Company Reports

Narrow-moat Vertex announced it will acquire Alpine Immune Sciences, a biotechnology company focused on discovering protein-based immunotherapies, for $4.9 billion in cash. The acquisition will expand Vertex's kidney-disease portfolio, as Alpine's leading molecule is being evaluated as a treatment for IgA nephropathy, or IgAN, a chronic kidney condition that can lead to end-stage renal disease. There are no approved therapies that target the underlying cause of IgAN, which affects about 130,000 people in the US. However, in Phase 2 studies, povetacicept has shown potential best-in-class efficacy in IgAN. We like that povetacicept is on track to enter Phase 3 clinical trials in the second half of 2024.

Vertex ended 2023 in a strong position thanks to strong uptake of its cystic fibrosis triple combination therapy, Trikafta/Kaftrio, which accounted for 91% total sales in 2023. Product revenue of $9.87 billion represented an 11% increase compared with 2022. In addition, Vertex’s diverse pipeline in disease areas outside of cystic fibrosis is making significant advancements. Vertex is on track to submit two new drug applications to the U.S. Food and Drug Administration by mid-2024 for both VX-548 in acute pain and vanzacaftor triple in cystic fibrosis. We have increased our estimated probabilities of approval for these pipeline candidates to 65% in our base case and raised our fair value estimate to $343 per share from $314. Vertex’s lengthy patent protections extending to 2037 and first-mover status in the lucrative cystic fibrosis market continue to support its narrow economic moat rating while also providing ample cash flow to support the development of its broad pipeline.

Vertex Pharmaceuticals was known for discovering blockbuster hepatitis C drug Incivek, which is now overshadowed by the company's robust cystic fibrosis franchise. Vertex's approved cystic fibrosis drugs—Kalydeco, Orkambi, Symdeko, and Trikafta—will make the firm eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

Vertex reported third-quarter results highlighted by strong uptake of its cystic fibrosis triple combination therapy, Trikafta/Kaftrio, in the United States and internationally. Quarterly product revenue of $2.48 billion represented a 6% increase from the prior-year period. Vertex’s results are tracking our expectations, and we maintain our fair value estimate of $314 per share.

Vertex Pharmaceuticals reported strong second-quarter results driven by the continued robust uptake of its cystic fibrosis triple-combination therapy, Trikafta/Kaftrio. Product revenue of $2.49 billion represented a 14% increase from the prior-year period. Management raised its 2023 revenue guidance by 1.3% at the midpoint to reflect strong demand for Trikafta/Kaftrio across multiple countries. We have raised our fair value estimate to $314 per share from $306 to reflect Vertex’s strong performance.

Vertex Pharmaceuticals was known for discovering blockbuster hepatitis C drug Incivek, which is now overshadowed by the company's robust cystic fibrosis franchise. Vertex's approved cystic fibrosis drugs—Kalydeco, Orkambi, Symdeko, and Trikafta—will make the firm eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

Vertex reported healthy first-quarter results driven by continued robust demand for its cystic fibrosis triple-combination therapy, Trikafta/Kaftrio. Quarterly product revenue of $2.37 billion represented a 13% increase from the prior-year period. Vertex is tracking our expectations, and we maintain our fair value estimate of $306 per share and view shares as fairly valued. Vertex’s lengthy patent protections and first-mover status in the lucrative cystic fibrosis market continue to support its narrow economic moat. The company’s positive moat trend is based on its cystic fibrosis drug approvals and its diverse pipeline that continues to make progress.

Vertex Pharmaceuticals, which was once known for discovering Incivek, a blockbuster hepatitis C drug is now overshadowed by a robust cystic fibrosis (CF) franchise. Vertex's approved cystic fibrosis drugs are Kalydeco, Orkambi, Symdeko, and Trikafta, which will make Vertex eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

Vertex reported strong fourth-quarter results driven by robust performance of its cystic fibrosis, or CF, drugs. Fourth-quarter revenue was over $2.3 billion, and fiscal 2022 revenue exceeded $8.9 billion, representing an 18% increase from the previous year. We don’t anticipate a significant change to our fair value estimate of $306 per share, and we view shares as currently fairly valued. Vertex’s lengthy patent protections and first-mover status in the lucrative cystic fibrosis market continue to support its narrow economic moat rating. We maintain Vertex’s positive moat trend rating based on its CF drug approvals and its diverse pipeline that continues to make progress, with multiple clinical milestones expected in 2023.

Vertex Pharmaceuticals, which was once known for discovering Incivek, a blockbuster hepatitis C drug is now overshadowed by a robust cystic fibrosis franchise. Vertex's approved cystic fibrosis drugs are Kalydeco, Orkambi, Symdeko, and Trikafta, which will make Vertex eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

Vertex continues to report strong performance in its cystic fibrosis (CF) business and solid progress for its developing pipeline. The company reported third-quarter results highlighted by $2.3 billion in revenue, representing an 18% increase from the prior year period. Management raised its 2022 revenue guidance by nearly 2% at the midpoint thanks to continued robust demand for its key cystic fibrosis triple combination therapy Trikafta/Kaftrio. Vertex’s pipeline candidates are also continuing to make progress. After adjusting our near-term forecasts to reflect the strong uptake of Trikafta/Kaftrio both within and outside of the U.S., we now forecast $8.9 billion in cystic fibrosis revenue this year. We raised our fair value estimate to $306 per share from $293. We view shares as fairly valued, currently trading in 3-star territory. We maintain our Narrow Moat and positive trend ratings, which are supported by Vertex’s strong intangible assets and diverse pipeline.

