Vertex Pharmaceuticals (VRTX) is a biotechnology company that has multiple medicines approved by the U.S. Food and Drug Administration (FDA) for the treatment of cystic fibrosis (CF), in addition to other clinical and research programs in CF that are currently ongoing.

In the first quarter, the company posted net product revenues of $1.7 billion, up 14% year-over-year with a non-GAAP diluted net income of $2.98 per share, an increase of 16% year-over-year.

Last week, Vertex gave two key updates regarding VX-864 and the CTX001 program.


Last week, Vertex said that the company’s drug, VX-864, intended to treat a rare, genetic disease, Alpha-1 Antitrypsin Deficiency (AATD), was well-tolerated in a Phase 2 proof-of-concept study.

The company stated in its press release, “These data provide clear evidence that an oral small molecule corrector designed to promote the proper folding of the mutant Z-AAT protein can increase plasma levels of fAAT [alpha-1 antitrypsin] in patients with AATD. Although results provide proof-of-mechanism, the magnitude of treatment effect observed in this study is unlikely to translate into substantial clinical benefit.”

As a result, VRTX will not advance the drug VX-864 into late-stage development. However, the company will “advance additional novel small molecule correctors with the potential for increased clinical efficacy into the clinic.” (See Vertex Pharmaceuticals stock analysis on TipRanks)

Following this development, Oppenheimer analyst Hartaj Singh reiterated a Buy with a price target of $305 (61.4% upside) on the stock. Singh said in a note to investors, “The key question to consider with future VX-864 development is whether the company can get potent molecules into the liver in high concentrations. Since the company was able to mitigate the molecule-specific safety issue seen with VX-814 (10/20) with VX-864, we are optimistic the company can achieve its AATD objectives.”

CTX001 Program

CTX001 is an investigational gene-editing therapy program developed along with CRISPR Therapeutics (CRSP) that is being assessed for patients suffering from transfusion-dependent beta-thalassemia (TDT) and severe sickle cell disease (SCD).

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Last week, the company announced new data regarding 22 patients with more than three months follow-up treatment, ranging in age from 4 months to 26 months, who were treated with CTX001. The results indicated a sustained and consistent response to treatment.

CTX001 is being evaluated in two Phase 1 clinical trials currently. In total, around 40 patients have received doses across both studies so far.

Analyst Singh commented, “If we strip out the pipeline (CTX-001 in our model), we get a CF franchise value of $180 to $220/share. We believe that CTX-001 and other pipeline projects are worthy of a premium multiple and stay bullish.”

Following these two key updates, shares of VRTX have tanked 10.5% in the past five days. However, Singh expects that with more clinical and regulatory updates for the company’s other drugs in the pipeline, “VRTX has non-trivial catalysts upcoming.”

The analyst added, “Combined with as yet consistently unmatched sales/earnings trajectory from CF, we expect the stock to re-rate positively in 2021. We expect savvy investors to be buyers on extended weakness.”

Consensus among analysts on Wall Street is a Strong Buy based on 19 Buys and 5 Holds. The average analyst VRTX price target of $261.68 implies approximately 38.5% upside potential to current levels.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

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