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Is a Beat in Store for Vertex (VRTX) This Earnings Season?
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We expect Vertex Pharmaceuticals, Inc. (VRTX - Free Report) to beat expectations when it reports second-quarter 2018 results on Jul 25, after market close.
Vertex Pharma’s shares have increased 18.4% so far this year while the industry has recorded a decrease of 2.4%.
Vertex Pharma’s track record has been impressive so far. The company delivered positive earnings surprise in each of the last four quarters. The average positive earnings surprise for the last four quarters is 22.72%. In the last reported quarter, Vertex came up with a positive surprise of 31.03%.
Let’s see how things are shaping up for this quarter.
Factors at Play
Vertex Pharma’s cystic fibrosis ("CF") drug portfolio is performing well in 2018 with sales up 33% in the first quarter on the back of strong demand and product launch in the United States. We expect the positive trend to continue in the soon-to-be reported quarter.
In January 2018, Orkambi’s label was expanded in Europe to include use in children with CF aged between six and 11 years and have two copies of the F508del mutation. This approval has expanded the patient population by about 3,400. The expanded patient population is expected to drive sales of the drug higher in the second quarter. The Zacks Consensus Estimate for Orkambi’s sales in the second quarter is $376 million.
Kalydeco sales grew more than 34% in the first quarter. The drug is approved for a wide range of CF patients who are aged 2 years and older with certain residual mutations in CFTR gene. The drug has seen significant demand in the eligible patient population, which is expected to continue. The Zacks Consensus Estimate for second-quarter Kalydeco sales is pegged at $246 million.
Vertex Pharma added a third CF drug to its portfolio with the approval and launch of Symdeko in the United States in February 2018. The drug generated $34 million in sales in the first quarter. In the second quarter, the first full quarter since launch, sales are expected to be higher than the previous quarter. This will certainly boost the company’s top line. The approval of the drug in Canada in late June is not expected to have any material impact on second-quarter sales.
The company remains focused on development of its triple-combination regimens. In April, Vertex Pharma initiated two phase III studies, evaluating VX-445 in combination with tezacaftor and Kalydeco (ivacaftor) in CF patients. The company advanced VX-669 triple combination in phase III stage earlier in March. Two separate mid-stage studies were also initiated during the quarter for evaluating VX-561 in combination with tezacaftor and VX-445/VX-669 in CF patients.
Investor focus on the call will be on the progress of these triple combination CF regimens, which are crucial for long-term growth of Vertex Pharma. However, operating expenses are likely to remain on the higher side due to initiation of pivotal studies, a mid-stage study and to support the continued launch of Symdeko.
Why a Likely Positive Surprise?
Our proven model indicates that Vertex Pharma is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (76 cents) and the Zacks Consensus Estimate (72 cents), stands at +5.95%. This is a leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Vertex Pharma has a Zacks Rank #3. The combination of a positive Earnings ESP and a favorable Zacks Rank makes us reasonably confident of an earnings beat.
Conversely, we caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Vertex Pharmaceuticals Incorporated Price and EPS Surprise
Here are some biotech stocks that you may also want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Horizon Pharma is scheduled to release its results on Aug 8. The company has an Earnings ESP of +19.66% and a Zacks Rank #3.
BioDelivery Sciences is expected to release its results on Aug 8. The company has an Earnings ESP of +3.23% and a Zacks Rank #2.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Is a Beat in Store for Vertex (VRTX) This Earnings Season?
We expect Vertex Pharmaceuticals, Inc. (VRTX - Free Report) to beat expectations when it reports second-quarter 2018 results on Jul 25, after market close.
Vertex Pharma’s shares have increased 18.4% so far this year while the industry has recorded a decrease of 2.4%.
Vertex Pharma’s track record has been impressive so far. The company delivered positive earnings surprise in each of the last four quarters. The average positive earnings surprise for the last four quarters is 22.72%. In the last reported quarter, Vertex came up with a positive surprise of 31.03%.
Let’s see how things are shaping up for this quarter.
Factors at Play
Vertex Pharma’s cystic fibrosis ("CF") drug portfolio is performing well in 2018 with sales up 33% in the first quarter on the back of strong demand and product launch in the United States. We expect the positive trend to continue in the soon-to-be reported quarter.
In January 2018, Orkambi’s label was expanded in Europe to include use in children with CF aged between six and 11 years and have two copies of the F508del mutation. This approval has expanded the patient population by about 3,400. The expanded patient population is expected to drive sales of the drug higher in the second quarter. The Zacks Consensus Estimate for Orkambi’s sales in the second quarter is $376 million.
Kalydeco sales grew more than 34% in the first quarter. The drug is approved for a wide range of CF patients who are aged 2 years and older with certain residual mutations in CFTR gene. The drug has seen significant demand in the eligible patient population, which is expected to continue. The Zacks Consensus Estimate for second-quarter Kalydeco sales is pegged at $246 million.
Vertex Pharma added a third CF drug to its portfolio with the approval and launch of Symdeko in the United States in February 2018. The drug generated $34 million in sales in the first quarter. In the second quarter, the first full quarter since launch, sales are expected to be higher than the previous quarter. This will certainly boost the company’s top line. The approval of the drug in Canada in late June is not expected to have any material impact on second-quarter sales.
The company remains focused on development of its triple-combination regimens. In April, Vertex Pharma initiated two phase III studies, evaluating VX-445 in combination with tezacaftor and Kalydeco (ivacaftor) in CF patients. The company advanced VX-669 triple combination in phase III stage earlier in March. Two separate mid-stage studies were also initiated during the quarter for evaluating VX-561 in combination with tezacaftor and VX-445/VX-669 in CF patients.
Investor focus on the call will be on the progress of these triple combination CF regimens, which are crucial for long-term growth of Vertex Pharma. However, operating expenses are likely to remain on the higher side due to initiation of pivotal studies, a mid-stage study and to support the continued launch of Symdeko.
Why a Likely Positive Surprise?
Our proven model indicates that Vertex Pharma is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (76 cents) and the Zacks Consensus Estimate (72 cents), stands at +5.95%. This is a leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Vertex Pharma has a Zacks Rank #3. The combination of a positive Earnings ESP and a favorable Zacks Rank makes us reasonably confident of an earnings beat.
Conversely, we caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Vertex Pharmaceuticals Incorporated Price and EPS Surprise
Vertex Pharmaceuticals Incorporated Price and EPS Surprise | Vertex Pharmaceuticals Incorporated Quote
Other Stocks to Consider
Here are some biotech stocks that you may also want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Acorda Therapeutics is scheduled to release its results on Jul 26. The company has an Earnings ESP of +66.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Horizon Pharma is scheduled to release its results on Aug 8. The company has an Earnings ESP of +19.66% and a Zacks Rank #3.
BioDelivery Sciences is expected to release its results on Aug 8. The company has an Earnings ESP of +3.23% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>