UPDATED: Vertex shares slide as CF drug combo raises questions in Ph2

Fresh on the heels of its big win at the FDA with Incivek (telaprevir), Vertex ($VRTX) has pulled the curtain back partway on a closely watched mid-stage study of its cystic fibrosis program. Investigators report that a combination of experimental treatments--which includes VX-770--cleared the first hurdle in its two-part study, with the data demonstrating safety and tolerability and one of the tested dosages showing a promising effect on a key biomarker for the disease.

Investors weren't overly impressed by the efficacy data, though. Vertex shares slid more than 10 percent early today as analysts pondered the chances of the program's long-term success.

"While the data are a step in the right direction, the synergy is very modest and the data are by no means a 'game changer' like the VX-770 data," JPMorgan analyst Geoff Meacham noted. "Many on the Street were hoping for dramatic data."

Back in February, Vertex sparked a burst of enthusiasm among analysts with its announcement that VX-770 corrected a common genetic defect that causes CF and significantly improved lung function in patients. That data, said Vertex, was good enough to take to the FDA for an approval. One analyst estimated potential peak sales of $600 million, which would help Vertex in its transformation into a full-fledged biopharma operation.

In this Phase II study researchers combined VX-770 with VX-809, which is designed to escort a key protein to the surface of a cell, averting serious lung damage. The data upheld the combo's safety profile and one of the dosages significantly reduced levels of sweat chloride  among patients in one of the trial arms. Some analysts, though, had been looking for a better set of numbers, setting the stage for a drop in the biotech's share price. In the second part of the study investigators will look at the impact of longer dosing periods, looking for a more profound indicator of efficacy.

The promising data is also a win for the Cystic Fibrosis Foundation, which has contributed $75 million to Vertex over the past 13 years. "These data, while early, provide important new information about the potential to address the basic defect found among people with the most common form of CF," says CFF CEO Robert J. Beall, Ph.D.

- here's the Vertex release
- check out the Reuters story