Vertex Pharmaceuticals put out some good news this morning, detailing positive results for late-stage trials of two of its leading drugs, Lumacaftor and Kalydeco, which are pioneers in treating cystic fibrosis. Traders responded positively to the news, citing significant upside to the company’s revenue pending approval from US and European regulators.
The markets took the news with gusto, shares of Vertex virtually doubling in a matter of minutes to roughly $95 a share, giving the company an estimated enterprise value of $15 billion. Similar pharmaceutical developers were also higher on the news, including Mankind, Invio Pharma and Gilead Sciences. Soon after the market open, Stocktwits sentiment fell significantly as traders took a more bearish stance towards stock move.
Analysts remained significantly positive on the news, Maxim Group being one of several who issued an upgrade and a $107 price target.
Vertex is expected to file for drug approval in the US and in Europe by the fourth quarter of the fiscal year. Despite rosy outlook, the company reported a $688 million earnings loss in fiscal 2013, and is forecasting losing $489 million in fiscal 2014, a big pill for investors to swallow.