VRTX - Embedded Expectations Analysis - 2019 11 19
Vertex Pharmaceuticals (VRTX:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 28.1x Uniform P/E. At these levels, the market is pricing in expectations for stable profitability, but management may be concerned about legislation, revenue, and product strength.Specifically, management is confident they have cannibalized some of their ORKAMBI revenues, and they may lack confidence in their ability to partner with a company to enter the musculoskeletal market. Furthermore, they may be concerned about legislation which would allow drug imports from Canada, and they may lack confidence in their ability to sustain product revenue improvements. In addition, they may lack confidence in their ability to expedite the VX-445 regime approval, and they may be exaggerating the novelty of their CTX001 gene therapy. Finally, they may be concerned about the number of eligible patients for SYMDEKO.
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.
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