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) Q2 Loss Wider Than Expected, '24 Sales View Raised
Read MoreHide Full Article
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported second-quarter 2024 adjusted loss per share of $12.83, which was wider than the Zacks Consensus Estimate of a loss of $11.50. In the year-ago quarter, Vertex recorded adjusted earnings of $3.89 per share. The significant loss in the quarter was due to costs related to the $4.9 billion acquisition of Alpine Immune Sciences, which was closed in May.
The company reported total revenues of $2.65 billion, comprising cystic fibrosis (CF) product revenues. The figure was in line with the Zacks Consensus Estimate. Total revenues rose 6% year over year, primarily driven by higher sales of Trikafta/Kaftrio (marketed as Kaftrio in Europe). Revenues in the quarter were hurt by an expected reduction in channel inventories in select international markets.
Quarter in Detail
The company currently markets four CF products — Trikafta/Kaftrio, Symdeko (marketed as Symkevi in Europe), Orkambi and Kalydeco.
CF product sales rose 7% year over year in the United States to $1.61 billion, while sales outside the United States increased 5% to $1.03 billion.
Trikafta generated sales worth $2.45 billion, up 9.3% year over year. Trikafta sales were in line with the Zacks Consensus Estimate and slightly beat our model estimate of $2.42 billion.
Trikafta sales were driven by strong demand in both the United States and outside the U.S. market. In outside U.S. market, growth was driven by continued uptake from the Kaftrio launches in children aged two to five, partially offset by the reversal of the first-quarter channel inventory build.
Sales from other CF products declined 22.3% year over year to $196.4 million. Sales of these drugs were hurt by patients switching to Trikafta.
Shares of Vertex have risen 24.3% so far this year against the industry’s decline of 0.9%.
Image Source: Zacks Investment Research
While CF remains the main area of focus, Vertex has seen rapid success in its non-CF pipeline candidates’ development in the past year. Vertex and partner CRISPR Therapeutics’ (CRSP - Free Report) one-shot gene therapy Casgevy was approved for two blood disorders, sickle cell disease and transfusion-dependent beta-thalassemia, in multiple regions in late 2023/early 2024. Casgevy’s approval has diversified its commercial opportunity.
Vertex did not announce any sales figures for Casgevy in the second quarter, as the company will recognize revenues for Casgevy near the end of the patient journey at infusion. It expects to record Casgevy sales in the second half of 2024.
On the conference call, Vertex said it now has more than 35 activated authorized treatment centers or ATCs in all regions where the therapy is approved, up from 25 at the end of the first quarter. Multiple patients have initiated cell collection.
Cost Discussion
Adjusted R&D expenses were roughly flat year over year at $697.2 million. Adjusted selling, general and administrative (SG&A) expenses increased 28% to $280.4 million in the reported quarter due to expenses for the commercial launch of Casgevy and pre-launch activities for suzetrigine.
During the reported quarter, Vertex recorded acquired in-process research and development (IPR&D) costs of $4.4 billion due to costs related to the Alpine acquisition compared with $111.0 million in the year-ago quarter.
Adjusted operating loss was $3.15 billion in the quarter compared to operating income of $1.15 billion in the year-ago quarter.
2024 Guidance
Vertex raised its total product sales guidance from a range of $10.55-$10.75 billion to $10.65-$10.85 billion for 2024. The revenue range indicates growth of 9% at the midpoint. The revenue guidance includes sales from Casgevy from the second half of the year in approved indications and geographies.
Combined adjusted R&D and SG&A expenses for 2024 are expected in the band of $4.2 billion to $4.3 billion. Adjusted IPR&D charges are expected to be approximately $4.6 billion for 2024, including Alpine acquisition costs recorded in the second quarter. Previously, adjusted IPR&D charges were expected to be $125 million.
Adjusted R&D and SG&A expenses are expected to increase over the remainder of 2024 as it advances inaxaplin, povetacicept and suzetrigine (for diabetic peripheral neuropathy) into phase III studies and prepares for upcoming potential new commercial launches.
Pipeline Update
Vertex has additional near-term launches planned. These include suzetrigine (VX-548) for acute pain and vanzacaftor triple for CF.
