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Vertex Pharmaceuticals Incorporated Message Board

  • play_tow play_tow Aug 11, 2010 11:56 AM Flag

    Blinders on Investors in VRTX

    Folks scratching their heads that shares arent soaring because of their effective HEPC treatment.

    The shares are prices at a market cap of over $7B.

    The expected market for HEPC treatments will be about $4 -6B in 2015.

    IF...IF, VRTX were the sole and only provider of treatment, then I would concur with these folks in saying that the shares are far too cheap.

    But, there are many competitors, and the barrier to entry in this treatment is washing away quickly.

    It is the recognition that many other players are coming into the HEPC market between 2010-2015, that is keeping the valuation "low" in VRTX shares.

    In fact, the shares may not see material increase over the haul owing to the constant intrusion of newer, cost effective, and equally effective life saving treatments.

    Look at the share price of GILD, and how its reacting to the expectation of HIV competition beyond 2015, even though it currently has over 80% of a huge market.

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    • If the market goes positive --> Vertex hits 48 a year (Market estimate) from now. (+33.00)
      If the Market goes down --> Vertex ends at 33. (10.00)

      It's a safe stock with an nice upside. Sure the market has factored in good news.

      I'm in Pharma company - If someone did have a blockbuster in the same space right now - 4 Years away. By then Vertex will be bringing in over 4 Billion with 20 to 40% returns.

    • Don't equate the price extremely bearish market is willing to pay to buy the shares with the fundamental considerations.

    • >>You cannot compare biotech stocks' capitalization with those of stocks with razor thin margins. <<

      I didn't see anyone do that. Not sure why you brought this up.

      The market is concerned that future competition will be an issue. That's what determines the stock price. You insisting it will not be an issue won't change the stock price. The market isn't buying your argument (at least not yet).

      If investors agreed with you right now, the stock price would be higher.

      It isn't like there is one product out there to watch. When they release poor results, Vertex is home free. It will be a continual process of many competitive products moving through trials and vertex will need to stay ahead of them all.

      Gilead did that with their HIV franchise for years and years.

    • 'Look at the share price of GILD, and how its reacting to the expectation of HIV competition beyond 2015, even though it currently has over 80% of a huge market'

      At your suggestion, I looked at the price of Gilead, but over the last 15 years, (not just the last few weeks). See the link below. I hope Vertex can do as well... four stock splits and the overall tremendous price appreciation since it's drugs first got approval. Competition is always a concern but in a large potential market, with best in class and first to market advantage, tremendous pent up demand for better treatment by hep C patients, and a deep pipeline of future products, Vertex may indeed be the next Gilead.

    • Next generation hep C treatments still need to go through Phase 2 and 3 approvals, with all the same uncertainties of efficacy, side effects and timing of regulatory approval that Vertex has already nearly completed. The fact telaprevir will be first to market with the best first generation drug and treat those patients eager for treatment will be a huge advantage. Patients treated and cured will only need treatment once. Patients with advanced liver disease, will not likely want to wait and chance dying of liver cancer or cirrhosis, or risk the need for a liver transplant. The valuation of Vertex will certainly rise with the success it has in the products sales after launch. Future potential competitors will also need to compete with Vertex own next generation products e.g. VX 222 etc. Nothing is proven that future competitors will be superior to Vertex products, and Vertex will likely be a leader in hep C for years to come.

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