(Reuters) - Shares of Vertex Pharmaceuticals Inc soared to touch a record high on Wednesday, a day after the drugmaker revealed data on its triple combinations of cystic fibrosis (CF) treatments that wowed both analysts and investors.
Vertex’s shares climbed 26 percent to $165.97, adding nearly $8 billion to its market valuation. They had earlier touched a life high of $167.00.
Analysts said the data exceeded expectations, raised the bar for competitors and positioned the treatments to help up to 90 percent of patients with the life-shortening lung disease.
Vertex already sells two therapies that can treat up to 40 percent of CF patients. Kalydeco and Orkambi brought in sales of $481 million in the first quarter.
“Not only does this data set up well to reach a large majority of the CF patient population, it greatly increases the competitive hurdle while also enhancing the scarcity value of the company,” J.P. Morgan analyst Cory Kasimov said in a note.
The data on Tuesday showed three different triple combinations of CF treatments significantly improving patient lung function in clinical trials.
CF is a rare, life-shortening genetic disease affecting about 75,000 people in North America, Europe and Australia that causes progressive lung damage and loss of lung function.
“The triple combo results came in an order of magnitude better than we, or really anyone, expected,” Baird analyst Brian Skorney noted.
At least three brokerages raised their ratings on Vertex’s stock: Barclays to “overweight”, Janney to “buy” and Raymond James to “outperform”.
Analysts are bullish on the stock with 21 out of 25 covering Vertex rating it “buy” or higher and the rest “hold”.
Eight brokerages increased their price target on Vertex. The drugmaker’s median price target is $180, up from $129.50 in June.
Shares of Galapagos NV, which is developing a rival CF treatment with AbbVie Inc, slipped about 4.5 percent.
“Galapagos/AbbVie’s planned path to the triple combo is not impossible, but faces a much higher hurdle as compared with Vertex’s triple combo strategy,” William Blair analyst Katherine Xu said in a note.
Including Wednesday’s gain, Vertex shares have more than doubled this year.
Reporting by Tamara Mathias in Bengaluru; Editing by Martina D'Couto