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Vertex Pharmaceuticals Inc. (VRTX - Analyst Report) recently announced that the Health Service Executive (HSE) in the Republic of Ireland has agreed to fund its cystic fibrosis (CF) drug Kalydeco (ivacaftor). Kalydeco is the first medicine to be approved for the treatment of the underlying cause of CF in patients (aged 6 years or above) who have at least one copy of the G551D mutation in the CF transmembrane conductance regulator (CFTR) gene.

Kalydeco is already approved in the US and the EU. While the US approval came in Jan 2012, the EU approval was granted in Jul 2012. Vertex Pharma reported Kalydeco sales of $171.6 million in 2012. The company expects Kalydeco revenues in the range of $280–$320 million in 2013.

Vertex Pharma is currently working on the EU launch of Kalydeco. Vertex expects first quarter 2013 Kalydeco revenues to be similar to the fourth quarter 2012 level. Kalydeco revenues should start growing from the second quarter with the completion of reimbursement discussions in EU countries.

Currently, Vertex Pharma has another marketed product in its portfolio: Incivek, which is approved for the treatment of hepatitis C virus (HCV). Vertex Pharma has an agreement with Johnson & Johnson (JNJ - Analyst Report) to commercialize Incivek outside the US.

Vertex Pharma reported during its fourth quarter conference call that it is now treating most of the eligible G551D patients in the US. The company is working on expanding Kalydeco’s label and is conducting monotherapy studies to expand the target population of CF patients. Vertex Pharma also remains on track to commence pivotal phase III development soon with Kalydeco plus VX-809 in delta 508 homozygous patients.

The company is also looking to strengthen its hepatitis C virus (HCV) portfolio. We expect investor focus to remain on pipeline progress at Vertex Pharma.

Vertex Pharma currently carries a Zacks Rank #3 (Hold). Pharma companies that currently look more attractive include Medivation Inc. (MDVN - Analyst Report) and Targacept, Inc. (TRGT - Snapshot Report). While Medivation carries a Zacks Rank #2 (Buy), Targacept carries a Zacks Rank #1 (Strong Buy).

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