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Vertex (VRTX) Soars 13.2%: Is Further Upside Left in the Stock?

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Vertex Pharmaceuticals (VRTX - Free Report) shares soared 13.2% in the last trading session to close at $405.07. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.3% loss over the past four weeks.

Earlier this week, Vertex announced encouraging data from a phase II study which demonstrated promising safety and efficacy profile of its investigational non-opioid pain medicine, VX-548 for treating painful diabetic peripheral neuropathy (DPN) across all doses.

The data from the phase II dose-ranging study showed that VX-548, a novel first-in-class NaV1.8 inhibitor, led to statistically significant and clinically meaningful reduction in the primary endpoint of change from baseline in the Numeric Pain Rating Scale (NPRS), a measure of pain intensity in adults.

Investors are paying a lot of attention to VX-548, which, they believe, has blockbuster potential as it can change the standard of care for neuropathic pain, an area with limited treatment options, mostly highly-addictive opioid-based medications.  Following the positive data shares of Vertex were up.

This drugmaker is expected to post quarterly earnings of $4.07 per share in its upcoming report, which represents a year-over-year change of +8.2%. Revenues are expected to be $2.5 billion, up 8.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Vertex, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on VRTX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Vertex is part of the Zacks Medical - Biomedical and Genetics industry. Amgen (AMGN - Free Report) , another stock in the same industry, closed the last trading session 2.8% higher at $281.62. AMGN has returned 1.5% in the past month.

Amgen's consensus EPS estimate for the upcoming report has changed -0.1% over the past month to $4.69. Compared to the company's year-ago EPS, this represents a change of +14.7%. Amgen currently boasts a Zacks Rank of #3 (Hold).


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