Vertex Pharmaceuticals issued a bullish 2022 outlook Thursday, leading VRTX stock to approach a 12-month high.
The company expects its cystic fibrosis treatments to generate $8.4 billion to $8.6 billion in sales this year. The guidance was well above analyst forecasts for $8.2 billion in sales. Now, investors are eagerly awaiting news from Vertex's non-cystic fibrosis pipeline.
Maxim Group analyst Naz Rahman notes Vertex has managed to maintain its value despite recent pressure on biotech stocks. To that point, VRTX stock has climbed nearly 4% this year as the broader group of biotech stocks has fallen off almost 22%.
"In an environment where most biotech stocks have declined precipitously, Vertex has returned to its valuation range where we see the (cystic fibrosis) opportunity priced into shares," Rahman said in a note to clients. He has a hold rating on VRTX stock.
VRTX Stock: Sales, Earnings Top
On today's stock market, VRTX stock rose a fraction to 228.22.
During the fourth quarter, Vertex sales climbed 27% to $2.07 billion. Its triple regimen, known as Trikafta in the U.S., generated the lion's share of sales at $1.69 billion. Roughly nine in 10 patients with cystic fibrosis can take Trikafta.
Meanwhile, sales of other cystic fibrosis products are falling as more patients switch to Trikafta.
Overall, sales beat VRTX stock analysts' call for $2 billion. Adjusted earnings soared 34% to $3.37 per share and topped expectations by 8 cents.
Next Steps For Vertex
The key focus now for Vertex is its pipeline which includes a next-generation cystic fibrosis triple regimen and other diseases outside its bread-and-butter cystic fibrosis segment. In the latter area, Vertex is working on a treatment for a severe kidney disease related to mutations in the APOL1 gene. In December, Vertex unveiled promising results from a Phase 2 study.
Next, the biotech company will meet with the Food and Drug Administration to determine how to run late-stage testing. Vertex said it plans to do so this quarter. It's possible the company could use protein levels in the urine to measure the effectiveness of its drug, analysts said. That could lead to an accelerated approval for some patients.
RBC Capital Markets analyst Brian Abrahams sees the full population of patients with the disease as a $2.4 billion opportunity. He has an outperform rating on VRTX stock, and raised his price target by 1 to 269.
"Though only limited pipeline updates were provided, we expect additional important datapoints to emerge this year," he said in his note to clients.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
