We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Vertex (VRTX) Down 2.8% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Vertex Pharmaceuticals (VRTX - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Vertex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Q4 Earnings & Sales Beat
Vertex reported adjusted earnings per share of $3.76 for fourth-quarter 2022, up 25% year over year. The adjusted earnings also beat the Zacks Consensus Estimate and our model estimate of $3.53 and $3.32, respectively. Strong cystic fibrosis (“CF”) product revenues boosted earnings.
Revenues of $2.30 billion surpassed both the Zacks Consensus Estimate and our model estimates of $2.29 billion and $2.26 billion, respectively. Total product rose 11% year over year, primarily driven by higher international sales of Trikafta (marketed as Kaftrio in Europe).
CF product sales rose 5% year over year in the United States to $1.46 billion, while sales outside the United States surged 24% to $842 million.
Trikafta generated sales worth $2.02 billion, up 19.4% year over year, driven by strong uptakes in international markets with recently secured reimbursement agreements as well as expanded use for younger age groups in the United States as well as ex U.S. Vertex received reimbursement for Trikafta for six to 11 years age group in countries such as France and Spain. Trikafta sales also beat our model estimate of $1.99 billion.
Vertex estimates that there are still more than 20,000 CF patients who can benefit from its CFTR modulator therapies. These include patients in countries where Vertex is early on the launch curve and younger patients for whom Vertex is pursuing additional label and reimbursement approvals.
Symdeko/Symkevi registered sales of $34 million in the quarter, down 57.5% year over year.
Kalydeco recorded sales of $136 million in the quarter, down 10.5% year over year. Orkambi generated sales of $111 million in the reported quarter, down 24.5% from the prior-year quarter. Sales of Kalydeco, Symdeko/Symkevi and Orkambi were hurt by patients switching to Trikafta.
Costs Rise
Adjusted operating expense was $872 million in the quarter, up 5% from the prior-year quarter’s levels.
Adjusted research and development (R&D) expenses rose 26.4% from the year-ago quarter’s level to $623 million due to Vertex’s expanding mid- and late-stage pipeline. Adjusted selling, general and administrative (SG&A) expenses increased 7.6% to $226 million in the reported quarter due to expenses for CF launches and pre-commercial activities for exa-cel.
During the fourth quarter, Vertex recorded acquired IPR&D costs of $23 million compared with $127 million in the year-ago quarter.
Adjusted operating income was $1.15 billion in the quarter, an increase of 15% from the prior-year period.
Full-Year 2022 Results
For 2022, Vertex generated revenues of $8.9 billion, reflecting 18% growth year over year.
For the same period, the company reported earnings of $14.88 per share, up 54% year over year.
2023 Guidance
The company expects total revenues from CF products in the range of $9.55-$9.70 billion for 2023, suggesting 7-9% year-over-year growth. The product revenue guidance reflects only revenues from cystic fibrosis products and does not include any revenues from exa-cel
Vertex expects revenue growth in 2023 to be driven by continued strong performance of Trikafta/Kaftrio in all major markets, further uptake in international markets with recent reimbursement agreements and expansion into younger patient populations. Vertex expects FDA approval/launch for Trikafta for CF patients aged 2-5 in 2023 (PDUFA Date: April 28) to also boost 2023 revenues.
Combined adjusted R&D, acquired IPR&D and SG&A expense for 2023 is expected in the range of $3.9-$4.0 billion. The guidance includes approximately 300 million of upfronts and milestones from known collaborations, including the expected upfront payment in the first quarter from Entrada.
The adjusted tax rate is expected in the range of 21-22%. Currency headwinds are expected to have a negative impact of approximately 1.5% on revenue growth in 2023.
Share Repurchase Program
On Feb 1, Vertex’s board of directors approved a new share repurchase program, authorizing repurchase of up to $3.0 billion of its common stock.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -16.45% due to these changes.
