Shares of Vertex Pharmaceuticals, Inc. [NASDAQ: VRTX] jumped 4.60% to an intraday high of $132 a share on Thursday after the company said the U.S. Food and Drug Administration (FDA) approved Orkambi (lumacaftor/ivacaftor) for the treatment of lung disease cystic fibrosis (CF), in people ages 12 and older with two copies of the F508del mutation, the most common genetic mutation causing cystic fibrosis. 

The F508del mutation, in which the amino acid phenylalanine in position 508 is missing, is found in about 90% of persons with some mutation in the cystic fibrosis transmembrane regulator (CFTR) gene, the defective protein that causes the disease. 

CF is a serious genetic disorder affecting the lungs and other organs that ultimately leads to an early death. It is caused by mutations in the CFTR gene that encodes for a protein that regulates ion (such as chloride) and water transport in the body. The defect in the chloride and water transport results in the formation of thick mucus that builds up in the lungs, digestive tract and other parts of the body, leading to severe respiratory and digestive problems, as well as other complications such as infections and diabetes.

Orkambi is a combination of lumacaftor, which is designed to increase the amount of mature protein at the cell surface by targeting the processing and trafficking defect of the F508del CFTR protein, and ivacaftor, which is designed to enhance the function of the CFTR protein once it reaches the cell surface. The company said that the two-drug therapy, Orkambi, will cost $259,000 per patient annually.

In January 2012, the FDA approved Vertex’s Kalydeco (ivacaftor) for the treatment of a rare form of cystic fibrosis in patients ages 6 years and older, who have the specific G551D mutation in the CFTR gene. 

Vertex announced its first-quarter 2015 revenues of $138.51 million compared to $118.45 million in 2014. Non-GAAP net loss was $0.62 per diluted share in 2015 compared to a loss of $0.65 per diluted share in 2014. Wall Street expected a net loss of $0.75 a share and revenue of $142.38 million for the quarter.

The 12-month target price for VRTX on Yahoo Finance is $140.10 per share. Vertex will report its second-quarter 2015 earnings on July 27-31. Analysts are expecting a loss of $0.61 per share, compared to a loss of $0.72 per share for the same period last year, on revenue of $149.91 million, up 8.30%.

Disclosure: No position in VRTX with no recommendation.