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Like many other chronic progressive intractable diseases, Cystic Fibrosis (CF) pathology is about misfolding of the transmembrane conductance regulator (CFTR) protein as a result of CFTR gene mutations. The malfunctioning CFTR protein loses its trafficking capability and fails to reach the cell membrane, resulting in the accumulation of thick, sticky mucus that plugs the airways and chokes the pancreas. The symptoms are chronic coughing, difficulty breathing, malabsorption of food and nutrients from the intestine, inability to gain weight, diarrhea, or bulky, foul-smelling, greasy stools, or constipation. The disease is debilitating and affects about 100,000 babies, children and adults worldwide. The presence of salty skin confirms the diagnosis of the disease.

No drug on the market addresses the root-cause of cystic fibrosis, i.e., the CFTR gene mutations or the misfolded CFTR protein. They mostly take care of the symptoms and complications of the disease. Many hypothesis have recently emerged, suggesting various molecules expected to regulate the misfolded protein, enabling it to regain its trafficking capability and reach the cell membrane so it can induce its action. Other suggested approaches aim at boosting the actions of the misfolded protein. Of all these approaches, the most advanced drugs that aim at the root-cause of cystic fibrosis are those developed by Vertex (NASDAQ:VRTX).

Vertex developed two small molecule drugs that deal with the malfunctioning CFTR protein. VX-770, also called the potentiator, targets the malfunctioning protein caused by the G551D mutation. This mutation does not disable the protein's trafficking capability, but suppresses its action as a chloride channel or as a regulator of epithelial surface fluid secretion in the respiratory, gastrointestinal tracts, reproductive system and other tissues. Vertex' second cystic fibrosis drug VX-809 called the corrector targets the misfolded CFTR protein expressed by the DF508 mutation. The malfunctioning CFTR protein in this case lacks trafficking capability, becomes trapped in the endoplasmic reticulum (ER) and degrades before it reaches the cell membranes where cFTR protein induces its normal action as a chloride channel or a regulator of epithelial surface fluid secretion, which prevents the mucus from thickening and clogging the airways and other organs.

On Thursday, Vertex announced data from part 1 of Phase II interim study of a combination of its two drugs VX-770 and VX-809 on patients who have two copies of F508del mutation. The trials met the safety and tolerability endpoints and confirmed the success of VX-803 in moving the CFTR protein into the cells membranes. It also validates VX-770 action of boosting the function of the CFTR protein as measured by the statistically significant decrease of sweat chloride after VX-770 was added to VX-809. There were no serious or concerning side effects.

It looks as if investors might have missed the meaning of these trials and the impact of the results on the future evolution in restoring the functions of misfolding of proteins. VRTX experienced a selloff premeditated by negative investors and analysts who looked determined to hate the results before their announcement. Premeditation was obvious as VRTX had experienced mini-selloffs during the whole week that preceded the announcement of the results. The combination, no doubt, has realized the trials' objectives, validating the drugs' effects on restoring the misfolded proteins' normal functions.

To see the complete results Click HERE

On Friday, i.e., the next day of the VRTX' selloff, Vertex announced data from three Phase III trials with VX-770 as monotherapy on various age groups. The results demonstrated rapid and significant improvements in lung function (FEV1), which were sustained through 48 weeks compared to those treated with a placebo. This is considered breakthrough news; improving lung function is vitally important in the treatment of cystic fibrosis, as the disease is not confined to one organ but affects several organs. Additionally, the data from VX-770 trials are the first to show that treating the underlying cause of cystic fibrosis may have profound effects on the disease, even among people who have been living with it for decades. The remarkable reductions in sweat chloride observed in this study support the concept that VX-770 improves CFTR function, thereby addressing the fundamental defect that leads to CF. VRTX recuperated a fraction of its previous day losses.

To read the complete results click HERE

Prohost Comments: A study designed to demonstrate that a drug is capable of regulating a defective protein that causes intractable disease is called advancement, not a failure. Under normal circumstances, a developer of a big-deal drug would be hailed and the value of the developing firm boosted. But, just as time disappears in space, logic seems to be absent from Wall Street. The firm that demonstrated its drugs have, indeed, regulated a defective protein has been compensated by a sell-off of its stock.

With these irrational phenomena haunting us day after day without deterrence, our mind developed an antidote to the frustration that used to eat our heart out each time we encountered such acts. When Exelixis (NASDAQ:EXEL) lost 20% of its value on data demonstrating that its drug cabozantinib has successfully eliminated the bone metastasis and pain in patients with advanced prostate cancer, we announced our appreciation to those who instigated the stock sell-off, as they offered us the opportunity to accumulate it at a 20% discount. The problem, though, is that not all serious investors have money to keep accumulating and benefiting from such weird patterns created by self-centered greedy investors. Before the ASCO meeting this year, we had to warn investors that during this highly regarded International gathering, most oncology stocks experience sell-offs. Our prophecy materialized in spite of the fact that ASCO 2011 was a great success, revealing the highest number of breakthrough oncology drugs.

We are long Vertex.

Disclosure: None

Source: Vertex: First Drugs Ever to Target Root Cause of Cystic Fibrosis