VGM Scores
Currently, Vertex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vertex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Vertex (VRTX) Down 2.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Vertex Pharmaceuticals (VRTX - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Vertex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Q4 Earnings & Sales Beat
Vertex reported adjusted earnings per share of $3.76 for fourth-quarter 2022, up 25% year over year. The adjusted earnings also beat the Zacks Consensus Estimate and our model estimate of $3.53 and $3.32, respectively. Strong cystic fibrosis (“CF”) product revenues boosted earnings.
Revenues of $2.30 billion surpassed both the Zacks Consensus Estimate and our model estimates of $2.29 billion and $2.26 billion, respectively. Total product rose 11% year over year, primarily driven by higher international sales of Trikafta (marketed as Kaftrio in Europe).
CF product sales rose 5% year over year in the United States to $1.46 billion, while sales outside the United States surged 24% to $842 million.
Trikafta generated sales worth $2.02 billion, up 19.4% year over year, driven by strong uptakes in international markets with recently secured reimbursement agreements as well as expanded use for younger age groups in the United States as well as ex U.S. Vertex received reimbursement for Trikafta for six to 11 years age group in countries such as France and Spain. Trikafta sales also beat our model estimate of $1.99 billion.
Vertex estimates that there are still more than 20,000 CF patients who can benefit from its CFTR modulator therapies. These include patients in countries where Vertex is early on the launch curve and younger patients for whom Vertex is pursuing additional label and reimbursement approvals.
Symdeko/Symkevi registered sales of $34 million in the quarter, down 57.5% year over year.
Kalydeco recorded sales of $136 million in the quarter, down 10.5% year over year. Orkambi generated sales of $111 million in the reported quarter, down 24.5% from the prior-year quarter. Sales of Kalydeco, Symdeko/Symkevi and Orkambi were hurt by patients switching to Trikafta.
Costs Rise
Adjusted operating expense was $872 million in the quarter, up 5% from the prior-year quarter’s levels.
Adjusted research and development (R&D) expenses rose 26.4% from the year-ago quarter’s level to $623 million due to Vertex’s expanding mid- and late-stage pipeline. Adjusted selling, general and administrative (SG&A) expenses increased 7.6% to $226 million in the reported quarter due to expenses for CF launches and pre-commercial activities for exa-cel.
During the fourth quarter, Vertex recorded acquired IPR&D costs of $23 million compared with $127 million in the year-ago quarter.
Adjusted operating income was $1.15 billion in the quarter, an increase of 15% from the prior-year period.
Full-Year 2022 Results
For 2022, Vertex generated revenues of $8.9 billion, reflecting 18% growth year over year.
For the same period, the company reported earnings of $14.88 per share, up 54% year over year.
2023 Guidance
The company expects total revenues from CF products in the range of $9.55-$9.70 billion for 2023, suggesting 7-9% year-over-year growth. The product revenue guidance reflects only revenues from cystic fibrosis products and does not include any revenues from exa-cel
Vertex expects revenue growth in 2023 to be driven by continued strong performance of Trikafta/Kaftrio in all major markets, further uptake in international markets with recent reimbursement agreements and expansion into younger patient populations. Vertex expects FDA approval/launch for Trikafta for CF patients aged 2-5 in 2023 (PDUFA Date: April 28) to also boost 2023 revenues.
Combined adjusted R&D, acquired IPR&D and SG&A expense for 2023 is expected in the range of $3.9-$4.0 billion. The guidance includes approximately 300 million of upfronts and milestones from known collaborations, including the expected upfront payment in the first quarter from Entrada.
The adjusted tax rate is expected in the range of 21-22%. Currency headwinds are expected to have a negative impact of approximately 1.5% on revenue growth in 2023.
Share Repurchase Program
On Feb 1, Vertex’s board of directors approved a new share repurchase program, authorizing repurchase of up to $3.0 billion of its common stock.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -16.45% due to these changes.
VGM Scores
Currently, Vertex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vertex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.