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.
Why Is Vertex (VRTX) Up 0.1% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Vertex (VRTX - Free Report) . Shares have added about 0.1% in that time frame, outperforming and underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vertex due for a pullback? 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.
Vertex reported second-quarter 2018 earnings per share of 94 cents, which beat the Zacks Consensus Estimate of 72 cents. Moreover, the figure came ahead of the year-ago bottom line of 39 cents. Strong product revenues led to higher profits in the reported quarter.
Vertex reported revenues of $752.2 million in the second quarter, surpassing the Zacks Consensus Estimate of $673 million. Sales rose 38.2% year over year due to higher sales of its CF products.
CF Franchise Sales Strong
Vertex’s second-quarter revenues consisted of sales from its CF products such as Kalydeco, Orkambi and Symdeko, collaborative revenues of $1.2 million and royalty revenues of $1.1 million.
Total CF product revenues were $750 million in the second quarter, up 46% year over year, mainly driven by the rapid uptake and strong demand for its newest CF medicine, Symdeko in its first full quarter on the market. Kalydeco sales also rose in the quarter while Orkambi sales declined.
Kalydeco sales surged 33.2% to $253 million due to increase in number of eligible patient population. Kalydeco revenues for the rest of the quarters of 2018 are expected to be similar to the second quarter levels.
Orkambi (lumacaftor/ivacaftor) sales were down 4% year over year to $311 million due to a switch in patient base to Symdeko from Orkambi, which targets the same population. Orkambi revenues are expected to continue to be hurt by patient switch to Symdeko.
Symdeko contributed $186 million to the top line versus $34 million in the previous quarter. The company said that Symdeko launch is off to a strong start in the United States. Symdeko has gained broad reimbursement and coverage from private and public payers.
Vertex pointed out that demand for Symdeko has been particularly strong among the treatment-naïve F508del homozygous patients as well as those who have discontinued Orkambi treatment.
Management expects Symdeko revenues to continue to rise as additional patients start treatment. However, even if approved in EU in the second half, management does not expect to recognize significant Symdeko revenues outside of the United States in 2018.
Costs Rise
Adjusted research and development (R&D) expenses increased 17% to $281 million in the second quarter due to higher costs related to phase III development of triple combination CF regimens. Adjusted selling, general and administrative (SG&A) expenses rose 15.1% to $107 million driven by supply chain investments for triple combination regimens and costs incurred to support the launch of Symdeko.
Ups 2018 CF Product Sales Guidance
Vertex raised its CF product sales guidance for 2018 on the back of the rapid uptake of Symdeko in the first half of 2018. The company expects CF revenues in the range of $2.9 to $3.0 billion in 2018 compared to $2.65 to $2.8 billion expected previously. The midpoint of this range represents approximately 36% growth over 2017.
Combined adjusted research and development (R&D) and selling, general and administrative (SG&A) expense guidance for 2018 was maintained in the range of $1.50 to $1.55 billion.
The company is optimistic that operating margins and earnings will expand in 2018 as increase in revenues exceeds increase in costs.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 36.22% due to these changes.
VGM Scores
At this time, Vertex has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, 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
Why Is Vertex (VRTX) Up 0.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Vertex (VRTX - Free Report) . Shares have added about 0.1% in that time frame, outperforming and underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vertex due for a pullback? 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.
Vertex Q2 Earnings & Sales Beat on Strong CF Products Sales
Vertex reported second-quarter 2018 earnings per share of 94 cents, which beat the Zacks Consensus Estimate of 72 cents. Moreover, the figure came ahead of the year-ago bottom line of 39 cents. Strong product revenues led to higher profits in the reported quarter.
Vertex reported revenues of $752.2 million in the second quarter, surpassing the Zacks Consensus Estimate of $673 million. Sales rose 38.2% year over year due to higher sales of its CF products.
CF Franchise Sales Strong
Vertex’s second-quarter revenues consisted of sales from its CF products such as Kalydeco, Orkambi and Symdeko, collaborative revenues of $1.2 million and royalty revenues of $1.1 million.
Total CF product revenues were $750 million in the second quarter, up 46% year over year, mainly driven by the rapid uptake and strong demand for its newest CF medicine, Symdeko in its first full quarter on the market. Kalydeco sales also rose in the quarter while Orkambi sales declined.
Kalydeco sales surged 33.2% to $253 million due to increase in number of eligible patient population. Kalydeco revenues for the rest of the quarters of 2018 are expected to be similar to the second quarter levels.
Orkambi (lumacaftor/ivacaftor) sales were down 4% year over year to $311 million due to a switch in patient base to Symdeko from Orkambi, which targets the same population. Orkambi revenues are expected to continue to be hurt by patient switch to Symdeko.
Symdeko contributed $186 million to the top line versus $34 million in the previous quarter. The company said that Symdeko launch is off to a strong start in the United States. Symdeko has gained broad reimbursement and coverage from private and public payers.
Vertex pointed out that demand for Symdeko has been particularly strong among the treatment-naïve F508del homozygous patients as well as those who have discontinued Orkambi treatment.
Management expects Symdeko revenues to continue to rise as additional patients start treatment. However, even if approved in EU in the second half, management does not expect to recognize significant Symdeko revenues outside of the United States in 2018.
Costs Rise
Adjusted research and development (R&D) expenses increased 17% to $281 million in the second quarter due to higher costs related to phase III development of triple combination CF regimens. Adjusted selling, general and administrative (SG&A) expenses rose 15.1% to $107 million driven by supply chain investments for triple combination regimens and costs incurred to support the launch of Symdeko.
Ups 2018 CF Product Sales Guidance
Vertex raised its CF product sales guidance for 2018 on the back of the rapid uptake of Symdeko in the first half of 2018. The company expects CF revenues in the range of $2.9 to $3.0 billion in 2018 compared to $2.65 to $2.8 billion expected previously. The midpoint of this range represents approximately 36% growth over 2017.
Combined adjusted research and development (R&D) and selling, general and administrative (SG&A) expense guidance for 2018 was maintained in the range of $1.50 to $1.55 billion.
The company is optimistic that operating margins and earnings will expand in 2018 as increase in revenues exceeds increase in costs.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 36.22% due to these changes.
VGM Scores
At this time, Vertex has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Vertex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.