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Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported first-quarter 2020 earnings per share of $2.56, beating the Zacks Consensus Estimate of $1.83. Moreover, the bottom line skyrocketed 124.5% year over year. Strong cystic fibrosis (CF) product revenues led to higher earnings in the reported quarter.
Vertex’s revenues of $1.52 billion also surpassed the Zacks Consensus Estimate of $1.3 billion. Total revenues comprising only CF product sales soared 77% year over year, driven by the rapid uptake of newest CF medicine Trikafta, a triple combination regimen, in the United States and the recent reimbursement approvals for Orkambi and Symkevi in the international markets.
In March 2020, Vertex announced that the coronavirus disease (COVID-19) outbreak had no meaningful impact on its supply chain and that the company will be able to continue dispensing its medicines.
On first-quarter conference call, management stated that the COVID-19 pandemic prompted some CF centers to limit their non-emergency interactions, which might impact the rate of future initiations. As a result, this could limit the uptake of its CF medicines in the future.
Quarter in Detail
Vertex’s first-quarter sales comprised only CF product revenues. The company markets four CF medicines, namely Kalydeco (ivacaftor), Orkambi (lumacaftor-ivacaftor), Symdeko (a combination of tezacaftor and ivacaftor) and Trikafta (elexacaftor/tezacaftor/ivacaftor and ivacaftor). The company did not record any collaborative and royalty revenues during the reported quarter.
Trikafta, in its first full quarter since its launch, generated sales worth $895 million. The drug saw a solid uptake since its early introduction and has been a key milestone for Vertex’s growth.
Trikafta is also under review in Europe with an approval expected later in 2020. Meanwhile, phase III studies are also ongoing to evaluate Trikafta in children aged from six to 11 years. An sNDA seeking approval for the pediatric patient population is expected to be filed in 2020. A potential approval of Trikafta in the EU and for the pediatric patients in the United States could bring additional Trikafta revenues in 2020.
Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients.
Symdeko/ Symkevi registered sales of $173 million in the first quarter, declining 45.9% year over year.
Meanwhile, Kalydeco, Vertex’s first CF medicine, recorded sales of $213 million in the quarter under consideration, reflecting a 12.7% decrease year over year.
Orkambi generated sales of $234 million in the reported quarter, accounting for a 20.1% decline year over year.
It is evident that a strong adoption of Trikafta might have resulted in sales erosion of the existing combinations. On first-quarter earnings call, management stated that it expects Trikafta to be the main revenue driver for Vertex in 2020. It also mentioned about the recent reimbursement approvals for Orkambi and Symkevi in key countries like England and France.
Per the company, Trikafta is now being taken by the majority of eligible patients in the United States.
Adjusted research and development (R&D) expenses rose 23.4% to $337 million in the first quarter.
Adjusted selling, general and administrative (SG&A) expenses increased 22.8% to $140 million in the reported quarter.
2020 Revenue Guidance
Based on Trikafta’s strong performance in first-quarter 2020, Vertex raised its revenue guidance for the year.
The company now expects total revenues for CF products in the range of $5.3-$5.6 billion compared with the previous range of $5.1-$5.3 billion. The revised guidance is also above the Zacks Consensus Estimate of $5.2 billion.
Shares of Vertex were up 2.9% in after-hours trading following the guidance lift. In fact, the stock has rallied 14.7% in the year so far compared with the industry’s increase of 1.8%.
Meanwhile, combined adjusted R&D plus SG&A expenses are anticipated in the band of $1.95-$2 billion, unchanged from the previous expectation.
Other Updates
Vertex recently initiated a phase II proof-of-concept study on its investigational candidate, VX-147, in healthy volunteers for the treatment of APOL1-mediated focal segmental glomerulosclerosis (FSGS).
Notably, the company is co-developing a gene editing treatment, CTX001, in partnership with CRISPR Therapeutics (CRSP - Free Report) for two devastating diseases, namely sickle cell disease and transfusion-dependent beta thalassemia. The companies remain on track to provide additional data from the two ongoing phase I/II studies on CTX001 later in 2020. Screening and enrollment in these studies are currently underway but no additional patients are scheduled to start dosing at this time.
We note that Vertex temporarily paused enrolling patients in the phase II study on its first oral small molecule corrector, VX-814, for the treatment of alpha-1 antitrypsin (AAT) deficiency.
In March 2020, Vertex announced that it will halt enrollment in certain ongoing studies and may delay any new evaluation, depending on the disease, stage of development and the type of study. The decision was taken to ease the healthcare system and allow doctors and healthcare facilities sufficient time to deepen focus on the efforts to combat the currently-plaguing coronavirus disease (COVID-19).
Vertex recently extended its research collaboration agreement with Moderna, Inc. (MRNA - Free Report) for developing mRNA therapeutics to treat CF.
Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Blueprint Medicines’ loss per share estimates have been narrowed 0.1% for 2020 and 0.6% for 2021 over the past 60 days.
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Vertex (VRTX) Q1 Earnings Beat, Trikafta Drives CF Revenues
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) reported first-quarter 2020 earnings per share of $2.56, beating the Zacks Consensus Estimate of $1.83. Moreover, the bottom line skyrocketed 124.5% year over year. Strong cystic fibrosis (CF) product revenues led to higher earnings in the reported quarter.
