patients as young as age two. If they get the green light it could add another 1,500 patients to its addressable market. That would most certainly be an immediate needle mover for Vertex, as Kalydeco already has broad reimbursement coverage stateside.

When you combine this approval with the immediate success of Orkambi, it's clear that Vertex has been firing on all cylinders recently, and I think its future continues to look very bright.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool recommends Vertex Pharmaceuticals. 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.