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Vertex's Shares Rally as a Rival's CF Candidate Disappoints

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Vertex Pharmaceuticals Incorporated’s (VRTX - Free Report) shares rallied more than 15% on Jun 29, following the announcement of lower-than-expected top-line results from Galapagos NV’s (GLPG - Free Report) phase II study on cystic fibrosis (“CF”) candidate, GLPG2737.

Galapagos is evaluating the candidate on top of Vertex’s CF drug, Orkambi (lumacaftor/ivacaftor), in the phase II PELICAN study in CF patients who are homozygous for the class II F508del mutation. The patients treated with GLPG2737, were treated with Orkambi for at least 12-weeks before the study and continued to receive it during the study. The company is developing GLPG2737 as a triple-combination regimen to treat CF patients.

Data from the study showed that GLPG2737 in combination with Orkambi improved ppFEV1, a measure of lung function, by 3.4% and reduced sweat chloride by 19.6 mmol/L from baseline versus placebo.

However, investors have found these data disappointing, which led to a decline in Galapagos’ share price last Friday. Vertex is also developing triple-combo regimens. Its two candidates – VX-659 and VX-445 – in combination with tezacaftor and ivacaftor have improved ppFEV1 by 13.3% and 13.8%, respectively, in early to mid-stage studies. The reduction in sweat chloride in patients was also materially higher than GLPG2737.

Moreover, both the candidates are in phase III stage of development.

The numbers and the stage shows that Vertex is a clear leader in the development process of triple-combo regimens for CF patients. The study results are also significantly higher, which can probably ward off competition for a longer term.

So far this year, Vertex’s shares have gained 13.4% against a decrease of 7.3% registered by the industry.

Galapagos is also developing triple combination regimens its own CF potentiator/correctors – GLPG2451, GLPG2222 and GLPG2737 – in a phase I study with interim data expected in the third quarter. The CF studies are being conducted in partnership with AbbVie (ABBV - Free Report) . However, AbbVie has opted not to proceed with the development of previously contemplated second triple combination therapy comprising GLPG3067, GLPG2222 and GLPG2737.

Meanwhile, Vertex announced in its press release that its third CF drug was approved for the treatment of patients aged 12 and older with two copies of the F508del mutation in the CFTR gene in Canada. The drug will available under the brand name of PrSYMDEKO.

Corbus Pharmaceuticals Holdings, Inc. (CRBP - Free Report) , a MA-based clinical-stage pharmaceutical company, is also developing its CF candidate, lenabasum, in a mid-stage study.

Vertex currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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