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.
Is Vertex Pharma (VRTX) Poised for a Turnaround in 2017?
Read MoreHide Full Article
Vertex Pharmaceuticals, Inc.’s (VRTX - Free Report) main therapeutic area of focus is cystic fibrosis (CF).Presently, the company markets two medicines for the disease – Kalydeco and Orkambi.
How did Vertex Perform in 2016?
Vertex has had a rough run last year. It recorded negative earnings surprises twice in the three reported quarters. In the last reported quarter – the third quarter of 2016 – Vertex’s loss was wider than expected and revenues fell short of expectations. Orkambi put up a weaker-than-expected performance in the quarter, which was due to slower-than-anticipated launch in Germany, close-to-peak penetration for the approved indication in the U.S., and lower-than-expected refills in the months of July and August.
Vertex’s share price tanked 41.5% in 2016, underperforming a decline of 27.1% for the Zacks-classified Biomedical-Genetics industry.
Will 2017 be Better?
However, for 2017, things do not appear that dismal for Vertex.
Firstly, in Sep 2016, Orkambi’s label was expanded to include children (6–11 years old) – this gives the drug access to about 2,400 CF patients in the U.S. Management expects the label expansion to drive sales growth in the fourth quarter of 2016 as well as in 2017. Moreover, pricing and reimbursement in ex-U.S. countries are expected to drive top-line growth this year.
In addition, a six-month phase III efficacy study in the pediatric patient population – tosupport the expansion of Orkambi’s label in Europe – demonstrated positive outcomes in Nov 2016. Note that around 3,400 children in the EU fall in this category and Vertex plans to file for an approval in the first half of 2017.
In fact, Vertex’s efforts to get both Kalydeco and Orkambi approved in additional indications are encouraging. Label expansion will expand the eligible patient population for these drugs and thus boost their sales.
Secondly, Vertex is working on strengthening its position in the CF market. The company has quite a few key pipeline events lined up for 2017. It is currently evaluating aCF corrector, VX-661 (tezacaftor) in combination with Kalydeco, in a phase III program with three ongoing studies. Data from all of these studies are expected in the first half of 2017. Depending on the phase III data, Vertex plans to file for an FDA approval of the VX-661/Kalydeco combination in the second half of 2017.
Vertex is also evaluating a couple of next-generation CFTR correctors – VX-152 and VX-440. The candidates are being evaluated alone as well as in a triple combination with VX-661 and Kalydeco. If the triple-combo regimes are successful, Vertex can address a significantly larger CF patient population.
Meanwhile, Vertex is looking to move new next-generation correctors into clinical development. Besides, the company’s non-CF pipeline, focused on therapeutic areas like cancer and pain has significant upside potential.
The company is expected to record earnings and sales growth of 451.09% and 29.23%, respectively, in 2017. Its earnings estimates for 2017 have gone up 19% over the past 60 days.
We can see that Vertex is well poised for a turnaround in 2017. (Looking for the Best Stocks for 2017? Be among the first to see our Top Ten Stocks for 2017 portfolio here.)
Other Stocks to Consider
Other favorably placed stocks in the health care sector include Cambrex Corporation , Arena Pharmaceuticals, Inc. and Anika Therapeutics Inc. (ANIK - Free Report) . WhileCambrexand Arena sport a Zacks Rank #1 (Strong Buy), Anika carries the same Zacks Rank as Vertex.
Cambrex’s earnings estimates increased 5.2% for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 19.78%. Its share price was up 16.6% in 2016.
Arena’s loss estimates narrowed by 3% over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 11.43%.
Anika’s earnings estimates for 2017 were up 3.9% in the last 60 days. The company has recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price gained 28.3% in 2016.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vertex Pharma (VRTX) Poised for a Turnaround in 2017?
Vertex Pharmaceuticals, Inc.’s (VRTX - Free Report) main therapeutic area of focus is cystic fibrosis (CF).Presently, the company markets two medicines for the disease – Kalydeco and Orkambi.
How did Vertex Perform in 2016?
Vertex has had a rough run last year. It recorded negative earnings surprises twice in the three reported quarters. In the last reported quarter – the third quarter of 2016 – Vertex’s loss was wider than expected and revenues fell short of expectations. Orkambi put up a weaker-than-expected performance in the quarter, which was due to slower-than-anticipated launch in Germany, close-to-peak penetration for the approved indication in the U.S., and lower-than-expected refills in the months of July and August.
Vertex’s share price tanked 41.5% in 2016, underperforming a decline of 27.1% for the Zacks-classified Biomedical-Genetics industry.
Will 2017 be Better?
However, for 2017, things do not appear that dismal for Vertex.
Firstly, in Sep 2016, Orkambi’s label was expanded to include children (6–11 years old) – this gives the drug access to about 2,400 CF patients in the U.S. Management expects the label expansion to drive sales growth in the fourth quarter of 2016 as well as in 2017. Moreover, pricing and reimbursement in ex-U.S. countries are expected to drive top-line growth this year.
In addition, a six-month phase III efficacy study in the pediatric patient population – tosupport the expansion of Orkambi’s label in Europe – demonstrated positive outcomes in Nov 2016. Note that around 3,400 children in the EU fall in this category and Vertex plans to file for an approval in the first half of 2017.
In fact, Vertex’s efforts to get both Kalydeco and Orkambi approved in additional indications are encouraging. Label expansion will expand the eligible patient population for these drugs and thus boost their sales.
Secondly, Vertex is working on strengthening its position in the CF market. The company has quite a few key pipeline events lined up for 2017. It is currently evaluating aCF corrector, VX-661 (tezacaftor) in combination with Kalydeco, in a phase III program with three ongoing studies. Data from all of these studies are expected in the first half of 2017. Depending on the phase III data, Vertex plans to file for an FDA approval of the VX-661/Kalydeco combination in the second half of 2017.
Vertex is also evaluating a couple of next-generation CFTR correctors – VX-152 and VX-440. The candidates are being evaluated alone as well as in a triple combination with VX-661 and Kalydeco. If the triple-combo regimes are successful, Vertex can address a significantly larger CF patient population.
Meanwhile, Vertex is looking to move new next-generation correctors into clinical development. Besides, the company’s non-CF pipeline, focused on therapeutic areas like cancer and pain has significant upside potential.
What do the Numbers Say?
Vertex has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company is expected to record earnings and sales growth of 451.09% and 29.23%, respectively, in 2017. Its earnings estimates for 2017 have gone up 19% over the past 60 days.
We can see that Vertex is well poised for a turnaround in 2017. (Looking for the Best Stocks for 2017? Be among the first to see our Top Ten Stocks for 2017 portfolio here.)
Other Stocks to Consider
Other favorably placed stocks in the health care sector include Cambrex Corporation , Arena Pharmaceuticals, Inc. and Anika Therapeutics Inc. (ANIK - Free Report) . WhileCambrexand Arena sport a Zacks Rank #1 (Strong Buy), Anika carries the same Zacks Rank as Vertex.
Cambrex’s earnings estimates increased 5.2% for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 19.78%. Its share price was up 16.6% in 2016.
Arena’s loss estimates narrowed by 3% over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 11.43%.
Anika’s earnings estimates for 2017 were up 3.9% in the last 60 days. The company has recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price gained 28.3% in 2016.