By Michael Dabaie

Vertex Pharmaceuticals Inc. shares were down 19% to $219.14 in morning trading.

The company said after the market close Wednesday that the Phase 2 study of VX-814 in patients with alpha-1 antitrypsin deficiency was discontinued based upon safety and pharmacokinetic data. Alpha-1 antitrypsin deficiency is a disorder that can cause lung or liver disease.

"Based on the liver enzyme elevations observed, along with the determination that we would not be able to safely achieve targeted exposure levels with VX-814, we are discontinuing further development of this molecule," said Chief Medical Officer Carmen Bozic.

A Phase 2 trial of VX-864, which is structurally distinct from VX-814, was initiated in July 2020 and is ongoing.

"The discontinuation of VX-814 due to safety/PK issues is certainly a negative surprise and is likely to put meaningful pressure on VRTX shares, especially given management's consistently bullish commentary surrounding the program," Stifel said in an analyst note.

"We really don't know much about '864 and its differences to '814. Vertex notes that the compound is structurally distinct, but outside of that, it's very hard to say how the drug, and its risk profile, is or isn't different," Stifel said.

J.P. Morgan said in a note that the AATD program was widely thought to be the primary value driver for the company outside of cystic fibrosis.

"We acknowledge that the market may discount this next shot on goal; however, '864 is 'structurally distinct' from '814 and many times more potent, potentially offering a more optimal therapeutic window," J.P. Morgan said.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

10-15-20 1115ET