At the start of 2017, shares of Vertex Pharmaceuticals (NASDAQ: VRTX) could be grabbed for just shy of $75 each. At the start of trading on Wednesday, those savvy enough to have made the portfolio addition at that time are experiencing a triple digit return. Shares of VRTX have been catalyzed by results from early- and mid-stage trials of three different three-drug combinations for certain types of cystic fibrosis that destroyed Wall Street expectations.
Each combo regimen (dubbed VX-152, VX-659 and VX-440) is built upon Vertex’s tezacaftor-Kalydeco scaffold.
Vertex is evaluating the drug cocktails in patients with severe disease where therapeutic options are very limited, patients with one F508del mutation and one minimal function mutation (F508del/Min). By targeting the root of the disease, Vertex, a S&P 500 and Nasdaq-100 component, has the possibility of addressing a much larger patient population and dominate the CF treatment space.
The trial called for measuring lung function through ppFEV values. ppFEV is a standard defined by the amount of air a person can blow out in one second divided by the expected amount when taking into account certain covariates, like height, sex, etc.
Analysts were calling for the drug cocktails to improve lung function by as much as 2.5 percentage points compared to placebo, so when the Boston-based company said boosted a measure of lung function by 9.6 percentage points or more, the roof came off the stock.
Moreover, all three treatments were shown to generally be well tolerated with side effects limited to mild or moderate in severity.
The results have sparked conversations again that Vertex is a premier buyout candidate, as the economic and clinical benefits are tremendous if data from the early studies can be replicated in phase 3 research. Safe to say, sales could reach easily into the area of $5 billion and above if Vertex treatments can help tens of thousands of people being held hostage by cystic fibrosis having a grip on their lungs.
Vertex will now decide which of its next generation correctors and treatment regimens it wants to advance first into late-stage trials.
Shares have rocketed ahead about 24% to $164.00 per share in early trading on Wednesday, giving the company a market capitalization of over $40 billion, according to data on Yahoo Finance.