For suzetrigine, in the last month, the FDA accepted Vertex’s new drug application (NDA), seeking approval for moderate-to-severe acute pain. The FDA has granted a priority review to the NDA, with a decision expected on Jan 30, 2025. Vertex plans to initiate a pivotal phase III program of suzetrigine in diabetic peripheral neuropathy, a form of peripheral neuropathic pain caused by damage to nerves, in the third quarter of 2024.
Vertex has completed enrollment in a phase II study of VX-548 in patients with painful lumbosacral radiculopathy, another form of peripheral neuropathic pain. Data from this study is expected to be announced in late 2024. Vertex believes suzetrigine has the potential to transform the treatment paradigm of pain, both acute and neuropathic. Pain is an area with limited treatment options, mostly highly addictive opioid-based medications.
Last month, the FDA also accepted Vertex’s NDA seeking approval for vanza triple, a next-in-class triple combination regimen for treating people with CF aged six years and older. The FDA has also granted priority review to this NDA, with a decision expected on Jan 2, 2025.
Vertex’s regulatory application for vanza triple is also under review in the EU and United Kingdom. Vanza triple is a combination of vanzacaftor, a CFTR potentiator, deutivacaftor, a CFTR corrector and tezacaftor. This new once-a-day oral combination medicine has the potential for enhanced patient benefit than Trikafta patients and become a new standard-of-care treatment in CF. It can potentially treat CF patients who have discontinued Trikafta or other Vertex CF medicines. It can also improve dosing (once daily) and lower the royalty burden. Vertex has also initiated a study on vanza triple in children with cystic fibrosis ages 2 to 5 years
Vertex has a rapidly advancing mid- to late-stage pipeline in other disease areas like APOL1-mediated kidney diseases, alpha-1 antitrypsin deficiency and cell therapy for type I diabetes.
Vertex plans to initiate a phase II study with an oral formulation of next-gen Nav1.8 inhibitor, VX-993, for the treatment of moderate-to-severe acute pain following bunionectomy surgery in the third quarter. The candidate is also in phase I development for the IV formulation.
Inaxaplin (formerly VX-147) is being developed in a phase II/III study in patients with APOL1-mediated kidney disease, including APOL1-mediated focal segmental glomerulosclerosis.
The Alpine acquisition added povetacicept to Vertex’s pipeline. Povetacicept is designed to target two proteins, namely BAFF and APRIL, which are jointly responsible for the cause of multiple serious autoimmune diseases. A phase III study on povetacicept for the treatment of IgA nephropathy is expected to begin in the third quarter. Povetacicept is also being evaluated in two phase II basket studies, one in renal diseases and a second in B cell mediated cytopenias.
Our Take
Vertex’s second-quarter results were lukewarm as it reported a wider-than-expected loss while sales came in line with estimates. However, based on a strong performance in the first half, Vertex raised its full-year product revenue guidance.
Vertex is benefiting from strong revenue growth, regulatory approvals and commercial launches. It has additional near-term launches planned and is rapidly progressing its mid- and earlier-stage pipeline, with multiple milestones expected in the second half of the year. The Alpine acquisition has added povetacicept, which Vertex believes has “pipeline in a product” potential. Along with the earnings release, Vertex announced that it is discontinuing the development of VX-634 and VX-668 for alpha-1antitrypsin deficiency.
Zacks Rank & Stocks to Consider
Vertex currently carries a Zacks Rank #4 (Sell).
Vertex Pharmaceuticals Incorporated Price and Consensus
In the past 60 days, estimates for Halozyme Therapeutics’ 2024 earnings per share have improved from $3.69 per share to $3.90 per share. Estimates for 2025 have increased from $4.50 per share to $4.81 per share. Year to date, shares of Halozyme Therapeutics have risen 48.9%.
Earnings of Halozyme Therapeutics beat estimates in three of the last four quarters while meeting the same once. HALO delivered a four-quarter average earnings surprise of 9.40%
In the past 60 days, ADMA Biologics’ earnings estimates for 2024 and 2025 have remained stable at 35 cents and 53 cents, respectively. ADMA Biologics’ shares have risen 171.1% year to date.
