Vertex Ups Kalydeco Sales View As FDA Okays Label Expansion

Vertex Pharmaceuticals Incorporated’s (NASDAQ:VRTX) shares gained more than 1% on May 17, after the company announced that the FDA has approved its lead marketed drug, Kalydeco (ivacaftor) for expanded use.

We note that Kalydeco is already approved in the U.S., EU, Australia and Canada for the treatment of certain patients with CF who have specific mutations in their CFTR gene.

Kalydeco has now been approved for use in CF patients (ages 2 and older) who have one of 23 residual function mutations in the CF transmembrane conductance regulator (CFTR) gene. The label expansion into this indication provides the company access to more than 900 patients in the U.S.

Following the latest approval, the company increased its sales expectations for the drug to a range of $740–$770 million in 2017 from the prior expectation of $710–$730 million.

We remind investors that in February last year the FDA had issued a complete response letter (CRL) to the supplemental new drug application (sNDA) seeking approval to expand the use of Kalydeco in this patient population. The company later re-submitted the sNDA. With the latest approval, Kalydeco is now approved to treat people who have one of 33 mutations in the CFTR gene with CF (ages 2 and older).

Vertex’s shares have significantly outperformed the Zacks classified Medical-Biomed/Genetics industry so far this year. Shares of the company have gained 55.2% while the industry registered a decrease of 0.1%.



Coming back to the latest news, the approval was based on in vitro data and supported by more than five years of real-world clinical data that demonstrated strong safety and efficacy profile for Kalydeco in eligible patients.

The company is holding further talks with the FDA about approval of the candidate for other mutations, including one of five “splice” mutations. If approved, the candidate may be used for the treatment of more than 600 additional patients ages two and older who have such mutations.

Vertex has two CF drugs – Kalydeco & Orkambi – in its portfolio with blockbuster potential. Meanwhile, Vertex’s CF pipeline is quite strong with a broad portfolio of next-generation CF correctors. Investor focus will now be on the triple combination CF regimens, which are crucial for long-term growth at Vertex. Multiple triple combo data readouts in CF patients are expected in second half of 2017.

Zacks Rank & Key Picks

Vertex currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Aeglea BioTherapeutics (NASDAQ:AGLE) , VIVUS, Inc. (NASDAQ:VVUS) and MEI Pharma, Inc. (NASDAQ:MEIP) . While Aeglea carries a Zacks Rank #2 (Buy), VIVUS and MEI Pharma sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aeglea’s loss per share estimates narrowed from $3.64 to $2.48 for 2017, over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters with an average beat of 20.75%.

VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.

MEI Pharma’s posted positive earnings surprises in three of the four trailing quarters with an average beat of 66.56%. The company’s shares gained 16% so far this year.

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