Vertex’s revenues of $1.52 billion also surpassed the Zacks Consensus Estimate of $1.3 billion. Total revenues comprising only CF product sales soared 77% year over year, driven by the rapid uptake of newest CF medicine Trikafta, a triple combination regimen, in the United States and the recent reimbursement approvals for Orkambi and Symkevi in the international markets.
In March 2020, Vertex announced that the coronavirus disease (COVID-19) outbreak had no meaningful impact on its supply chain and that the company will be able to continue dispensing its medicines.
On first-quarter conference call, management stated that the COVID-19 pandemic prompted some CF centers to limit their non-emergency interactions, which might impact the rate of future initiations. As a result, this could limit the uptake of its CF medicines in the future.
Quarter in Detail
Vertex’s first-quarter sales comprised only CF product revenues. The company markets four CF medicines, namely Kalydeco (ivacaftor), Orkambi (lumacaftor-ivacaftor), Symdeko (a combination of tezacaftor and ivacaftor) and Trikafta (elexacaftor/tezacaftor/ivacaftor and ivacaftor). The company did not record any collaborative and royalty revenues during the reported quarter.
Trikafta, in its first full quarter since its launch, generated sales worth $895 million. The drug saw a solid uptake since its early introduction and has been a key milestone for Vertex’s growth.
Trikafta is also under review in Europe with an approval expected later in 2020. Meanwhile, phase III studies are also ongoing to evaluate Trikafta in children aged from six to 11 years. An sNDA seeking approval for the pediatric patient population is expected to be filed in 2020. A potential approval of Trikafta in the EU and for the pediatric patients in the United States could bring additional Trikafta revenues in 2020.
Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients.
Symdeko/ Symkevi registered sales of $173 million in the first quarter, declining 45.9% year over year.
Meanwhile, Kalydeco, Vertex’s first CF medicine, recorded sales of $213 million in the quarter under consideration, reflecting a 12.7% decrease year over year.
Orkambi generated sales of $234 million in the reported quarter, accounting for a 20.1% decline year over year.
It is evident that a strong adoption of Trikafta might have resulted in sales erosion of the existing combinations. On first-quarter earnings call, management stated that it expects Trikafta to be the main revenue driver for Vertex in 2020. It also mentioned about the recent reimbursement approvals for Orkambi and Symkevi in key countries like England and France.
Per the company, Trikafta is now being taken by the majority of eligible patients in the United States.
Adjusted research and development (R&D) expenses rose 23.4% to $337 million in the first quarter.
Adjusted selling, general and administrative (SG&A) expenses increased 22.8% to $140 million in the reported quarter.
2020 Revenue Guidance
Based on Trikafta’s strong performance in first-quarter 2020, Vertex raised its revenue guidance for the year.
The company now expects total revenues for CF products in the range of $5.3-$5.6 billion compared with the previous range of $5.1-$5.3 billion. The revised guidance is also above the Zacks Consensus Estimate of $5.2 billion.
Shares of Vertex were up 2.9% in after-hours trading following the guidance lift. In fact, the stock has rallied 14.7% in the year so far compared with the industry’s increase of 1.8%.
Meanwhile, combined adjusted R&D plus SG&A expenses are anticipated in the band of $1.95-$2 billion, unchanged from the previous expectation.
Other Updates
Vertex recently initiated a phase II proof-of-concept study on its investigational candidate, VX-147, in healthy volunteers for the treatment of APOL1-mediated focal segmental glomerulosclerosis (FSGS).
Notably, the company is co-developing a gene editing treatment, CTX001, in partnership with CRISPR Therapeutics (CRSP - Free Report) for two devastating diseases, namely sickle cell disease and transfusion-dependent beta thalassemia. The companies remain on track to provide additional data from the two ongoing phase I/II studies on CTX001 later in 2020. Screening and enrollment in these studies are currently underway but no additional patients are scheduled to start dosing at this time.
We note that Vertex temporarily paused enrolling patients in the phase II study on its first oral small molecule corrector, VX-814, for the treatment of alpha-1 antitrypsin (AAT) deficiency.
In March 2020, Vertex announced that it will halt enrollment in certain ongoing studies and may delay any new evaluation, depending on the disease, stage of development and the type of study. The decision was taken to ease the healthcare system and allow doctors and healthcare facilities sufficient time to deepen focus on the efforts to combat the currently-plaguing coronavirus disease (COVID-19).
Vertex recently extended its research collaboration agreement with Moderna, Inc. (MRNA - Free Report) for developing mRNA therapeutics to treat CF.
Vertex Pharmaceuticals Incorporated Price, Consensus and EPS Surprise
Vertex Pharmaceuticals Incorporated price-consensus-eps-surprise-chart | Vertex Pharmaceuticals Incorporated Quote
Zacks Rank & Another Key Pick
Vertex currently sports a Zacks Rank #1 (Strong Buy). Another top-ranked stock in the biotech sector is Blueprint Medicines Corporation (BPMC - Free Report) , which flaunts the same Zacks Rank as Vertex. You can see the complete list of today’s Zacks #1 Rank stocks here.
Blueprint Medicines’ loss per share estimates have been narrowed 0.1% for 2020 and 0.6% for 2021 over the past 60 days.
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