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UPDATED: Vertex skyrockets on positive Ph2 combo study in cystic fibrosis

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Vertex Pharmaceuticals ($VRTX) jolted Wall Street with a fresh batch of midstage data on one of its combo therapies against cystic fibrosis. The biotech powerhouse tested its approved CF drug Kalydeco in combination with VX-661 in patients with the most common mutation of the rare lung disease, showing that the two highest dose groups showed statistically significant improvements in lung function over placebo.

Vertex shares quickly spiked more than 50% to around $80 per share in after-hours trading on Thursday, as the Cambridge, MA-based company provided more data to support its multi-pronged plan to provide disease-modifying therapies for most CF patients. The rally spilled into Friday morning, and as of 11:40 am ET Vertex shares were up nearly 59% to $84, an increase of about $31 from the previous day's close.

The Phase II trial tested four doses (10, 30, 100 and 150 mg) of VX-661, a CFTR corrector compound, taken once a day in combination with 150 mg of Kalydeco taken twice a day for 28 days. Patients on the 100 and 150 mg doses of 661 in combination with Kalydeco scored mean relative improvements in the FEV1 lung function test of 9% and 7.5%, respectively, at day 28 compared with those on placebo. The study also found meaningful decreases in sweat chloride--an important measure of efficacy in CF--while the adverse events were most often pulmonary and rates were similar between those on placebo and patients on Vertex's drugs. Vertex says that it plans to conduct more Phase II tests of the 661 combo to figure out whether pivotal trials are in order.

The trial is another victory for Vertex chief scientist Peter Mueller and his R&D crew as they push a host of combo therapies through development. The combinations open Vertex to a much larger percentage of the 30,000 or so CF patients in the U.S. than solo treatment with Kalydeco, which the FDA approved last year for only about 4% of patients with a specific mutation. By comparison, nearly half of CF patients in the world carry two copies of the F508del mutation found in patients included in the study reported today. Over at The Street, Adam Feuerstein wrote that Vertex's CF franchise could hit a peak of $5 billion to $6 billion in annual sales.

The FDA early this year designated Kalydeco and Vertex's first CFTR corrector molecule, VX-809, as "Breakthrough" therapies, giving the company an inside track to quickly deliver an application for approval next year. The company is now testing those two compounds in a pair of Phase III studies in patients with two copies of the F508del mutation of the CFTR gene.

"This first study of VX-661 and ivacaftor provides further validation of the strategy of combining a corrector and potentiator to improve lung function in people with the most common type of cystic fibrosis," Mueller said in a statement. "With these data and the recent initiation of a Phase 3 program for a combination of our lead CFTR corrector VX-809 with ivacaftor (Kalydeco), we are making significant progress toward our goal to help many more people with CF."

With the promise of Vertex's CF portfolio, the company has wiped away a lot of the disappointment from slowing Incivek sales, which dropped 51% to $222.8 million in the fourth quarter of 2012. Unlike in the hepatitis C arena, Vertex has the leading pipeline for new CF therapies.

- here's Vertex's release
- check out The Street's item
- see Reuters' update

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Editor's Note: Updated with recent stock quote and peak sales estimate.