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Vertex (VRTX) to Report Q2 Earnings: What's in the Cards?

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Vertex Pharmaceuticals Incorporated VRTX will report second-quarter 2022 results on Aug 4, after the market closes. In the last reported quarter, VRTX delivered a negative earnings surprise of 2.22%.

This large-cap biotech’s performance has been pretty impressive so far, with its earnings beating estimates in three of the trailing four quarters but missing the mark in one. VRTX has a trailing four-quarter earnings surprise of 7.56%, on average.

In the year so far, shares of Vertex have risen 27.9% against the industry’s 18.6% decline.

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Let’s see how things are shaping up for the quarter to be reported.

Factors to Consider

Revenue growth in the second quarter of 2022 is likely to have been driven by a rapid uptake of Vertex’s newest cystic fibrosis (CF) medicine Trikafta/Kaftrio (Trikafta’s brand name in Europe).

Sales for Trikafta in the United States are likely to have been driven by an increased adoption of the drug among pediatric patients (6-11 years of age) in the to-be-reported quarter. Besides, a continued uptake of Kaftrio in Europe and a label expansion approval for pediatric patients might have driven the product’s international revenues.

Higher sales of Trikafta are likely to have caused sales erosion of Vertex’s other CF drugs and existing combinations, namely Kalydeco, Orkambi and Symdeko/Symkevi.

Investors will also expect an update on Vertex’s non-CF pipeline during the second-quarter conference call. VRTX continues to speedily advance its pipeline candidates for addressing additional diseases beyond CF like pain, sickle cell disease, thalassemia, APOL1-mediated kidney diseases and diabetes. Several candidates are being developed to treat these indications using different mechanisms, such as gene-editing, mRNA and cell therapy.

As part of its collaboration with CRISPR Therapeutics CRSP, Vertex is developing exagamglogene autotemcel (exa-cel, formerly CTX001), an investigational ex-vivo CRISPR gene-edited therapy for two indications, namely sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT), in two separate phase III studies. A regulatory submission by CRISPR Therapeutics and Vertex for exa-cel to treat both indications is anticipated later this year.

Last month, Vertex and CRISPR Therapeutics presented new data from the above-mentioned studies. Data from these studies show that exa-cel has the potential to be a one-time functional cure for TDT and SCD indications.

Earlier this month, Vertex and partner ViaCyte announced that the FDA lifted the clinical hold placed on the phase I/II study, which is evaluating its investigational stem cell-based therapy VX-880 for type I diabetes (T1D). The regulatory agency had placed the hold in May 2022 after it had determined that there is insufficient information to support dose escalation with the product.

Following the above development, the study will now be restarted for screening, enrollment and dosing of patients at multiple sites in the United States. To further accelerate the development of VX-880, Vertex announced plans to acquire its partner ViaCyte for $320 million in cash.The deal is expected to be completed later this year, subject to certain customary closing conditions.

Earnings Whispers

Our proven model does not predict an earnings beat for Vertex this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Vertex has an Earnings ESP of -1.80% as the Most Accurate Estimate of $3.42 per share is lower than the Zacks Consensus Estimate of $3.48.

Vertex Pharmaceuticals Incorporated Price and EPS Surprise

Vertex Pharmaceuticals Incorporated Price and EPS Surprise
Vertex Pharmaceuticals Incorporated Price and EPS Surprise

Vertex Pharmaceuticals Incorporated price-eps-surprise | Vertex Pharmaceuticals Incorporated Quote

Zacks Rank: Vertex has a Zacks Rank #3, currently.

Stocks to Consider

Here are a few stocks worth considering from the overall heathcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

ADC Therapeutics ADCT has an Earnings ESP of +0.78% and a Zacks Rank of 3.

ADC Therapeutics’ performance has been pretty encouraging to date, with its earnings exceeding expectations in each of the trailing four quarters, the average being 40.91%. Shares of ADCT have plunged 62.0% this year so far.

Ionis Pharmaceuticals IONS has an Earnings ESP of +27.61% and a Zacks Rank #2.

Ionis Pharmaceuticals’ stock has risen 28.1% this year so far. IONS’ earnings topped estimates in two of the last four quarters and missed the mark on the other two occasions. IONS has a trailing four-quarter earnings surprise of 24.35%, on average.

Ionis Pharmaceuticals is scheduled to release second-quarter 2022 results on Aug 9.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
 
ADC Therapeutics SA (ADCT) : Free Stock Analysis Report
 
Ionis Pharmaceuticals, Inc. (IONS) : Free Stock Analysis Report
 
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