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Ahead of the Bell: Vertex Pharma shares slump

NEW YORK (AP) -- Shares of Vertex Pharmaceuticals Inc. skidded almost 9 percent in premarket trading Friday on safety concerns over one of its experimental hepatitis C drugs.

The Cambridge, Mass., company said Thursday that the Food and Drug Administration stopped some testing of its drug VX-135 because some patients who were treated with a larger dose of the drug in separate study had elevated levels of liver enzymes — a sign of possible side effects. The FDA's decision puts at least a temporary halt to testing of 200-milligram doses of VX-135, but Vertex can continue studying 100-milligram doses.

Vertex said it will send additional data to the FDA during the fourth quarter. The company said it recently finished treating patients in a study in Europe that compared the 100- and 200-milligram doses. It said no patients dropped out of the trial, no serious side effects were observed, and there were no liver or heart safety concerns.

Shares of Vertex fell $7.77, or 8.9 percent, to $79.85 in premarket trading.

Vertex makes the hepatitis C pill Incivek. Incivek was seen as a major new treatment when it was approved in 2011, but sales have fallen sharply because Incivek has been linked to a dangerous skin rash and doctors may be advising patients to wait until future drugs become available before beginning treatment.

Incivek is taken with ribavirin and interferon, which must be injected and can cause nausea, diarrhea and other unpleasant side effects. Several companies are studying treatment regimens that don't involve any intravenous drugs. VX-135 could be part of one such regimen.

Janney Capital markets analyst Kimberly Lee said one patient in the European study had a moderate to severe elevation in liver enzyme levels and two others had more mild increases. All of those cleared up after they stopped taking VX-135. Lee said Vertex expects the issue to be resolved by the end of the year. Lee said the company feels it's good news that there are no current safety concerns surrounding lower doses of the drug.

She kept a "Buy" rating on the shares with a price target of $88.

Vertex also announced the end of a partnership with British drugmaker GlaxoSmithKline PLC. The companies were studying a combination of VX-135 with a drug GlaxoSmithKline was developing. Vertex is also working with Bristol-Myers Squibb Co. on a regimen that combines VX-135 with Bristol-Myers' drug daclatasvir.