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Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported adjusted earnings per share (EPS) of $3.89 in second-quarter 2023, beating the Zacks Consensus Estimate of $3.85. The adjusted EPS rose 8% year over year driven by strong growth in product revenues. The upside was partially offset by higher research and development expenses incurred during the quarter.
The company reported total revenues of $2.49 billion, comprising entirely of cystic fibrosis (“CF”) product revenues. The figure surpassed the Zacks Consensus Estimate of $2.41 billion. Total revenues rose 14% year over year, primarily driven by higher international sales of Trikafta (marketed as Kaftrio in Europe).
Quarter in Detail
The company markets four CF products — Trikafta/Kaftrio, Symdeko (marketed as Symkevi in Europe), Orkambi and Kalydeco.
CF product sales rose 7% year over year in the United States to $1.51 billion, while sales outside the United States surged 26% to $985 million.
Trikafta generated sales worth $2.24 billion, up 18.3% year over year. The upside was driven by the strong uptake in international markets and expanded use (aged between two and five years) in children with CFin the United States. Trikafta sales beat the Zacks Consensus Estimate and our model estimate of $2.17 billion and $2.15 billion, respectively.
Sales from other CF products, namely Symdeko/Symkevi, Kalydeco and Orkambi, were down 16.6% year over year to $252.8 million. Sales of these drugs were hurt by patients switching to Trikafta.
Costs Rise
Adjusted research and development (R&D) expenses rose 37.6% from the year-ago quarter’s levels to $708.4 million due to the expansion of the company’s mid- and late-stage pipeline.
Adjusted selling, general and administrative (SG&A) expenses increased 26.7% to $219.6 million in the reported quarter due to expenses for CF launches and pre-commercial activities for exa-cel.
During the fourth quarter, Vertex recorded acquired IPR&D costs of $110.5 million compared with $61.9 million in the year-ago quarter.
Raises 2023 Guidance
Based on the solid uptake of Trikafta/Kaftrio observed worldwide, Vertex raised its 2023 guidance. Management expects total revenues from CF products in the range of $9.7-$9.8 billion compared with the prior expectation of $9.55-$9.70 billion. The raised guidance for 2023 suggests a 9-10% year-over-year growth,
For the full year, management expects to record adjusted combined R&D, Acquired IPR&D and SG&A expenses in the band of $4.1-$4.2 billion compared with the previous guidance of $3.9-$4.0 billion. This upside can be attributed to increased IPR&D expenses following new business developments in the non-CF pipeline.
The adjusted tax rate is expected in the range of 21-22% (maintained).
Shares were up in the after-market trading on Aug 1, post the earnings announcement. This was due to the increased guidance and better-than-expected earnings results.
In the year so far, the stock has risen 20.4% against the industry’s 11.3% fall.
Image Source: Zacks Investment Research
Pipeline & Other Updates
Apart from CF, Vertex is rapidly advancing its mid- and late-stage pipeline which comprises candidates across eight indications. Six of the programs are past the proof-of-concept stage.
Vertex is co-developing gene-editing treatment exagamglogene autotemcel (“exa-cel”), in partnership with CRISPR Therapeutics (CRSP - Free Report) targeting two devastating diseases — transfusion-dependent beta thalassemia (TDT) and sickle cell disease (SCD). This June, Vertex and CRISPR Therapeutics announced that the FDA accepted the biologics license application (BLA) submissions seeking approval for exa-cel in SCD and TDT indications and a final decision is expected by Dec 8, 2023, and Mar 30, 2024, respectively. CRISPR Therapeutics and Vertex have filed similar regulatory submissions for exa-cel in Europe, which were validated this January. Management expects the CRSP-partnered exa-cel to be its next commercial launch.
Vertex continues to enroll study participants in the ongoing pivotal phase III study evaluating its non-opioid NaV1.8 inhibitor VX-548 as a potential treatment for moderate to severe acute pain following bunionectomy or abdominoplasty surgery. Management expects to complete the pivotal studies before this year’s end. VX-548 is also being evaluated in a mid-stage study in patients with diabetic peripheral neuropathy, a form of peripheral neuropathic pain. Data from all these studies are expected by late 2023 or early 2024.
In the past 30 days, estimates for J&J’s 2023 earnings per share have increased from $10.66 to $10.73. During the same period, the earnings estimates per share for 2024 have risen from $11.01 to $11.28. Shares of J&J are down 4.4% in the year-to-date period.
Earnings of J&J beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.58%. In the last reported quarter, J&J’s earnings beat estimates by 7.28%.
In the past 30 days, the estimate for Novartis’ 2023 and 2024 EPS have increased from $6.74 to $6.89 and $7.28 to $7.45, respectively. Shares of Novartis are up 13.9% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 6.56%. Novartis’ earnings beat estimates by 8.93%.
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Vertex (VRTX) Beats on Q2 Earnings & Sales, Raises '23 View
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported adjusted earnings per share (EPS) of $3.89 in second-quarter 2023, beating the Zacks Consensus Estimate of $3.85. The adjusted EPS rose 8% year over year driven by strong growth in product revenues. The upside was partially offset by higher research and development expenses incurred during the quarter.
