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.
The Zacks Analyst Blog Vertex Pharmaceuticals CRISPR and Moderna
Read MoreHide Full Article
For Immediate Releases
Chicago, IL – August 9, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , CRISPR Therapeutics’ (CRSP - Free Report) and Moderna (MRNA - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Here's How to Play Vertex (VRTX - Free Report) Stock After Q2 Loss, Price Dip
Vertex Pharmaceuticals Incorporated reported second-quarter 2024 results on Aug 1. Adjusted loss per share of $12.83 was wider than the Zacks Consensus Estimate of a loss of $11.50. The significant loss in the quarter was due to costs related to the $4.9 billion acquisition of Alpine Immune Sciences closed in May.
Revenues of $2.65 billion were in line with the Zacks Consensus Estimate. Total revenues rose 6% year over year, primarily driven by higher sales of its cystic fibrosis (CF) drug Trikafta/Kaftrio (marketed as Kaftrio in Europe) in younger age groups. Trikafta generated sales worth $2.45 billion, up 9.3% year over year.
Based on a strong performance in the first half, 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 stock has declined around 8% since its second-quarter results. Nonetheless, a single quarter’s results are not so important for long-term investors, and the focus should, rather, be on the company’s strong fundamentals. Let’s understand the company’s strengths and weaknesses to better analyze how to play the stock in the post-earnings scenario.
Vertex enjoys a dominant position in the CF market. Vertex’s CF sales continue to grow, driven by its triple therapy, Trikafta/Kaftrio. While CF remains the main area of focus, Vertex has seen rapid success in its non-CF pipeline candidates’ development in the past year.
Let’s delve deeper.
Casgevy Diversifies Commercial Opportunity
Vertex and partner CRISPR Therapeutics’ one-shot gene therapy Casgevy was approved for two blood disorders, sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT), in multiple regions in late 2023/early 2024. Casgevy’s approval has diversified its commercial opportunity.
Vertex and CRISPR Therapeutics’ Casgevy is the first-ever CRISPR/Cas9-based therapy to be approved anywhere in the world. Vertex and CRSP believe Casgevy has the potential to be a one-time functional cure for SCD and TDT patients, with an estimated patient population of approximately 35,000 across the United States and Europe.
Vertex is making rapid progress with the launch of Casgevy and is also making great progress with payers. Vertex expects to record Casgevy sales from the second half of 2024.
New Products on the Way
Vertex has additional near-term launches planned. These include suzetrigine for acute pain and vanzacaftor triple for CF.
Vertex’s new drug application (NDA) seeking approval for suzetrigine (formerly known as VX-548) across a broad label in moderate-to-severe acute pain is under review with the FDA. The FDA has granted a priority review to the NDA, with a decision expected on Jan 30, 2025.
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, is under review with the FDA. The FDA has 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 some other countries. 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 has 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 also 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 rapidly completed enrollment in a phase II study of suzetrigine in patients with painful lumbosacral radiculopathy, another form of peripheral neuropathic pain. Data from this study is expected 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.
Robust Pipeline
In CF, Vertex is evaluating its medicines in younger patient populations and aims to have small-molecule treatments for most people with the condition. Additionally, Vertex is developing an mRNA therapeutic, VX-522, in partnership with Moderna for approximately 5,000 people with CF who do not make CFTR protein and who cannot benefit from its CFTR modulators.
The Alpine acquisition added povetacicept to Vertex’s pipeline. Vertex believes povetacicepthas “pipeline in a product” potential. 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 the second in B cell mediated cytopenias.
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. Many of these candidates represent multibillion-dollar opportunities. This year is expected to be a catalyst-rich year for Vertex. It has plans to advance inaxaplin, povetacicept and suzetrigine (for DPN) into phase III studies this year. Several important clinical milestones are expected over the next few months in its CF and non-CF portfolio.
Valuation, Estimates and Price
Vertex’s stock has gone up by 132.4% in the past three years, mainly due to its solid pipeline progress and strong CF sales. The stock has been trading above its 200-day moving average for several months.
So far this year, Vertex’s stock has risen 14.5% against the industry’s 4.4% decline. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.
The stock is trading at a premium to the industry.
The Zacks Consensus Estimate for earnings for 2024 has declined from $17.09 to $6.28 per share over the past 30 days due to acquisition costs. For 2025, earnings per share estimates have declined from $17.71 to $17.62 over the past 30 days.
Conclusion
The lukewarm second-quarter performance, declining estimates, a premium valuation and the recent price drop has sent investors wondering if they should sell the stock. Though the stock has declined post its second-quarter results, its performance has been consistently strong over the past few months. The declining earnings estimates are due to the costs related to the Alpine acquisition.
Vertex is a great stock to have in one’s portfolio based on its strong overall financial performance and robust pipeline progress. Vertex faces minimal competition in the CF franchise. CF sales are expected to remain strong despite a slight slowdown in the growth rate. Casgevy and suzetrigine (if approved) will provide the necessary diversification from the CF franchise. Its dependence on just the CF franchise for growth was a concern for several analysts but the company is gradually resolving it. The new drugs will propel its top line in future quarters.
Though VRTX’s stock currently looks expensive, we don’t see any need to sell the stock as the company has growth potential. Those who already own the stock may retain it for some time to see if its CF sales continue to rise and how the Casgevy launch progresses. Vertex presently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Those who don’t already own the stock may consider buying it at the recent dip if they want to keep it for a long timeframe.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Vertex Pharmaceuticals CRISPR and Moderna
For Immediate Releases
Chicago, IL – August 9, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , CRISPR Therapeutics’ (CRSP - Free Report) and Moderna (MRNA - Free Report) .
