Unfortunately, having read extensively about Vertex and listened to hours of conferences and conference calls, I have come to the conclusion that no amount of research can answer the question of whether Vertex is a buy or a sell. The answer to that question depends upon future developments that no one can know ahead of time. I believe this to be true of many biotech companies, at least until they become large and established with steady streams of predictable revenues and earnings from multiple products on the market. Ongoing revenues from Incivek and approval of Kalydeco in April 2012 appear to already be priced into the stock. Therefore, the events that could move the stock price will include results of clinical trials with VX-222, VX-509, VX-809, Alios "nucs", actual revenues from Kalydeco after its approval, and progress by other companies on oral regimens using "nucs". I wish I could foresee how these things will turn out but it's anyone's guess. If one looks at the ownership of Vertex's stock, it is apparent that large institutions and mutual funds own more than 90% of the company. It would be nice if this represented a huge vote of confidence in the future prospects for the company. However, my opinion is that it amounts to these large investors just spreading their bets across the whole spectrum of biotech companies with the idea that a few of these companies will become the next Amgen, Celgene or Gilead. And for this brilliant approach to biotech investing these large institutions will collect countless millions in fees from their clientele. Having said all that, I still like the company and plan to hold onto my investment in Vertex.
Approval of Kalydeco is all but assured based on the completed clinical studies showing excellent efficacy in the G551 mutation and virtually no adverse events. The NDA also has priority review from the FDA for an unmet medical need. The stock price may see a small bump with the approval but nothing significant from Kalydeco until actual sales and revenues are reported. Of course, if Vertex reports positive data from the combination Kaydeco/VX-809 studies for the more common CF mutation that is applicable to 90% of CF patients, that would be a game changer and the stock could soar.