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Vertex Pharmaceuticals Incorporated (VRTX - Analyst Report) recently received regulatory approval in Australia for its cystic fibrosis (CF) drug, Kalydeco (ivacaftor). The Therapeutic Goods Administration (TGA) of Australia approved the drug for CF patients (≥ 6 years of age) who have at least one copy of the G551D mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene.

We note that Kalydeco is already approved in the US, EU and Canada. Kalydeco, which delivered revenues of $171.6 million in 2012, is off to a strong start and should continue performing well in 2013.

Vertex Pharma reported rapid uptake in a major part of eligible patients in the US in the first quarter of 2013. While US sales were $50 million, ex-US sales were about $12 million in the first quarter of 2013. Sales should benefit from reimbursement in additional European countries and launch in new markets.

We note that Vertex Pharma is also working on expanding Kalydeco’s label. Kalydeco is currently in three phase III studies in which it is being evaluated as a monotherapy in CF patients (≥ 6 years of age) who have at least one copy of the R117H mutation, in CF patients (≥ 6 years of age) who have at least one non-G551D CFTR gating mutation and in children with CF (2 to 5 years old) who have a gating mutation.

Vertex Pharma is also studying Kalydeco in combination with pipeline candidates, VX-809 and VX-661.

With Vertex Pharma working on expanding Kalydeco’s label and strengthening its hepatitis C virus (HCV) portfolio, we expect investor focus to remain on pipeline progress. The successful development of the Kalydeco and VX-809 combination would expand the market for Kalydeco significantly.

Vertex Pharma currently carries a Zacks Rank #3 (Hold). Companies that currently look well-positioned include Alnylam Pharmaceuticals, Inc. (ALNY - Analyst Report), Biogen Idec (BIIB - Analyst Report) and Cytori Therapeutics, Inc. (CYTX - Snapshot Report). All three are Zacks Rank #1 (Strong Buy) stocks.
 

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