Vertex Motors Down Cystic Fibrosis Highway

CAMBRIDGE, Mass. ( TheStreet) -- Back in June, I used the simple roadmap (above) to explain how Vertex Pharmaceuticals ( VRTX) will one day come to dominate cystic fibrosis therapy and generate annual sales of $10 billion with little to no competition.

On Monday, Vertex announced positive results from the first of several follow-on phase III studies aimed at expanding treatment with Kalydeco as a stand-alone therapy. This new use for Kalydeco encompasses about 400 cystic fibrosis patients with a non-G551D gating mutation. If you're keeping track using the roadmap, these patients are included in the smaller blue box.

Four hundred new cystic fibrosis patients translates into approximately $100 million in additional revenue for Vertex, according to Baird analyst Brian Skorney, so it's a relatively small step in the overall expansion of Vertex's cystic fibrosis business.

Vertex intends to file for Kalydeco label expansion for the non-G551D gating mutation in the second half of year in the U.S. and Europe. In the U.S., FDA has already granted Kalydeco breakthrough therapy designation, so the review and approval should happen quickly.

Next up for Vertex is a phase III study of Kalydeco monotherapy in cystic fibrosis patients with an R117H mutation. Results are expected in the second half of this year and if positive, will lead to another regulatory expansion filing in early 2014.

The R117H mutation is found in about 3 percent of cystic fibrosis patients worldwide, according to Vertex.

Another study of Kalydeco in cystic fibrosis patients with "residual function" mutations is ongoing with results expected in the first half of next year.

All of these Kalydeco monotherapy expansion studies combined represent about 5,000 new cystic fibrosis patients in that smaller blue box on the roadmap.

After that, the next important destination is the combination studies of Kalydeco and VX-809. Two large phase III studies, dubbed TRAFFIC and TRANSPORT, in patients with the homozygous 508del mutation will have results in the first half of next year. There are about 30,000 cystic fibrosis patients in the larger blue box, so it's a very important milestone for Vertex.

Vertex reported $99 million in Kalydeco sales in the second quarter, well above Street consensus. The company also raised guidance on Kalydeco sales for the remainder of the year.

--Written by Adam Feuerstein in Boston.

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