Vertex ‘Correction’ to Cystic Fibrosis Destroys Billions in Value (VRTX)

Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) was very close to 52-week highs of late, but that will not be the case now.  The company updated information that is being called a correction about lung function from its Phase 2 trial of the company’s VX-809 and KALYDECO in cystic fibrosis patients.

The new and corrected data indicated that only 35% of patients experienced an absolute improvement in their lung function of at least 5% versus the previously reported statistic of 46% of patients experiencing absolute improvement in lung function.  Vertex also said that only  19% had at least a 10% improvement when they were treated with VX-809 and KALYDECO versus a prior report that 30% saw at least 10% improvement.  Those who were treated with VX-809 and KALYDECO experienced an 8.5% mean absolute improvement in lung function versus patients treated with placebo.

Apparently this correction is due to a misinterpretation of third party vendor data. Vertex closed at $64.85 on Friday against a 52-week trading range of $26.50 to $66.10.  Shares are trading down 18% at $53.01 so far this morning and about 150,000 shares have already traded hands with more than 90 minutes until the market opens.

To let you know just what this means in market value, Vertex had a market cap of $13.7 billion as of Friday’s close.  If the drop remains static then almost $2.5 billion in market value will have been destroyed by this “correction” to the data.

JON C. OGG