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VRTX

Vertex Pharmaceuticals NasdaqGS:VRTX Stock Report

Last Price

US$299.04

Market Cap

US$76.7b

7D

1.5%

1Y

52.7%

Updated

19 Aug, 2022

Data

Company Financials +
VRTX fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends0/6

VRTX Stock Overview

Vertex Pharmaceuticals Incorporated, a biotechnology company, engages in developing and commercializing therapies for treating cystic fibrosis.

Vertex Pharmaceuticals Incorporated Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Vertex Pharmaceuticals
Historical stock prices
Current Share PriceUS$299.04
52 Week HighUS$305.95
52 Week LowUS$176.36
Beta0.45
1 Month Change4.74%
3 Month Change15.64%
1 Year Change52.69%
3 Year Change65.97%
5 Year Change95.11%
Change since IPO6,545.33%

Recent News & Updates

Aug 05

Vertex: CF Monopoly, Looking To Expand

Vertex has seen impressive, steady and profitable growth in recent years. The company has secured the CF market, essentially controlling this market. There is much to like, albeit that the reliance on the single market is a tricky situation, with diversification efforts still having to play out. In October 2020, I concluded that shares of Vertex (VRTX) looked cheap, yet I had a few concerns at the time. The pharmaceutical company has seen some setbacks in the pipeline, yet it remained an impressive growth story. After all, the company has seen solid growth, it was very profitable, as it controlled the "CF" market, a situation which still is the case today. Former Take Late in 2020, shares of Vertex sold-off overnight from $300 to $220 per share in response to disappointing research results, thereby wiping out the entire gains for the year so far at the time. Despite the decent risk-reward based on the operating performance at the time, I feared a value-trap scenario. Shares sold off after Vertex decided to stop the Phase 2 trials of VX-814 on the back of elevated liver enzyme levels being observed, leaving the company to conclude that it was best to halt the study, as new structure should start in the first half of 2021. Founded in 1989, Vertex has been struggling for a long time as its luck changed in 2012 when the FDA approved KALYDECO for the treatment of cystic fibrosis. This life-threatening disease impacts one in every 75,000 people as a result of defective genes. The problem is that there were 2,000 mutations of this gene as KALYDECO addressed the G551D mutation, a market estimated at just 4,000 patients in the US, Europe and Asia, ORKAMBI was approved in 2015, addressing F508del mutation, much more prevalent with a patient market of 20,000. This allowed the company to post $2.5 billion in sales in 2017, as the company managed to report small profits in the meantime. With the company addressing 31,000 patients of the 75,000 target population (after approval came in for some other mutations), the cost of the treatment was high and profitability was very limited. Following further approvals the company grew sales to more than $3 billion in 2018 as operating profits rose sharply, with more label expansions coming in, as revenues surpassed the $4 billion mark in 2019 as the company guided for 2020 sales to surpass the $5 billion mark, all derived from CF drugs. The 260 million shares outstanding rose to $300 on the back of this operating momentum, for a $78 billion equity valuation, explained by the profitable and growing operations, as well as a $5.5 billion net cash position, although multiples were very demanding by all means. With shares falling to $200 overnight at the time, valuations were rapidly getting more compelling, yet the issue was that the company was still a one-trick pony on the CF market, creating real binary risks with companies like Ionis Pharmaceuticals (IONS) and Arrowhead Pharmaceuticals (ARWR) looking to enter the market as well. The situation of a monopoly, based on a limited market segment, with prices being sky-high, made me a bit cautious as regulatory and consumer scrutiny about prices has always been a factor. What Happened? In the nearly two-year time period since late 2020, shares have fallen to just below the $200 mark by the end of 2021 as shares have seen a meaningful recovery in 2022, now trading at $275 per share. Early in 2021, Vertex posted its 2020 results with revenues up 55% to $6.20 billion as net earnings were posted at $2.7 billion, just over $10 per share as net cash balances have risen to $6.6 billion. The company furthermore guided for 2021 revenues to come in at a midpoint of $6.8 billion. As it turned out, 2021 revenues rose far sharper than anticipated, with sales up 22% to $7.57 billion as adjusted earnings rose in tandem to $3.4 billion. Adjusted earnings came in at $13 per share, but excluding stock-based compensation, they ran around $11.50 per share. In the meantime, net cash balances improved further to $7.5 billion, equivalent to roughly $30 per share. In May, the company posted its first quarter results as the company maintained the midpoint of the full year sales guidance at $8.5 billion, all while cash balances surpassed the $8 billion mark. The company kept investing into other areas, including type 1 diabetes, liver diseases, among others, hoping to start diversifying the business. The company announced a bolt-on deal in July as it will acquire ViaCyte in a $320 million cash deal. ViaCyte is a privately owned biotechnology company which focuses on novel stem cell-derived cell replacement therapies for type 1 diabetes. By August, second quarter results reported quarterly revenues of $2.20 billion, as the company hiked the midpoint of the full year sales guidance to $8.7 billion.

Shareholder Returns

VRTXUS BiotechsUS Market
7D1.5%-2.0%1.4%
1Y52.7%-22.2%-8.4%

Return vs Industry: VRTX exceeded the US Biotechs industry which returned -22.2% over the past year.

Return vs Market: VRTX exceeded the US Market which returned -8.4% over the past year.

Price Volatility

Is VRTX's price volatile compared to industry and market?
VRTX volatility
VRTX Average Weekly Movement4.5%
Biotechs Industry Average Movement12.4%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: VRTX is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: VRTX's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19893,900Reshma Kewalramanihttps://www.vrtx.com

Vertex Pharmaceuticals Incorporated, a biotechnology company, engages in developing and commercializing therapies for treating cystic fibrosis. The company markets SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO to treat patients with cystic fibrosis who have specific mutations in their cystic fibrosis transmembrane conductance regulator gene; and TRIKAFTA for the treatment of patients with CF 6 years of age or older who have at least one F508del mutation. Its pipeline includes VX-864 for the treatment of AAT deficiency, which is in Phase 2 clinical trial; VX-147 for the treatment of APOL1-mediated focal segmental glomerulosclerosis, or FSGS, and other serious kidney diseases which is in Phase 2 clinical trial; VX- 880, treatment for Type 1 Diabetes which is in Phase 1/2 clinical trial; VX-548, a NaV1.8 inhibitor for treatments of acute, neuropathic, musculoskeletal pain which is in Phase 2 clinical trial; and CTX001 for the treatment severe SCD and TDT which is in Phase 3 clinical trial.

Vertex Pharmaceuticals Incorporated Fundamentals Summary

How do Vertex Pharmaceuticals's earnings and revenue compare to its market cap?
VRTX fundamental statistics
Market CapUS$76.69b
Earnings (TTM)US$3.19b
Revenue (TTM)US$8.35b

24.0x

P/E Ratio

9.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
VRTX income statement (TTM)
RevenueUS$8.35b
Cost of RevenueUS$4.33b
Gross ProfitUS$4.02b
Other ExpensesUS$828.00m
EarningsUS$3.19b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)12.46
Gross Margin48.17%
Net Profit Margin38.26%
Debt/Equity Ratio0%

How did VRTX perform over the long term?

See historical performance and comparison