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Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported adjusted earnings per share (EPS) of $3.97 in third-quarter 2023, beating the Zacks Consensus Estimate of $3.92. The adjusted EPS rose 10.6% year over year, driven by strong growth in product revenues. The upside was partially offset by higher research and development (R&D) expenses incurred during the quarter.
The company reported total revenues of $2.48 billion, comprising entirely of cystic fibrosis (CF) product revenues. The figure marginally missed the Zacks Consensus Estimate of $2.49 billion. However, total revenues rose 6.4% year over year, primarily driven by higher sales of Trikafta/Kaftrio (marketed as Kaftrio in Europe) in the U.S. and ex-U.S. markets.
In the year-to-date period, shares of Vertex have gained 33.6% against the industry’s 21% fall.
Image Source: Zacks Investment Research
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 $1.55 billion, while sales outside the United States increased 6% to $929 million.
Trikafta generated sales worth $2.27 billion, up 13.1% year over year. The upside was driven by the continued robust performance of Trikafta in the United States, fueled by label expansions to younger age groups (two to five years old). In the ex-U.S. markets, the drug also continues to witness strong uptake with recently achieved reimbursements. Trikafta sales beat the Zacks Consensus Estimate and our model estimate of $2.26 billion and $2.2 billion, respectively.
Sales from other CF products, namely Symdeko/Symkevi, Kalydeco and Orkambi, were down 35.4% year over year to $209.2 million. Sales of these drugs were hurt by patients switching to Trikafta.
Costs Rise
Adjusted R&D expenses rose 32.4% from the year-ago quarter’s levels to $726 million due to the expansion of the company’s mid- and late-stage pipeline.
Adjusted selling, general and administrative (SG&A) expenses increased 19.6% to $215.7 million in the reported quarter due to expenses for CF launches and pre-commercial activities for exa-cel.
During the reported quarter, Vertex recorded Acquired IPR&D costs of $51.7 million compared with $29 million in the year-ago quarter.
Updated 2023 Guidance
Based on the solid uptake of Trikafta/Kaftrio observed worldwide, Vertex raised its 2023 CF product revenue guidance. Management expects total revenues from CF products to be $9.85 billion compared with the prior expectation of $9.7-$9.8 billion.
The company has, however, maintained its guidance for full-year 2023 adjusted combined R&D, Acquired IPR&D and SG&A expenses in the band of $4.1-$4.2 billion.
The adjusted tax rate is expected in the range of 20-21%, which was previously expected in the band of 21-22%.
Pipeline & Other Updates
Vertex announced remaining on track to complete the pivotal SKYLINE 102 and SKYLINE 103 studies, evaluating the efficacy and safety of the vanzacaftor/tezacaftor/deutivacaftor combo, in comparison with Trikafta in patients with CF aged 12 years and olderby the end of 2023. The company’s RIDGELINE study of the same vanzacaftor triple combination therapy in children with CF aged six to 11 years is also on track to be completed by the end of the year.
This new once-a-day combination medicine has the potential for enhanced patient benefit than Trikafta patients and can potentially treat CF patients who have discontinued Trikafta or other Vertex CF medicines. The company anticipates data readout from all three studies in early 2024.
Apart from CF, VRTX is rapidly advancing its mid- and late-stage pipeline, which comprises candidates across eight indications. Seven of the programs are past the proof-of-concept stage.
The company 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). In 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. Exa-cel’s BLA for SCD enjoys the FDA’s Priority Review status.
CRISPR Therapeutics and Vertex have filed similar regulatory submissions for exa-cel in the EU and U.K., which are currently being reviewed by the respective regulatory authorities. Management expects the CRSP-partnered exa-cel to be its next commercial launch.
Vertex has also completed enrollment in its pivotal phase III study evaluating its non-opioid NaV1.8 inhibitor VX-548 as a potential treatment for moderate to severe acute pain following abdominoplasty surgery.
However, enrollment is still ongoing in the pivotal phase III study evaluating VX-548 to treat moderate to severe acute pain following bunionectomy. Vertex expects to complete the pivotal program for acute pain in late 2023, sharing results from all three studies in early 2024.
VX-548 is also being evaluated in a mid-stage study in patients with diabetic peripheral neuropathy (DPN), a form of peripheral neuropathic pain. Vertex has completed this phase II study of VX-548 in DPN. Data readout from the DPN study is expected in late 2023.
Furthermore, VRTX is gearing up to initiate another mid-stage study of VX-548 in patients with lumbosacral radiculopathy, another form of peripheral neuropathic pain, in late 2023.
Vertex Pharmaceuticals Incorporated Price and Consensus
Some better-ranked stocks in the same industry areApellis Pharmaceuticals (APLS - Free Report) and Anixa Biosciences (ANIX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
In the past 30 days, the Zacks Consensus Estimate for Apellis’ 2023 loss per share has narrowed from $4.89 to $4.60. During the same time frame, the estimate for Apellis’ 2024 loss per share has narrowed from $2.77 to $1.94. Year to date, shares of APLS have lost 12.1%.
APLS beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative earnings surprise of 3.91%.
In the past 30 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2023 loss per share has remained constant at 32 cents. The estimate for Anixa Biosciences’ 2024 loss per share has remained constant at 37 cents. Year to date, shares of ANIX have lost 23.1%.
ANIX beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 26.29%.
