Skip to Content
Morningstar
Get 14 Days Free

Vertex Pharmaceuticals Inc VRTX

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Vertex Tumbles After Shelving VX-864; Minimal Impact on Our $259 FVE, Shares Undervalued

Rachel Elfman Equity Analyst

Analyst Note

| Rachel Elfman |

Vertex announced it is shelving VX-864, an experimental drug for Alpha-1 Antitrypsin Deficiency, after disclosing that the magnitude of treatment effect observed in its phase 2 study is unlikely to translate into substantial clinical benefit. However, this development has minimal impact on our fair value estimate because we had accounted for only 10% probability of the drug being approved in our valuation model. We maintain our $259 fair value estimate and narrow moat. Shares dropped over 10% as investors reacted negatively to the announcement. However, the decline in Vertex's share price presents an opportunity for long-term investors as we view shares as undervalued, currently trading in 4-star territory.

Read Full Analysis

Company Profile

Business Description

Vertex Pharmaceuticals is a global biotechnology company that discovers and develops small-molecule drugs for the treatment of serious diseases. Its key drugs are Kalydeco, Orkambi, Symdeko, and Trikafta for cystic fibrosis, where Vertex therapies remain the standard of care globally. In addition to its focus on cystic fibrosis, Vertex’s pipeline includes gene-editing therapies such as CTX001 for beta-thalassemia and sickle-cell disease as well as small-molecule medicines targeting diseases associated with alpha-1 antitrypsin deficiency and APOL1-mediated kidney disease. Vertex also has an expanding research pipeline focused on inflammatory diseases, non-opioid treatments for pain, and genetic and cell therapies for type 1 diabetes and rare diseases.

Contact
50 Northern Avenue
Boston, MA, 02210
T +1 617 341-6100
Sector Healthcare
Industry Biotechnology
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 3,400

Related

Our Picks
33 Undervalued Stocks for the Third Quarter
Here are our analysts' top ideas in each sector for the coming quarter.
Susan Dziubinski
Quarter-End Insights
Drugmakers, Biotech Pressured by Policy Risk, but We Don't Expect Big Regulatory Changes
We also expect a return to more elective procedures.
Damien Conover
Our Picks
10 Promising Stocks to Consider
These companies are growing their competitive advantages--and their stocks are undervalued.
Susan Dziubinski
Fund Spy
Digging Into Fidelity Contrafund
We reveal how the fund’s underlying holdings stack up on 11 measures of equity-related risk.
Amy C. Arnott
Premium Article
5 Stocks With More Room to Run
Premium Exclusive: These stocks have momentum on their side yet still look undervalued by our metrics.
Susan Dziubinski
US Videos
We See This Firm Emerging as a Rare-Disease Powerhouse
Vertex Pharmaceutical's monopoly in the cystic fibrosis market forms the basis of our narrow-moat rating, and we expect that moat to continue to grow.
Kelsey Tsai
Our Picks
5 Stocks With More Room to Run
These stocks have gained twice as much as the S&P 500 in 2017 yet remain undervalued according to our metrics.
Susan Dziubinski
Stock Strategist
Vertex Is a Rare-Disease Powerhouse
The shares currently look undervalued ahead of further drug approval.
Kelsey Tsai
US Videos
Weekly Wrap: Utilities Still Have Opportunity
Trump's review of the Clean Power Plan shouldn't alter the long-term move toward natural gas and renewables. Plus, active management shakeup at BlackRock, and Vertex soars after trial.
Morningstar.com
Stock Analyst Update
Even After Rally, Vertex Undervalued
Shares soared following favorable news from the narrow-moat drugmaker's pivotal trials, yet we see further upside.
Kelsey Tsai
Stock Analyst Update
Why We're Still Bullish on Vertex Despite Low Guidance
The market is underestimating Vertex's entrenched position in the cystic fibrosis market supported by a robust pipeline of next-generation products.
Kelsey Tsai
Fund Spy
The Year in U.S. Equity Funds: Resilient in a Tumultuous 2016
In a year of unexpected events, U.S. stocks rose again with small caps outperforming for the first time since 2013.
Andrew Daniels
Investing Specialists
Morningstar Runs the Numbers
We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended Oct. 15.
Morningstar.com
Stock Analyst Update
Vertex: News Creates Opportunity in Shares
Despite a slowdown in Orkambi refills, this narrow-moat drugmaker's burgeoning cystic fibrosis portfolio should create a dominant franchise in this lucrative rare disease market.
Kelsey Tsai
Fund Times
Stock Picks from Morningstar Analysts
A trio of Morningstar analysts share their outlooks for and opportunities in the healthcare, consumer, and basic materials sectors.
Susan Dziubinski
US Videos
The Picks Panel: Best Ideas From Morningstar Analysts
Whether you need to fill a hole in your retirement portfolio or want to find a world-class company at a bargain-basement stock price, a trio of Morningstar specialists share their shopping lists of topnotch candidates.
Morningstar.com
Our Picks
Picks from Morningstar's Senior Researchers
Morningstar's Russ Kinnel, Ben Johnson, and Elizabeth Collins discuss their favorite investment ideas among mutual funds, ETFs, and stocks.
Christine Benz
US Videos
We Think This Narrow-Moat Biotech Is Cheap
With an increasingly dominant position in cystic fibrosis, Vertex’s competitive position is strong, and the stock's sell-off has been unwarranted.
Stefan Quenneville, CFA
Stock Strategist
We See Value in Vertex
A strong competitive position in the cystic fibrosis market gives the firm a narrow moat.
Stefan Quenneville, CFA
US Videos
A Good Time to Get Into Biotech
Some high-quality biotech names are trading at substantial discounts, as the market reacts to near-term concerns over pricing and biosimilar competition.
Stefan Quenneville, CFA

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.