Vertex Pharmaceuticals Soars on Promising Drug Data
Shares of mid-cap biotechnology company Vertex Pharmaceuticals (NASDAQ: VRTX) rallied the most since it went public in 1991 on Monday. The company announced interim results from its phase 2 combination study of Kalydeco + VX809 in cystic fibrosis. The data revealed that the treatment demonstrated a statistically significant improvement in lung function. The promising data has sent shares of VRTX skyward, and at last check the stock was trading up 46% to $54.53 and trending up on an intra-day basis. Analysts at JP Morgan provided additional color on the data in a Monday morning report.
They wrote, "A FEV1 improvement of at least 5% was observed in 46% of patients and an improvement of at least 10% was observed in 30% of patients. Expectations were certainly not assuming an FEV-1 benefit, so obviously these subgroups performed well. Reductions in sweat chloride, the key objective of the study were not statistically significant. As such, we view the results as mixed with significant improvement in FEV1 for a subset of patients. We wouldn't be chasing VRTX shares here on the back of the data, but either way, Vertex anticipates initiating a pivotal study of this combination in CF patients with 2 copies of F508del following final discussion with regulators."
The analysts reiterated their Neutral rating on the stock based on their view that the sweat chloride data was mixed. Looking ahead, additional clinical trials of this drug combination could provide meaningful catalysts for VRTX. Despite today's huge move, VRTX is still trading below its 52-week high of $58.87, which was put in last May. This area may be a natural price target for the stock in the coming days and traders will want to see if VRTX can convincingly break this level to the upside.
In any event, today's data puts the company squarely on the radar of the investing community and the name should continue to be active this week. Volume has exploded with around 25 million VRTX shares already trading hands on the session compared to a 3-month daily average of 2.4 million. If the stock can continue to move higher in the coming days on significantly elevated volume, it would be an unmistakable bullish signal in light of today's news.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.