Updated with stock price, analyst reaction. CAMBRIDGE, Mass. ( TheStreet) -- Vertex Pharmaceuticals ( VRTX) released preliminary data Monday showing two drugs -- the experimental VX-809 and currently marketed Kalydeco -- significantly improved lung function in patients with the most common genetic mutation causing cystic fibrosis. The interim analysis announced by Vertex is limited in scope, covering only about half of the cystic fibrosis patients who completed treatment in the phase II study to date, and then only those patients responding to treatment with VX-809 and Kalydeco compared to a placebo. The study results are also a bit confounding because improvements in lung function were not matched by significant reductions of salt in the sweat of patients treated with the two drugs compared to placebo. So-called sweat chloride is thought to be a laboratory marker for the underlying cause of cystic fibrosis. Complete results from the phase II study are expected later this summer. Nonetheless, Vertex said improvements in lung function observed so far were strong enough to warrant moving ahead with a pivotal phase III study of VX-809 and Kalydeco in cystic fibrosis patients with two copies (homozygous) of the F508del gene. The company will begin discussions soon with the FDA and European regulators about the specific designs for the phase III trial. Vertex stands to grow its nascent cystic fibrosis business substantially if a VX-809-Kalydeco combination therapy is ultimately approved since about half of the 70,000 cystic fibrosis patients worldwide carry two copies of the F508del gene. Kalydeco was approved in January as a single-drug therapy for about 4% of cystic fibrosis patients carrying the G551D genetic mutation. Vertex shares jumped 44% to $53.88 in early Monday trading. ISI Group analyst Mark Schoenebaum upgraded Vertex to buy with a $68-per-share price target, estimating the company's cystic fibrosis sales could reach $4 billion annually. Monday's results are based on an interim analysis of 37 homozygous F508del patients treated with three different dosing regimens of VX-809 and Kalydeco for 56 days compared to 11 patients with one or two copies of the F508del mutation who received placebo for 56 days. The entire study enrolled 108 patients. A statistically significant improvement in lung function was observed across the VX-809-Kalydeco treatment groups relative to baseline and compared to placebo, Vertex said. Of those patients treated with the two-drug therapy, 46% (17 of 37 patients) experienced an absolute improvement in lung function of 5% or more. A subset of 11 patients, or 30%, saw their lung function rise by at least 10%. By comparison, none of the 11 patients in the placebo arm of the study achieved a 5% improvement in lung function. Lung function was assessed by FEV1, which measures the amount of air a patient can forcibly exhale in one second. Patients' lung function was measured at the start of the trial and then compared to measurement taken after 56 days of treatment. FEV1 is the measure of clinical benefit accepted by FDA and European regulators for the approval of new cystic fibrosis drugs. Vertex did not disclose Monday the mean absolute improvement in lung function for all VX-809-Kalydeco patients compared to placebo, nor did the company break out lung function improvements by the three doses of VX-809 used in the phase II trial. However, patients in all three of the dose groups responded to treatment with VX-809 and Kalydeco, and the statistically significant improvement in lung function overall was not driven by a relatively small number of "super responders," said Eric Olson, Vertex's vice president for cystic fibrosis franchise, in an interview Sunday morning. Analysis was also conducted on a group of 21 cystic fibrosis patients with a single copy (heterozygous) of the F508del gene. Vertex did not disclose the results from this group, however, because not enough patients reached the end of the 56-day treatment period. Vertex officials are at a loss to explain why the combination of VX-809 and Kalydeco did not result in a statistically significant reduction in sweat chloride levels between Day 28 and Day 56 compared to placebo, one of two co-primary endpoints of the phase II study. The second primary endpoint was safety; the drugs were generally well tolerated, Vertex said. Investors watching and handicapping results of the phase II study expected the VX-809-Kalydeco combination to demonstrate a statistically significant, 15-20% reduction in sweat chloride levels with a corresponding, smaller, non-statistical trend toward better lung function. The interim results announced Monday turned these expectations on their head -- a statistically significant improvement in lung function but only a non-statistical trend towards lower sweat chloride. "I think we need to wait for the final study results but it seems as if we're still learning about sweat chloride as a biomarker in cystic fibrosis and whether it's truly correlated with lung function," said Vertex's Olson. Olson adds that from a regulatory perspective, improvements in lung function is what matters most, and it was the significant improvement in lung function observed which prompted Vertex to publicly disclose the interim results. Another intriguing finding from the interim analysis, sweat chloride levels were reduced by a statistically significant amount from the start of the trial through Day 28 when patients were treated with VX-809 alone. This raises the question of whether the addition of Kalydeco to the treatment of these patients is necessary or perhaps even detrimental. Olson believes patients more likely benefit from both drugs but Vertex plans to examine closely the final data from the study before making any judgments, Olson says. 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. Patients with the most common F508del mutation have missing or insufficient CFTR protein on the surface of cells. VX-809 is designed as a "corrector" drug that increases the amount of CFTR protein on the cell surface. Kalydeco, on the other hand, is a "potentiator" designed to improve the function of the damaged CFTR proteins. Kalydeco was approved in January for cystic fibrosis patients with the G551D mutation. These patients have sufficient CFTR proteins on the surface of cells but the proteins are damaged and don't work correctly. The phase II combination study treated cystic fibrosis patients with the F508del mutation with four weeks of VX-809 alone to increase the amount of CFTR protein, followed by another four weeks of VX-809 combined with Kalydeco to improve the function of the new CFTR protein. Three doses of VX-809 were studied along with a higher dose of Kalydeco. --Written by Adam Feuerstein in Boston. >To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: firstname.lastname@example.org. Follow TheStreet on Twitter and become a fan on Facebook.