Updated with new information.

CAMBRIDGE, Mass. (

TheStreet

) --

Vertex Pharmaceuticals

(VRTX) - Get Report

received a very early U.S. approval for its cystic fibrosis drug Kalydeco Tuesday.

Kalydeco is the first and only drug to repair an underlying genetic cause of cystic fibrosis in people rather than merely treating the symptoms of the disease. Kalydeco, however, is only effective in about 4% of the estimated 30,000 cystic fibrosis patients with a specific protein mutation known as G551D.

The U.S. Food and Drug Administration reviewed Kalydeco in just three months and granted approval well ahead of an expected decision on April 18.

"Kalydeco is an excellent example of the promise of personalized medicine -- targeted drugs that treat patients with a specific genetic makeup,' said FDA Commissioner Margaret A. Hamburg, in a statement.

Vertex shares are up 7% to $37.36 in Tuesday afternoon trading.

The company said Kalydeco will begin shipping this week at an annual price of $294,000. Vertex can justify charging such a high price for the drug because it will be used to treat a very small number of patients.

Alexion Pharmaceuticals

(ALXN) - Get Report

,

Sanofi

(SNY) - Get Report

(through its Genzyme unit),

Shire

(SHPGY)

and

Biomarin Pharmaceuticals

(BMRN) - Get Report

have been very successful marketing expensive drugs as treatments for rare, so-called "orphan" diseases.

Approximately 2,400 cystic fibrosis patients in the U.S and Europe carry the G551D mutation, creating a $706 million market opportunity for Kalydeco. Approximately 400 of these patients are under the age of 6 and cannot be treated with Kalydeco today. About 40% of the patients have government-run insurance which mandates price discounts ranging of around 20%, said Vertex.

Kalydeco is already under review in Europe with an approval decision expected in the third quarter, Vertex said.

Cystic fibrosis is caused by genetic mutations that result in a malfunctioning or missing protein known as CFTR required for the regulation of sweat production, mucus and certain aspects of digestion. Defective or missing CFTR proteins in lung cells results in the formation of thick, sticky mucus that leads to restricted airflow, chronic infections and lung damage.

Cystic fibrosis patients with the G551D mutation have sufficient CFTR proteins on the surface of cells but the proteins are damaged and don't work correctly. Kalydeco, a pill taken twice a day, improves the function of the damaged CFTR proteins, thereby fixing the root cause of cystic fibrosis in these patients.

Kalydeco was approved based on data from two phase III studies in which cystic fibrosis patients with the G551D mutation showed

significant and sustained improvements in lung function

after treatment.

Vertex is studying Kalydeco in combination with another drug known as VX809, hoping to demonstrate similar improvements in lung function in patients with more prevalent cystic fibrosis mutations. Data from one such study is expected mid-year.

--Written by Adam Feuerstein in Boston.

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