Earnings of ADMA beat estimates in three of the last four quarters while meeting in one, delivering a four-quarter average earnings surprise of 90.0%.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Vertex (VRTX) Q2 Loss Wider Than Expected, '24 Sales View Raised
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported second-quarter 2024 adjusted loss per share of $12.83, which was wider than the Zacks Consensus Estimate of a loss of $11.50. In the year-ago quarter, Vertex recorded adjusted earnings of $3.89 per share. The significant loss in the quarter was due to costs related to the $4.9 billion acquisition of Alpine Immune Sciences, which was closed in May.
The company reported total revenues of $2.65 billion, comprising cystic fibrosis (CF) product revenues. The figure was in line with the Zacks Consensus Estimate. Total revenues rose 6% year over year, primarily driven by higher sales of Trikafta/Kaftrio (marketed as Kaftrio in Europe). Revenues in the quarter were hurt by an expected reduction in channel inventories in select international markets.
Quarter in Detail
The company currently markets four CF products — Trikafta/Kaftrio, Symdeko (marketed as Symkevi in Europe), Orkambi and Kalydeco.
CF product sales rose 7% year over year in the United States to $1.61 billion, while sales outside the United States increased 5% to $1.03 billion.
Trikafta generated sales worth $2.45 billion, up 9.3% year over year. Trikafta sales were in line with the Zacks Consensus Estimate and slightly beat our model estimate of $2.42 billion.
Trikafta sales were driven by strong demand in both the United States and outside the U.S. market. In outside U.S. market, growth was driven by continued uptake from the Kaftrio launches in children aged two to five, partially offset by the reversal of the first-quarter channel inventory build.
Sales from other CF products declined 22.3% year over year to $196.4 million. Sales of these drugs were hurt by patients switching to Trikafta.
Shares of Vertex have risen 24.3% so far this year against the industry’s decline of 0.9%.
Image Source: Zacks Investment Research
While CF remains the main area of focus, Vertex has seen rapid success in its non-CF pipeline candidates’ development in the past year. Vertex and partner CRISPR Therapeutics’ (CRSP - Free Report) one-shot gene therapy Casgevy was approved for two blood disorders, sickle cell disease and transfusion-dependent beta-thalassemia, in multiple regions in late 2023/early 2024. Casgevy’s approval has diversified its commercial opportunity.
Vertex did not announce any sales figures for Casgevy in the second quarter, as the company will recognize revenues for Casgevy near the end of the patient journey at infusion. It expects to record Casgevy sales in the second half of 2024.
On the conference call, Vertex said it now has more than 35 activated authorized treatment centers or ATCs in all regions where the therapy is approved, up from 25 at the end of the first quarter. Multiple patients have initiated cell collection.
Cost Discussion
Adjusted R&D expenses were roughly flat year over year at $697.2 million. Adjusted selling, general and administrative (SG&A) expenses increased 28% to $280.4 million in the reported quarter due to expenses for the commercial launch of Casgevy and pre-launch activities for suzetrigine.
During the reported quarter, Vertex recorded acquired in-process research and development (IPR&D) costs of $4.4 billion due to costs related to the Alpine acquisition compared with $111.0 million in the year-ago quarter.
Adjusted operating loss was $3.15 billion in the quarter compared to operating income of $1.15 billion in the year-ago quarter.
2024 Guidance
Vertex raised its total product sales guidance from a range of $10.55-$10.75 billion to $10.65-$10.85 billion for 2024. The revenue range indicates growth of 9% at the midpoint. The revenue guidance includes sales from Casgevy from the second half of the year in approved indications and geographies.
Combined adjusted R&D and SG&A expenses for 2024 are expected in the band of $4.2 billion to $4.3 billion. Adjusted IPR&D charges are expected to be approximately $4.6 billion for 2024, including Alpine acquisition costs recorded in the second quarter. Previously, adjusted IPR&D charges were expected to be $125 million.
Adjusted R&D and SG&A expenses are expected to increase over the remainder of 2024 as it advances inaxaplin, povetacicept and suzetrigine (for diabetic peripheral neuropathy) into phase III studies and prepares for upcoming potential new commercial launches.
Pipeline Update
Vertex has additional near-term launches planned. These include suzetrigine (VX-548) for acute pain and vanzacaftor triple for CF.
For suzetrigine, in the last month, the FDA accepted Vertex’s new drug application (NDA), seeking approval for moderate-to-severe acute pain. The FDA has granted a priority review to the NDA, with a decision expected on Jan 30, 2025. Vertex plans to initiate a pivotal phase III program of suzetrigine in diabetic peripheral neuropathy, a form of peripheral neuropathic pain caused by damage to nerves, in the third quarter of 2024.
