Vertex shoots up 60% on positive trial results for Kalydeco and VX-661

US biotech firm Vertex Pharmaceuticals’ (Nasdaq: VRTX) shares rocketed 60% to $84.87 Friday morning after the company announced that, in a Phase II study, its cystic fibrosis drug Kalydeco (ivacaftor) combined with an experimental drug VX-661 significantly improved the lung function of patients in a mid-stage clinical trial.

Both Kalydeco and VX-661 are designed to treat the underlying cause of CF, a faulty gene and its protein product, known as CFTR. Kalydeco is currently approved in the US, Canada and the European Union for the treatment of cystic fibrosis patients (six years and older) who have at least one copy of the G551D mutation in the CFTR gene. Kalydeco, which delivered revenues of $171.6 million in 2012, is off to a strong start and should continue performing well in 2013, say analysts at Zacks Equity Research.

Analysts are rushing to upgrade and slap triple-digit price targets on Vertex because it now appears more likely that the company's cystic fibrosis drug franchise will prove effective for a large swath of the 70,000 people with the genetic lung disease worldwide. Peak sales could easily top $5-$6 billion, noted Adam Feurstein writing on TheStreet blog.