Vertex Beats Quarterly Forecasts, But Its Pipeline Remains Key

Vertex stock ticked higher Monday after beating first quarter expectations, but the company’s next-generation cystic fibrosis treatment remains key, says one expert.

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Although Vertex Pharmaceuticals (VRTX) is the de facto leader of the market for cystic fibrosis drugs, the company is still developing new treatments. Notable among those is a new triple regimen it calls vanzacaftor.

David Song, an investment partner at Tema ETFs, says vanzacaftor could further bolster Vertex’s sales as the company’s older medicines give way to the current triple regimen, Trikafta. Tema holds Vertex stock in its Obesity and Cardiometabolic (HRTS) exchange-traded fund and the Tema Neuroscience and Mental Health (MNTL) ETF.

“Over the next 12 to 18 months, investors are evaluating whether Vertex can sustain its CF franchise for several years and expand upon it through internal pipeline development, as well as business development,” he said in an email to Investor’s Business Daily.

In after-hours trading on today’s stock market, Vertex stock edged up 0.6% to 405. Shares are forming a flat base with a buy point at 448.40, according to MarketSurge. But the biotech stock remains below its 50-day line.

Vertex Stock Rises, But Pipeline Is Key

Vertex has already asked the Food and Drug Administration and the European Medicines Agency to approve vanzacaftor for cystic fibrosis patients. The company is also planning to submit a request for approval of its moderate-to-severe acute pain treatment this quarter.

RBC Capital Markets analyst Brian Abrahams noted Vertex has also resumed testing a type 1 diabetes treatment after two patients died. A committee of independent experts determined the deaths weren’t due to the treatment. Vertex has also restarted testing a treatment for myotonic dystrophy following an earlier clinical hold.

“Pipeline largely remains on track,” he said in a report.

Abrahams has a sector perform rating and 417 price target on Vertex stock.

First Quarter Beat, Reiterated Outlook

Overall, Vertex earned an adjusted $4.76 per share on $2.69 billion in sales during the first quarter. Earnings rocketed 56% while sales climbed 13%. Both beat expectations for $4.08 per share and $2.58 billion, respectively.

Trikafta generated the lion’s share of sales. Older products for cystic fibrosis generated $207 million in sales, falling 26%. More patients are switching to Trikafta from the older medicines.

For the year, the company reiterated its outlook for $10.55 billion to $10.75 billion in sales of its drugs. Vertex stock analysts projected $16.52 earnings per share and $10.71 billion in sales.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

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