Vertex says cystic fibrosis drugs shown to boost lung function

Thu May 1, 2014 7:15pm EDT

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(Reuters) - Vertex Pharmaceuticals Inc on Thursday said a combination of its cystic fibrosis drug Kalydeco and an experimental compound was shown to improve lung function in a mid-stage trial, sending its shares up nearly 8 percent.

The study found that treatment with Kalydeco and the experimental drug VX-661 for 28 days resulted in a 4.6 percentage point improvement in mean lung function for patients with two specific genetic mutations.

VX-661 would be the second drug from Vertex that works by treating the underlying cause of cystic fibrosis, a rare genetic disease that impairs the lungs and digestive system.

The disease is caused by defective or missing CF transmembrane conductane regulator (CFTR) proteins. Kalydeco is designed for patients with the most common CFTR mutation, while VX-661 aims to treat patients with a different mutation that affects protein function.

The Phase 2 trial involved patients with both mutations who were already taking Kalydeco.

"It is good data and some believe it does have an incremental positive read-through to the all-important Phase 3 data later this summer," said RBC Capital Markets analyst Michael Yee.

That trial will answer the question of whether a combination of Vertex drugs is effective in patients with two copies of the gene mutation not currently addressed by Kalydeco - a market representing about half of the 30,000 cystic fibrosis patients in the United States.

A positive result "would be transformative to the cystic fibrosis community," Yee said.

The most common side effects seen during the Phase 2 trial included cough, headache and upper respiratory tract infection.

But ISI Group analyst Mark Schoenebaum cautioned that Vertex has not disclosed results from the mid-stage trial for patients treated with a placebo.

Vertex also announced that first quarter sales of Kalydeco totaled $100 million, which fell short of the average analyst estimate of $107 million, according to Wells Fargo Securities.

Separately, The company reported an adjusted first quarter loss of $1.00 per share, also below the average analyst per-share loss estimate of 67 cents, according to Thomson Reuters I/B/E/S.

Vertex said it would discontinue research into treatments for hepatitis C, a market now dominated by sales of Gilead Sciences Inc's Sovaldi. Vertex late last year sold off its non-North America royalty rights to hepatitis C drug Incivek.

Shares of Vertex, which closed at $68.95 in regular Nasdaq trading, were up $5.30 at $74.25 after hours.

(Reporting By Deena Beasley; Editing by David Gregorio and Alden Bentley)

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