The company reported total revenues of $2.49 billion, comprising entirely of cystic fibrosis (“CF”) product revenues. The figure surpassed the Zacks Consensus Estimate of $2.41 billion. Total revenues rose 14% year over year, primarily driven by higher international sales of Trikafta (marketed as Kaftrio in Europe).
Quarter in Detail
The company markets four CF products — Trikafta/Kaftrio, Symdeko (marketed as Symkevi in Europe), Orkambi and Kalydeco.
CF product sales rose 7% year over year in the United States to $1.51 billion, while sales outside the United States surged 26% to $985 million.
Trikafta generated sales worth $2.24 billion, up 18.3% year over year. The upside was driven by the strong uptake in international markets and expanded use (aged between two and five years) in children with CFin the United States. Trikafta sales beat the Zacks Consensus Estimate and our model estimate of $2.17 billion and $2.15 billion, respectively.
Sales from other CF products, namely Symdeko/Symkevi, Kalydeco and Orkambi, were down 16.6% year over year to $252.8 million. Sales of these drugs were hurt by patients switching to Trikafta.
Costs Rise
Adjusted research and development (R&D) expenses rose 37.6% from the year-ago quarter’s levels to $708.4 million due to the expansion of the company’s mid- and late-stage pipeline.
Adjusted selling, general and administrative (SG&A) expenses increased 26.7% to $219.6 million in the reported quarter due to expenses for CF launches and pre-commercial activities for exa-cel.
During the fourth quarter, Vertex recorded acquired IPR&D costs of $110.5 million compared with $61.9 million in the year-ago quarter.
Raises 2023 Guidance
Based on the solid uptake of Trikafta/Kaftrio observed worldwide, Vertex raised its 2023 guidance. Management expects total revenues from CF products in the range of $9.7-$9.8 billion compared with the prior expectation of $9.55-$9.70 billion. The raised guidance for 2023 suggests a 9-10% year-over-year growth,
For the full year, management expects to record adjusted combined R&D, Acquired IPR&D and SG&A expenses in the band of $4.1-$4.2 billion compared with the previous guidance of $3.9-$4.0 billion. This upside can be attributed to increased IPR&D expenses following new business developments in the non-CF pipeline.
The adjusted tax rate is expected in the range of 21-22% (maintained).
Shares were up in the after-market trading on Aug 1, post the earnings announcement. This was due to the increased guidance and better-than-expected earnings results.
In the year so far, the stock has risen 20.4% against the industry’s 11.3% fall.
Image Source: Zacks Investment Research
Pipeline & Other Updates
Apart from CF, Vertex is rapidly advancing its mid- and late-stage pipeline which comprises candidates across eight indications. Six of the programs are past the proof-of-concept stage.
Vertex is co-developing gene-editing treatment exagamglogene autotemcel (“exa-cel”), in partnership with CRISPR Therapeutics (CRSP - Free Report) targeting two devastating diseases — transfusion-dependent beta thalassemia (TDT) and sickle cell disease (SCD). This June, Vertex and CRISPR Therapeutics announced that the FDA accepted the biologics license application (BLA) submissions seeking approval for exa-cel in SCD and TDT indications and a final decision is expected by Dec 8, 2023, and Mar 30, 2024, respectively. CRISPR Therapeutics and Vertex have filed similar regulatory submissions for exa-cel in Europe, which were validated this January. Management expects the CRSP-partnered exa-cel to be its next commercial launch.
Vertex continues to enroll study participants in the ongoing pivotal phase III study evaluating its non-opioid NaV1.8 inhibitor VX-548 as a potential treatment for moderate to severe acute pain following bunionectomy or abdominoplasty surgery. Management expects to complete the pivotal studies before this year’s end. VX-548 is also being evaluated in a mid-stage study in patients with diabetic peripheral neuropathy, a form of peripheral neuropathic pain. Data from all these studies are expected by late 2023 or early 2024.
Vertex Pharmaceuticals Incorporated Price
Vertex Pharmaceuticals Incorporated price | Vertex Pharmaceuticals Incorporated Quote
Zacks Rank & Other Stocks to Consider
Vertex currently carries a Zacks Rank #2 (Buy).Some other top-ranked stocks in the overall healthcare sector include Johnson & Johnson (JNJ - Free Report) and Novartis (NVS - Free Report) , carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, estimates for J&J’s 2023 earnings per share have increased from $10.66 to $10.73. During the same period, the earnings estimates per share for 2024 have risen from $11.01 to $11.28. Shares of J&J are down 4.4% in the year-to-date period.
Earnings of J&J beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.58%. In the last reported quarter, J&J’s earnings beat estimates by 7.28%.
In the past 30 days, the estimate for Novartis’ 2023 and 2024 EPS have increased from $6.74 to $6.89 and $7.28 to $7.45, respectively. Shares of Novartis are up 13.9% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 6.56%. Novartis’ earnings beat estimates by 8.93%.