Vertex Pharma Skyrockets on Cystic Fibrosis Drug Trial Results - Analyst Blog

Vertex Pharmaceuticals Incorporated VRTX was up a whopping 40.41% on Jun 24, 2014, after the company announced positive results from two phase III studies - TRAFFIC and TRANSPORT.

The studies evaluated fixed-dose combinations of VX-809 and Kalydeco in patients (above 12 years) suffering from cystic fibrosis CF who have two copies (homozygous) of the F508del mutation in the CFTR gene. The combination regimen met the primary endpoint in both the studies and showed statistically significant improvements in lung function (percent predicted forced expiratory volume in one second or ppFEV1).

In these studies, patients receiving the VX-809 and Kalydeco combination experienced mean absolute improvement in lung function of 2.6 to 4.0 percentage points.  Mean relative improvement ranged between 4.3% and 6.7%

Based on the positive results, Vertex Pharma plans to submit marketing applications in the U.S. and EU in the fourth quarter of 2014.

Why is this Data so Important for Vertex Pharma?

Vertex Pharma is currently focused on its CF franchise. The CF franchise, consisting of approved product Kalydeco and other pipeline candidates, is expected to drive long-term growth. The company has decided to no longer invest in the hepatitis C virus (HCV) pipeline. The termination of development activities related to the HCV pipeline is a strategic move by Vertex Pharma to cut its losses considering the fact that HCV treatment has advanced significantly with the introduction of new oral treatments.

As a result, Vertex is highly dependent on Kalydeco for growth. In an attempt to diversify and expand its patient population, Vertex Pharma has been developing fixed-dose combinations of Kalydeco and VX-809, which is the most advanced candidate at the company. We believe positive data from TRAFFIC and TRANSPORT has significantly boosted investor confidence.

Vertex Pharma carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Allergan AGN, Regeneron Pharmaceuticals, Inc. REGN and Bayer (BAYRY). While Allergan and Regeneron are Zacks Rank #1 (Strong Buy) stocks, Bayer holds a Zacks Rank #2 (Buy).