Here are highlights from Friday’s Analyst Blog:
Here's How to Play Vertex (VRTX - Free Report) Stock After Q2 Loss, Price Dip
Vertex Pharmaceuticals Incorporated reported second-quarter 2024 results on Aug 1. Adjusted loss per share of $12.83 was wider than the Zacks Consensus Estimate of a loss of $11.50. The significant loss in the quarter was due to costs related to the $4.9 billion acquisition of Alpine Immune Sciences closed in May.
Revenues of $2.65 billion were in line with the Zacks Consensus Estimate. Total revenues rose 6% year over year, primarily driven by higher sales of its cystic fibrosis (CF) drug Trikafta/Kaftrio (marketed as Kaftrio in Europe) in younger age groups. Trikafta generated sales worth $2.45 billion, up 9.3% year over year.
Based on a strong performance in the first half, 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 stock has declined around 8% since its second-quarter results. Nonetheless, a single quarter’s results are not so important for long-term investors, and the focus should, rather, be on the company’s strong fundamentals. Let’s understand the company’s strengths and weaknesses to better analyze how to play the stock in the post-earnings scenario.
Vertex enjoys a dominant position in the CF market. Vertex’s CF sales continue to grow, driven by its triple therapy, Trikafta/Kaftrio. While CF remains the main area of focus, Vertex has seen rapid success in its non-CF pipeline candidates’ development in the past year.
Let’s delve deeper.
Casgevy Diversifies Commercial Opportunity
Vertex and partner CRISPR Therapeutics’ one-shot gene therapy Casgevy was approved for two blood disorders, sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT), in multiple regions in late 2023/early 2024. Casgevy’s approval has diversified its commercial opportunity.
Vertex and CRISPR Therapeutics’ Casgevy is the first-ever CRISPR/Cas9-based therapy to be approved anywhere in the world. Vertex and CRSP believe Casgevy has the potential to be a one-time functional cure for SCD and TDT patients, with an estimated patient population of approximately 35,000 across the United States and Europe.
Vertex is making rapid progress with the launch of Casgevy and is also making great progress with payers. Vertex expects to record Casgevy sales from the second half of 2024.
New Products on the Way
Vertex has additional near-term launches planned. These include suzetrigine for acute pain and vanzacaftor triple for CF.
Vertex’s new drug application (NDA) seeking approval for suzetrigine (formerly known as VX-548) across a broad label in moderate-to-severe acute pain is under review with the FDA. The FDA has granted a priority review to the NDA, with a decision expected on Jan 30, 2025.
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, is under review with the FDA. The FDA has 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 some other countries. 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 has 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 also 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 rapidly completed enrollment in a phase II study of suzetrigine in patients with painful lumbosacral radiculopathy, another form of peripheral neuropathic pain. Data from this study is expected 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.
Robust Pipeline
In CF, Vertex is evaluating its medicines in younger patient populations and aims to have small-molecule treatments for most people with the condition. Additionally, Vertex is developing an mRNA therapeutic, VX-522, in partnership with Moderna for approximately 5,000 people with CF who do not make CFTR protein and who cannot benefit from its CFTR modulators.
The Alpine acquisition added povetacicept to Vertex’s pipeline. Vertex believes povetacicepthas “pipeline in a product” potential. 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 the second in B cell mediated cytopenias.
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. Many of these candidates represent multibillion-dollar opportunities. This year is expected to be a catalyst-rich year for Vertex. It has plans to advance inaxaplin, povetacicept and suzetrigine (for DPN) into phase III studies this year. Several important clinical milestones are expected over the next few months in its CF and non-CF portfolio.
Valuation, Estimates and Price
Vertex’s stock has gone up by 132.4% in the past three years, mainly due to its solid pipeline progress and strong CF sales. The stock has been trading above its 200-day moving average for several months.
So far this year, Vertex’s stock has risen 14.5% against the industry’s 4.4% decline. The stock has also outperformed the sector as well as the S&P 500, as seen in the chart below.
The stock is trading at a premium to the industry.
The Zacks Consensus Estimate for earnings for 2024 has declined from $17.09 to $6.28 per share over the past 30 days due to acquisition costs. For 2025, earnings per share estimates have declined from $17.71 to $17.62 over the past 30 days.
Conclusion
The lukewarm second-quarter performance, declining estimates, a premium valuation and the recent price drop has sent investors wondering if they should sell the stock. Though the stock has declined post its second-quarter results, its performance has been consistently strong over the past few months. The declining earnings estimates are due to the costs related to the Alpine acquisition.
Vertex is a great stock to have in one’s portfolio based on its strong overall financial performance and robust pipeline progress. Vertex faces minimal competition in the CF franchise. CF sales are expected to remain strong despite a slight slowdown in the growth rate. Casgevy and suzetrigine (if approved) will provide the necessary diversification from the CF franchise. Its dependence on just the CF franchise for growth was a concern for several analysts but the company is gradually resolving it. The new drugs will propel its top line in future quarters.
Though VRTX’s stock currently looks expensive, we don’t see any need to sell the stock as the company has growth potential. Those who already own the stock may retain it for some time to see if its CF sales continue to rise and how the Casgevy launch progresses. Vertex presently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Those who don’t already own the stock may consider buying it at the recent dip if they want to keep it for a long timeframe.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.