Vertex has completed enrollment in a phase II study of VX-548 in patients with painful lumbosacral radiculopathy, another form of peripheral neuropathic pain. Data from this study is expected to be announced in late 2024. Vertex believes suzetrigine has the potential to transform the treatment paradigm of pain, both acute and neuropathic. Pain is an area with limited treatment options, mostly highly addictive opioid-based medications.
Last month, the FDA also accepted Vertex’s NDA seeking approval for vanza triple, a next-in-class triple combination regimen for treating people with CF aged six years and older. The FDA has also granted priority review to this NDA, with a decision expected on Jan 2, 2025.
Vertex’s regulatory application for vanza triple is also under review in the EU and United Kingdom. Vanza triple is a combination of vanzacaftor, a CFTR potentiator, deutivacaftor, a CFTR corrector and tezacaftor. This new once-a-day oral combination medicine has the potential for enhanced patient benefit than Trikafta patients and become a new standard-of-care treatment in CF. It can potentially treat CF patients who have discontinued Trikafta or other Vertex CF medicines. It can also improve dosing (once daily) and lower the royalty burden. Vertex has also initiated a study on vanza triple in children with cystic fibrosis ages 2 to 5 years
Vertex has a rapidly advancing mid- to late-stage pipeline in other disease areas like APOL1-mediated kidney diseases, alpha-1 antitrypsin deficiency and cell therapy for type I diabetes.
Vertex plans to initiate a phase II study with an oral formulation of next-gen Nav1.8 inhibitor, VX-993, for the treatment of moderate-to-severe acute pain following bunionectomy surgery in the third quarter. The candidate is also in phase I development for the IV formulation.
Inaxaplin (formerly VX-147) is being developed in a phase II/III study in patients with APOL1-mediated kidney disease, including APOL1-mediated focal segmental glomerulosclerosis.
The Alpine acquisition added povetacicept to Vertex’s pipeline. Povetacicept is designed to target two proteins, namely BAFF and APRIL, which are jointly responsible for the cause of multiple serious autoimmune diseases. A phase III study on povetacicept for the treatment of IgA nephropathy is expected to begin in the third quarter. Povetacicept is also being evaluated in two phase II basket studies, one in renal diseases and a second in B cell mediated cytopenias.
Our Take
Vertex’s second-quarter results were lukewarm as it reported a wider-than-expected loss while sales came in line with estimates. However, based on a strong performance in the first half, Vertex raised its full-year product revenue guidance.
Vertex is benefiting from strong revenue growth, regulatory approvals and commercial launches. It has additional near-term launches planned and is rapidly progressing its mid- and earlier-stage pipeline, with multiple milestones expected in the second half of the year. The Alpine acquisition has added povetacicept, which Vertex believes has “pipeline in a product” potential. Along with the earnings release, Vertex announced that it is discontinuing the development of VX-634 and VX-668 for alpha-1antitrypsin deficiency.
Zacks Rank & Stocks to Consider
Vertex currently carries a Zacks Rank #4 (Sell).
Vertex Pharmaceuticals Incorporated Price and Consensus
Vertex Pharmaceuticals Incorporated price-consensus-chart | Vertex Pharmaceuticals Incorporated Quote
Some better-ranked drug/biotech companies are Halozyme Therapeutics (HALO - Free Report) and ADMA Biologics (ADMA - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Halozyme Therapeutics’ 2024 earnings per share have improved from $3.69 per share to $3.90 per share. Estimates for 2025 have increased from $4.50 per share to $4.81 per share. Year to date, shares of Halozyme Therapeutics have risen 48.9%.
Earnings of Halozyme Therapeutics beat estimates in three of the last four quarters while meeting the same once. HALO delivered a four-quarter average earnings surprise of 9.40%
In the past 60 days, ADMA Biologics’ earnings estimates for 2024 and 2025 have remained stable at 35 cents and 53 cents, respectively. ADMA Biologics’ shares have risen 171.1% year to date.
Earnings of ADMA beat estimates in three of the last four quarters while meeting in one, delivering a four-quarter average earnings surprise of 90.0%.