Vertex was once known for discovering Incivek, a blockbuster hepatitis C drug now overshadowed by a robust cystic fibrosis franchise with megablockbuster potential. The company's approved cystic fibrosis drugs are Kalydeco, Orkambi, Symdeko, and Trikafta, which will make Vertex eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

Vertex reported solid second-quarter results highlighted by nearly $2.2 billion in revenue, representing a 22% increase from the prior-year period. Management raised its 2022 revenue guidance by about 2% at the midpoint thanks to strong demand for key cystic fibrosis triple combination therapy Trikafta/Kaftrio. Vertex’s pipeline candidates continue to make progress and are tracking our expectations. After slightly adjusting our near-term forecasts to account for stronger Trikafta sales, we forecast Vertex will achieve $8.7 billion in cystic fibrosis revenue this year, and we maintain our fair value estimate of $293 per share as our long-term outlook remains unchanged. We view shares as fairly valued, currently trading in 3-star territory. We maintain our narrow economic moat and positive trend ratings, which are supported by Vertex’s intangible assets and diverse pipeline.

The likelihood of drug-pricing policy changes in the United States changed dramatically over the course of July, and we are now assessing the impact of the various measures included in the Inflation Reduction Act of 2022 in our Big Biopharma valuation models. Assuming the bill is eligible to pass via reconciliation (the Senate parliamentarian is reviewing the bill), we think Democrats will be able to pass the Senate bill, paving the way for it to be signed into law. Overall, we don’t expect major changes to our fair value estimates or moat ratings, as the changes net out to a moderate negative that we believe is manageable, likely through a combination of cost-cutting, agreements with generic firms for limited authorized generic launches (to avoid the list for negotiated drugs), and higher launch prices (to counter pressure on price increases and earlier declines due to negotiation).

Morningstar now directly incorporates cost-effectiveness analysis into our biopharmaceutical ratings through what we're calling our capsule system. Given the lack of regulatory oversight on whether U.S. drug launch prices or price increases are justified, an independent, private organization—the Institute for Clinical and Economic Review, or ICER—has gained prominence and authority assessing cost-effectiveness. Drugs that are priced above ICER's cost-effectiveness thresholds or that record high unsupported price increases contribute to Morningstar's ESG Risk Rating Assessment and equity research methodology for incorporating environmental, social, and governance risk into our fair value estimates and moat and uncertainty ratings.

Vertex was once known for discovering Incivek, a blockbuster hepatitis C drug now overshadowed by a robust cystic fibrosis franchise with megablockbuster potential. The company's approved cystic fibrosis drugs are Kalydeco, Orkambi, Symdeko, and Trikafta, which will make Vertex eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

Vertex reported strong first-quarter results highlighted by nearly $2.1 billion in product revenue, representing a 22% increase from the prior year period. We’ve updated our valuation model, and we maintain our fair value estimate of $293 per share and continue to view shares as undervalued. The stock is currently trading in 4-star territory about 14% below our fair value estimate. We maintain our narrow economic moat and positive trend ratings, which are supported by intangible assets and its diversified pipeline spanning six disease areas.

Vertex was once known for discovering Incivek, a blockbuster hepatitis C drug now overshadowed by a robust cystic fibrosis franchise with megablockbuster potential. The company's approved cystic fibrosis drugs are Kalydeco, Orkambi, Symdeko, and Trikafta, which will make Vertex eligible to treat about 90% of the CF population, assuming international and pediatric approvals. We expect Vertex to maintain its dominant position in CF, given the strong efficacy of its therapies, lengthy patents, and lack of competition, while developing pipeline candidates in other rare indications to spur growth.

We’ve updated our forecasts for Vertex Pharmaceuticals to reflect a more robust outlook for its gene-editing pipeline candidate, CTX001, in partnership with CRISPR Therapeutics for two blood diseases – transfusion-dependent beta thalassemia (TDT) and sickle cell disease (SCD). We’ve raised our fair value estimate to $293 per share from $276 and maintain our narrow moat and positive trend ratings. We view Vertex as an attractive opportunity trading at an 11% discount to our $293 fair value estimate.

Vertex reported strong fourth-quarter results driven by continued robust performance of its cystic fibrosis drugs (CF). Fourth-quarter revenue was just over $2 billion, and fiscal 2021 revenue was over $7.5 billion, representing a 22% increase from the previous year. After updating our valuation model, we maintain our fair value estimate of $276 per share and continue to view shares as very undervalued. Vertex’s lengthy patent protections extending as far as year 2037 and first-mover status in the lucrative cystic fibrosis market support its narrow economic moat rating.