Vertex Pharmaceuticals (VRTX) beat Wall Street’s third-quarter expectations late Monday, but an analyst says Vertex stock needs more than that “to drive another leg of stock upside.”
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This year, Vertex expects to launch a next-generation treatment for cystic fibrosis and a treatment for moderate-to-severe pain. The Food and Drug Administration will make approval decisions on those two drugs in January.
“We still believe pipeline success would be needed to drive another leg of stock upside and have less confidence in appreciation potential from upcoming readouts, though continued CF performance will likely reaffirm to the market that the high-margin, long-duration, core franchise continues to justify a premium,” RBC Capital Markets analyst Brian Abrahams said in a report.
In after-hours trades, Vertex stock rose nearly 1% to 477.13. Shares are forming a flat base with a buy point at 510.63, according to MarketSurge.
Vertex Stock: Casgevy Contribution
During the September quarter, Vertex earned an adjusted $4.38 per share on $2.77 billion in sales. Earnings climbed more than 7% and beat forecasts for $4.08 a share. Sales rose 12% to $2.77 billion, beating expectations for $2.69 billion, according to FactSet.
The lion’s share of the sales came from Trikafta, Vertex’s latest-generation CF treatment. Sales easily topped expectations at nearly $2.59 billion.
Other products, including Vertex’s Crispr Therapeutics (CRSP)-partnered gene-editing treatment for sickle cell disease and beta thalassemia, brought in $187 million. Analysts expected $184 million from Vertex’s other products.
The sickle cell and beta thalassemia drug, Casgevy, costs about $1.6 million per patient, Piper Sandler analyst Christopher Raymond said in a report. But Vertex doesn’t break out which sales came from Casgevy and which came from other cystic fibrosis drugs like Kalydeco, Orkambi and Symdeko.
For the year, Vertex raised its sales outlook to $10.8 billion to $10.9 billion. Analysts called for earnings of 33 cents a share and $10.76 billion in sales.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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