FDA rejects expanded use of Vertex cystic fibrosis drug

The U.S. Food and Drug Administration has denied the expanded use of Vertex Pharmaceutical Inc's bestseller, Kalydeco, in certain cystic fibrosis patients, the company said on Friday.

The regulator rejected the company's application for using the drug in cystic fibrosis patients aged 2 or older, who have one of 23 residual function mutations.

Vertex's shares fell nearly 6 percent to $86.34 in midday trading.

Analysts, however, said the news reflected a minor setback for Vertex, considering the company is recruiting the same patient population into one of its late-stage trials.

These trials should have results by mid-2017, which would suggest that the population could be included in the labeled indication 18-24 months from now if not immediately, Leerink Partners analysts said.

"This amounts to a deferral of approximately $300 million in revenue potential in the U.S., and $225 million in Europe; however, we had assumed slower and lower penetration of this population in both geographies," they added.

Cystic fibrosis is caused by defects in the CFTR gene that disrupts the function of the lungs and digestive system, producing a build-up of thick, sticky mucus leading to inflammation and recurrent bacterial infections.

Half of the people with cystic fibrosis live longer than 28 years, according to the World Health Organization.

Kalydeco, which brought in revenue of $632 million in 2015, is already approved to treat CF patients aged 2 and older with 10 different mutations in the CFTR gene.

The company was exploring the use of the drug in the group of 23 residual function mutations, also known to carry the CFTR protein.

Vertex said it had filed for an application based on studies of these mutations in preclincal trials and an exploratory mid-stage study.