Vertex Pharmaceuticals Inc. (VRTX) Up on Positive Drug Trials
Shares of Cambridge, Massachusetts-based Vertex Pharmaceuticals (VRTX) were up sharply on Tuesday, amid a broadly lower market on Wall Street. Vertex's stock was up 40.41%, rising $26.92 to close at $93.53 per share, on volume of 25,236,837 shares. The company announced positive results for a drug it has formulated in treating cystic fibrosis. The successful trials make it more likely that the drug will be approved by regulators.
Founded in 1989, Vertex Pharmaceutical Inc. is engaged in discovering, developing, manufacturing and marketing small molecule drugs, centered on cystic fibrosis, infectious diseases, autoimmune diseases, cancer, neurological diseases, multiple sclerosis and other diseases. In 2013, the company had a net loss of $445 million, on total revenues of $1.21 billion, and employs 1,800 people. The company announced on Tuesday that successful completion of studies of its cystic fibrosis drug, Lumacaftor, raise the prospect that the medication will be approved by the US Food and Drug Administration (FDA), and that the product could develop into a profitable line for the company. The company hopes to release the drug in the second half of 2015. The company plans to file for approval of the drug with European drug regulators, in addition to the FDA. Lumacaftor met primary and secondary goals during two, 24 month Phase 3 drug trials when used in combination with another medication, Ivacaftor. Michael Yee of RBC Capital Markets indicated that current models show that the treatment could bring in $175,000 per regimen, well below that of other therapies. Cystic fibrosis is a rare genetic disease for which there is no cure. It is thought to be caused by defective or missing CFTR proteins at the cell surface that result from mutations in the CFTR gene. The defective function or absence of CFTR proteins in people with CF results in poor flow of salt and water into and out of the cell in a number of organs, including the lungs. In North America, Europe and Australia, there are more than 22,000 people ages 12 and older who have two copies of the isolated mutation. "The combination of lumacaftor and ivacaftor is the first regimen designed to address the underlying cause of CF (cystic fibrosis) for people with the most common form of the disease, and based on these data, we plan to move as fast as possible to submit applications for approval of this combination regimen in countries around the world," said Jeffrey Chodakewitz, M.D., Senior Vice President and Chief Medical Officer at Vertex. Following the announcement of the successful drug trials, Deutsche Bank (DB
) reiterated its Buy rating on the stock, and its target price of $103 per share. Wrote Deutsche Bank analyst Robyn Karnauskas, "Bottom line: We believe that this is the first step in Vertex platform treating entire cystic fibrosis population." Karnauskas believes that doctors will use the regimen for the high unmet need among the cystic fibrosis community. Other News About Vertex Pharmaceuticals Inc. Vertex licenses flu drug candidate to Janssen
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Published on Jun 25, 2014
By Kevin Mercadante