VRTX - Embedded Expectations Analysis - 2020 01 31
Vertex Pharmaceuticals Incorporated (VRTX:USA) trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 29.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about growth, their Semma Therapeutics acquisition, and their treatment pipeline.Specifically, management may lack confidence in their ability to sustain operating income growth and to develop a treatment for patients suffering from hypoglycemic episodes that does not require immunosuppression. Furthermore, they may be exaggerating the growth potential of their corporate and research strategies, and the potential of their Semma Therapeutics acquisition. Management may also be exaggerating their enthusiasm surrounding the FDA's approval of TRIKAFTA, the strength of their organic and acquired medicine pipeline, and their ability to invest in innovative medicines. Furthermore, they may be overstating the global reach of their CF treatments and the benefits of CFTR modulators.
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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