Vertex (VRTX): H.C. Wainwright Comments on VX-661 Data

May 2, 2014 9:33 AM EDT
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H.C. Wainwright maintained a Buy rating on Vertex (NASDAQ: VRTX) with a price target of $105.00. Comments follow data on VX-661.

Analyst Andrew S. Fein said, "Yesterday, VRTX took the final step in its transformation into a CF company by simultaneously eliminating the vestigial VX-135 and by reporting additional positive clinical data on VX-661, which over the course of the last 12 months has converted from a perceived backburner compound to an experimentally effective agent as well as a strong pipeline buffer. In this 4-week study of G551D/F508del patients (N=18), the addition of VX-661 to ongoing Kalydeco therapy produced significant improvements in relative FEV1 (+7.3%, p=0.012) and sweat chloride (-7.02mmol/L, p=0.053). Despite the small relative size of the study, the lowerthan- expected pulmonary baseline of the study patients, and the unavailability of placebo-corrected endpoint data, we believe that on the tail of last year’s demonstrated single agent efficacy these results paint the picture of an effective agent, with consistent mechanistic and physiologic effects (sweat chloride & PFTs)."

"As a reminder, to further complement these data on efficacy and especially safety, an additional 12-week study of VX-661+Kalydeco in homozygous F508del patients is expected to read out in 2H14. Of note, yesterday’s data show that it is possible to correct a single 508del allele on top of baseline ivacaftor treatment for G551D, while providing additional clinical benefit in doing so. While the potential commercial implications of this finding are complex (60% of G551D patients carry 508del, but is there enough pricing elasticity to welcome an add-on to Kalydeco?), we believe that the true value of having these results in the marketplace lies in that it continues to improve the risk/reward of owning VRTX shares into the pivotal VX-809 data this summer. As VX-661 becomes a more “differentiated” and stronger asset, so does the thesis of a modest downside to a VX-809 trial miss. Overall, we remain positive on the likelihood of success of VX-809 itself, as well as on the risk-reward of a long position into TRAFFIC and TRANSPORT readout," he added.

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Shares of Vertex closed at $68.95 yesterday.

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