Morningstar | Increasing Vertex's FVE to $187 With Anticipation of Triple Combo Launch in 2020
We're raising our fair value estimate for Vertex to $187 from $183 after increasing the probability of approval of its triple combination therapy following strong data in late 2018 and early 2019. Vertex's cystic fibrosis franchise remains the key driver of our valuation, with growth coming from the continued ramp-up of Symdeko, which launched in 2018, and the potential triple combination, which could launch in 2020 if approved. Vertex's strong returns on invested capital, lengthy patents, and dominant position in the lucrative cystic fibrosis market warrant a narrow economic moat rating, supported by intangible assets.Vertex's marketed drugs, Kalydeco, Orkambi, and Symdeko, are the only disease-modifying drugs on the market, and they will likely soon be joined by the company's pipeline triple combination therapy, which could expand the eligible patient population to cover about 90% of cystic fibrosis patients if approved. This portfolio makes up the standard of care of cystic fibrosis therapy and supports strong six-figure pricing power.
The company does not have many close competitors, especially after disappointing data from Galapagos in 2018. Another competitor, Proteostasis Therapeutics, has its own doublets and triplets as well as one candidate in combination with Vertex's therapies. However, the company is years behind Vertex and reported disappointing data on March 25. The sparse competitive landscape gives us confidence in Vertex's narrow moat.
We also believe that the company benefits from a positive moat trend based on its recent approvals and promising pipeline that will likely support its dominant position in cystic fibrosis. The lack of close competition also supports the positive trend rating as it gives Vertex room to take its triple combination across the finish line and develop its pipeline assets. Its early pipeline candidates focus on rare genetic disorders, including primary ciliary dyskinesia, beta-thalassemia, and sickle-cell disease, which is in line with the company's core focus. Later-stage candidates in oncology (partnered with Merck), influenza A (partnered with Johnson & Johnson), and pain look promising and would add diversification for Vertex, strengthening its base of intangible assets.
Vertex Pharmaceuticals is focused on developing and commercializing therapies for the treatment of cystic fibrosis (CF) and developing research and development programs in other indications. The company's marketed products are TRIKAFTA (elexacaftor/tezacaftor/ivacaftor and ivacaftor), SYMDEKO/SYMKEVI (tezacaftor in combination with ivacaftor), ORKAMBI (lumacaftor in combination with ivacaftor) and KALYDECO (ivacaftor), which are approved to treat patients with CF who have specific mutations in their cystic fibrosis transmembrane conductance regulator gene. The company is evaluating CTX001, a genetic therapy as a potential treatment for sickle cell disease and beta-thalassemia.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.