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Vertex (VRTX) Q3 Earnings Beat, Sales Miss, Raises '23 View
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported adjusted earnings per share (EPS) of $3.97 in third-quarter 2023, beating the Zacks Consensus Estimate of $3.92. The adjusted EPS rose 10.6% year over year, driven by strong growth in product revenues. The upside was partially offset by higher research and development (R&D) expenses incurred during the quarter.
The company reported total revenues of $2.48 billion, comprising entirely of cystic fibrosis (CF) product revenues. The figure marginally missed the Zacks Consensus Estimate of $2.49 billion. However, total revenues rose 6.4% year over year, primarily driven by higher sales of Trikafta/Kaftrio (marketed as Kaftrio in Europe) in the U.S. and ex-U.S. markets.
In the year-to-date period, shares of Vertex have gained 33.6% against the industry’s 21% fall.
Image Source: Zacks Investment Research
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 $1.55 billion, while sales outside the United States increased 6% to $929 million.
Trikafta generated sales worth $2.27 billion, up 13.1% year over year. The upside was driven by the continued robust performance of Trikafta in the United States, fueled by label expansions to younger age groups (two to five years old). In the ex-U.S. markets, the drug also continues to witness strong uptake with recently achieved reimbursements. Trikafta sales beat the Zacks Consensus Estimate and our model estimate of $2.26 billion and $2.2 billion, respectively.
Sales from other CF products, namely Symdeko/Symkevi, Kalydeco and Orkambi, were down 35.4% year over year to $209.2 million. Sales of these drugs were hurt by patients switching to Trikafta.
Costs Rise
Adjusted R&D expenses rose 32.4% from the year-ago quarter’s levels to $726 million due to the expansion of the company’s mid- and late-stage pipeline.
Adjusted selling, general and administrative (SG&A) expenses increased 19.6% to $215.7 million in the reported quarter due to expenses for CF launches and pre-commercial activities for exa-cel.
During the reported quarter, Vertex recorded Acquired IPR&D costs of $51.7 million compared with $29 million in the year-ago quarter.
Updated 2023 Guidance
Based on the solid uptake of Trikafta/Kaftrio observed worldwide, Vertex raised its 2023 CF product revenue guidance. Management expects total revenues from CF products to be $9.85 billion compared with the prior expectation of $9.7-$9.8 billion.
The company has, however, maintained its guidance for full-year 2023 adjusted combined R&D, Acquired IPR&D and SG&A expenses in the band of $4.1-$4.2 billion.
The adjusted tax rate is expected in the range of 20-21%, which was previously expected in the band of 21-22%.
Pipeline & Other Updates
Vertex announced remaining on track to complete the pivotal SKYLINE 102 and SKYLINE 103 studies, evaluating the efficacy and safety of the vanzacaftor/tezacaftor/deutivacaftor combo, in comparison with Trikafta in patients with CF aged 12 years and olderby the end of 2023. The company’s RIDGELINE study of the same vanzacaftor triple combination therapy in children with CF aged six to 11 years is also on track to be completed by the end of the year.
This new once-a-day combination medicine has the potential for enhanced patient benefit than Trikafta patients and can potentially treat CF patients who have discontinued Trikafta or other Vertex CF medicines. The company anticipates data readout from all three studies in early 2024.
Apart from CF, VRTX is rapidly advancing its mid- and late-stage pipeline, which comprises candidates across eight indications. Seven of the programs are past the proof-of-concept stage.
The company 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). In 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. Exa-cel’s BLA for SCD enjoys the FDA’s Priority Review status.
CRISPR Therapeutics and Vertex have filed similar regulatory submissions for exa-cel in the EU and U.K., which are currently being reviewed by the respective regulatory authorities. Management expects the CRSP-partnered exa-cel to be its next commercial launch.
Vertex has also completed enrollment in its pivotal phase III study evaluating its non-opioid NaV1.8 inhibitor VX-548 as a potential treatment for moderate to severe acute pain following abdominoplasty surgery.
However, enrollment is still ongoing in the pivotal phase III study evaluating VX-548 to treat moderate to severe acute pain following bunionectomy. Vertex expects to complete the pivotal program for acute pain in late 2023, sharing results from all three studies in early 2024.
VX-548 is also being evaluated in a mid-stage study in patients with diabetic peripheral neuropathy (DPN), a form of peripheral neuropathic pain. Vertex has completed this phase II study of VX-548 in DPN. Data readout from the DPN study is expected in late 2023.
Furthermore, VRTX is gearing up to initiate another mid-stage study of VX-548 in patients with lumbosacral radiculopathy, another form of peripheral neuropathic pain, in late 2023.
Vertex Pharmaceuticals Incorporated Price and Consensus
Vertex Pharmaceuticals Incorporated price-consensus-chart | Vertex Pharmaceuticals Incorporated Quote
Zacks Rank & Stocks to Consider
Vertex currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same industry areApellis Pharmaceuticals (APLS - Free Report) and Anixa Biosciences (ANIX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, the Zacks Consensus Estimate for Apellis’ 2023 loss per share has narrowed from $4.89 to $4.60. During the same time frame, the estimate for Apellis’ 2024 loss per share has narrowed from $2.77 to $1.94. Year to date, shares of APLS have lost 12.1%.
APLS beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average negative earnings surprise of 3.91%.
In the past 30 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2023 loss per share has remained constant at 32 cents. The estimate for Anixa Biosciences’ 2024 loss per share has remained constant at 37 cents. Year to date, shares of ANIX have lost 23.1%.
ANIX beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 26.29%.