I expect there is more mutual/hedge fund buying of VRTX coming in the next week as we close out the third quarter and approach the NACF meeting on Oct 9 with new positive clinical data expected as well as the 809/770 NDA filing.
VRTX would be a costly acquisition, minimum cost 35- 40 billion, given the valuations finally being projected by analysts. Given the recent M&A activity going on in pharma, it's always a possibility. However, more likely, it's end of third quarter mutual and hedge fund asset reallocation after hearing the Vertex investor presentations mentioned in the 'Street Insider' interview above. I prefer the latter, as the VRTX pipeline represents even greater potential value over the next few years.
This quote from 'Street Insider' says its all:
Deutsche Bank analyst Robyn Karnauskas commented on today's strength in Vertex (NASDAQ: VRTX).
"We have been getting questions on vertex stock move today. We spoke to mgmt earlier and here is our take," said Karnauskas.
"Vertex has been on the road in Europe (with us), the Midwest, Boston, and in NY in the past two weeks.
"From speaking to mgmt, the key takeaways from these conversations have been 1) mgmt views their data as de-risked and 2) they are confident. Additionally, they have been discussing plans for the future. We view both points as highly positive and supportive of our thesis.
"This is very much in-line with our note earlier this week where we took up the target price because we believe that Vertex long-term platform story is unappreciated," she added
Wall Street finally crediting the potential of the VRTX pipeline. Congrats to all the patient and committed long term investors who saw this potential for so many years and will now see that potential become reality.
Recent VRTX stock price action, Ian Smith's confident response to the MS analyst's query at last week's MS healthcare investor conference about the pricing potential of 809/770 (the clinical trial data justifies a 'high value'), and the higher VRTX price targets announced in the past few days from GS and DB suggest the rollover data will be positive and a catalyst to moving the stock price higher along with the NDA filing and quick approval by the FDA given it's 'breakthrough drug' designation.
Any concern about the 809/770 combo efficacy may not hold after longer time? Ph3 results show that the improvement is less at the last time point, and slightly higher in the time point before.
Oct 9-11 is NACF annual meeting, with numerous Vertex clinical trial results being presented including interim results from 809/770 rollover study which will demonstrate sustained efficacy and safety data from the 1000+ patients in TRAFFIC and TRANSPORT, as well as reproducible response in the former placebo group of patients who now are receiving 809/770. Also the NDA flifing for 809/770 may be filed around the time of this meeting. Given the recently raised VRTX price targets by multiple influential analysts (GS, DB etc.), this should be an exciting few weeks for CF patients and VRTX investors.
rollover study using 809/770 in over 1000 patients will provide additional new safety and efficacy data supporting quick approval by regulators and pricing commensurate with reduction in hospitalizations and incidence of pulmonary infections and improvements in BMI and QOL questionaire scores.
Adam F. predicted this will double in 2014. So far it's going in that direction.
Sentiment: Strong Buy
before year end? A quick perusual of the last quarters earnings transcript did not provide any. Except perhaps some preliminary combo data with 661.
With today's announcement of Roche buying ITMN, and Merck's recent acquisition of IDIX, one could speculate that VRTX could be a potential acquisition target for a large pharms looking for a ready to market growth franchise like it's CF drugs.
Pfizer/Fold Rx, Sanofi/Genzyme, Abbvie/Galapagos, and Gilead all have active research programs in CF which are years behind Vertex, and all with a need to bolster their pipeline with ready to market breakthrough drugs. I suspect Wall Street analyst speculation on the next big takeover will be mentioning VRTX as a potential target once again on Monday.