Investors in VRTX stock are closely watching Vertex Pharmaceuticals' efforts in pain treatment, analysts said Tuesday after the biotech company reported mixed third-quarter results.
During the quarter, the company's bread-and-butter cystic fibrosis drug, Trikafta, brought in $2.27 billion in sales. That missed some estimates for $2.33 billion, though was in line with others. But Vertex's other cystic fibrosis drugs definitively missed predictions at $209.2 million. Analysts called for $228 million to $229 million, according to various reports.
Vertex's late-stage pipeline is more important than ever as the company's portfolio of CFTR modulators for cystic fibrosis matures, RBC Capital Markets analyst Brian Abrahams said in a report.
Leerink Partners analyst David Risinger expects the company to approach pain treatment the same way it does cystic fibrosis. Vertex will present the results of a study testing its pain drug in diabetic peripheral neuropathy before year-end, and has an acute pain study underway with results due in early 2024. But, notably, Vertex also has two additional pain treatment candidates in earlier-stage testing.
"This confirms the company's serial innovation strategy," Risinger said in a report. "Vertex intends to continue to lead in small molecule sodium channel inhibitor development for pain like it has consistently led to CFTR modulators for cystic fibrosis."
Risinger kept his outperform rating on VRTX stock, but RBC's Abrahams has a sector perform rating.
VRTX Stock: A 'Fine' Quarter
On today's stock market, Vertex stock fell 2% to 378.25. Vertex is an IBD Tech Leader.
Shares took a hit following a "fine" quarter, Piper Sandler analyst Christopher Raymond said in a note.
Total product sales climbed 6.4% to $2.48 billion, while adjusted earnings rose 1.7% to $4.08 per share. Earnings beat projections for $3.92 a share, according to FactSet. Sales were soft. Abrahams expected about $2.5 billion, while Piper Sandler's Raymond had estimates at $2.5 billion to $2.51 billion.
Most of the miss was due to Vertex's suite of older cystic fibrosis treatments.
"No big deal in our view, and we are heartened that fiscal year 2023 revenue guidance was raised," Piper Sandler's Raymond said.
For the year, Vertex now expects sales of its cystic fibrosis treatments to come in at $9.85 billion, above its prior estimate for $9.7 billion to $9.8 billion. VRTX stock analysts forecast earnings of $13.59 a share and $9.2 billion in total sales.
Late-Stage Pipeline In Focus
Analysts are now looking ahead to Vertex's late-stage pipeline.
Piper Sandler's Raymond noted Vertex is also testing a next-generation CFTR modulator for patients with cystic fibrosis. Test results are expected in early 2024.
Further, Vertex is approaching a potential approval with Crispr Therapeutics in December for a gene-editing treatment for sickle cell disease.
The company has a "slew of other pipeline readouts into 2025," he said. The "thesis remains the same — it's all about the pipeline."
Bearishly, Vertex unexpectedly scrapped development of a potential liver disease treatment after it caused some patients in early-stage testing to develop a rash.
The company also says it needs to run further lab and animal testing of a gene-editing treatment for Duchenne muscular dystrophy before testing it in people.
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