Vertex Pharmaceuticals (VRTX) is the $75 billion champion of cystic fibrosis (CF) who is expected to grow sales 37% this year to $5.7 billion -- after a 37% topline advance last year.
Since 2012, Vertex has developed a suite of drug treatments for CF, including the "triple threat" combo Trikafta, which was approved by the FDA in October 2019.
Cystic fibrosis is a hereditary disease that affects the lungs and digestive system. The body produces thick and sticky mucus that can clog the lungs and obstruct the pancreas. CF can be life-threatening, and people with the condition tend to have a shorter-than-normal life span, with many adults not making it to their 30th birthday.
Vertex’s lead marketed products are Trikafta (elexacaftor/tezacaftor/ivacaftor and ivacaftor), Symdeko/Symkevi (tezacaftor in combination with ivacaftor), Orkambi (lumacaftor in combination with ivacaftor) and Kalydeco (ivacaftor), which are collectively approved to treat around 60% of the 75,000 CF patients in North America, Europe and Australia.
Trikafta, approved in people aged 12 years and older who have at least one F508del mutation, is under review in Europe and is also being evaluated in younger patients in the United States. With approval of Trikafta, Vertex can address a significantly larger CF patient population — almost 90% of patients with CF — in the future.
Q1 Quarter and Outlook
Despite COVID-19 related uncertainty, Vertex’s sales in 2020 are being driven by rapid uptake of Trikafta and higher international revenues due to reimbursement arrangements in key ex-U.S. countries. Trikafta’s early approval and launch was a significant milestone for Vertex.
On April 29, Vertex reported Q1 results and beat estimates for earnings and sales. The 2020 outlook sparked analysts to raise EPS estimates significantly with this year getting boosted 15.8% from $7.60 to $8.80, representing 65% growth.
The company recorded total revenues of $4.16 billion in 2019, up 37%. Orkambi accounted for 29.4% of the company’s total product revenues, Kalydeco accounted for 24.7%, Symdeko accounted for 35.4% and Trikafta comprised 10.5% of the same.
Vertex’s dependence on the CF franchise for growth is a concern, especially as competitors would only erode market share. But Vertex’s non-CF pipeline is progressing rapidly with data in multiple disease arenas expected in 2020: sickle cell disease, thalassemia and pain management.
Vertex + CRISPR = Potential Knockout Punch for Blood Disorders
Vertex is co-developing a gene editing treatment, CTX001 in partnership with CRISPR Therapeutics (CRSP) in two devastating diseases — sickle cell disease and thalassemia. Phase I/II studies of CTX001 in adult transfusion-dependent b-thalassemia in Europe and sickle cell disease in the United States are ongoing.
In June 2019, Vertex announced expansion of its collaboration with CRISPR Therapeutics and acquisition of privately held Exonics Therapeutics to boost its gene editing capabilities to develop novel therapies for Duchenne muscular dystrophy (“DMD”) and Myotonic dystrophy type 1 (DM1).
In the April 29 update, Vertex and partner CRISPR Therapeutics said they remain on track to provide additional data from the two ongoing Phase 1/2 studies of the investigational CRISPR/Cas9 gene-editing therapy CTX001 in patients with transfusion-dependent beta thalassemia and in patients with severe sickle cell disease in 2020.
Bottom line for VRTX: The COVID-19 crisis has put the Biotech sector in the spotlight and dozens of companies are responding with resourceful R&D and robust adaptations to clinical trial interruptions. Vertex is a strong leader here and should be part of any growth-oriented healthcare-focused portfolio.
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