Citizens JMP Maintains Buy Rating for Vertex, Sets Price Target at $50.00.

Citizens JMP maintains a Buy rating on Vertex with a price target of $50.00. Patrick Walravens, a 4-star analyst, is optimistic about the company's prospects. Vertex has a one-year high of $60.71 and a one-year low of $24.45, with an average volume of 1.44M. However, corporate insider sentiment is negative, with an increase in insiders selling shares.

Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) has recently experienced a significant pullback in its stock price, falling 27% from its all-time high in November 2024. This decline was primarily attributed to the underperformance of its latest trial data for a NaV1.8 pain signal inhibitor, VX-993, which failed to meet its primary endpoint in treating acute pain after bunionectomy surgery. Despite this setback, the company maintains a strong investment thesis backed by its dominant position in Cystic Fibrosis (CF) treatments and promising new pipelines in other therapeutic areas.

CF Dominance and Revenue Growth

Vertex has a monopoly in its main franchise and revenue driver, CF, through Trikafta and its most recently approved iteration, Alyftrek. In their latest Q2 2025 results, Vertex earned $2.96 billion in revenue, of which $2.55 billion was from Trikafta, and $157 million was from Alyftrek. This represents a year-over-year growth rate of 10.46% and a sequential growth rate of 12%. The company's growth rate has been fairly consistent over the past few years, with revenue from CF treatments expected to continue driving growth in the near term.

New Therapeutic Areas: Casgevy and Journavx

Vertex is also making progress in other therapeutic areas, such as sickle cell disease and pain management. Casgevy, co-owned with Crispr Therapeutics (CRSP), is a treatment for severe sickle cell disease and thalassemia, with an estimated addressable patient population of around 60,000. Journavx, a pain medication, has a total addressable population of around 80 million and has shown promising progress in gaining payer coverage and clinical feedback.

Pain Franchise: Setbacks and Opportunities

The recent trial data for VX-993 was not as positive as expected, but it was still considered safe and well-tolerated. The results were superior to placebo but inferior to hydrocodone bitartrate/acetaminophen and previous NaV1.8 inhibitors. Vertex has not abandoned the pain franchise, with several other trials and indications in progress, including a Phase-3 trial for Diabetic Peripheral Neuropathy (DPN) and a preclinical stage NaV1.7 pain inhibitor. The company remains optimistic about its pain franchise, with a focus on developing a DPN indication first.

Valuation and Future Prospects

Vertex has shown consistent revenue growth on a TTM basis, with normalized EPS growth also improving. The company's forward PE of 18.8 is relatively cheap compared to its peers, given its expected high forward revenue growth rate. Despite the recent stock price decline, the company's valuation remains attractive, with a price target of $50.00 from Citizens JMP and a one-year high of $60.71.

Conclusion

While the recent trial data for VX-993 was not as positive as expected, it did not significantly impact the overall investment thesis for Vertex Pharmaceuticals. The company's dominant position in CF treatments, promising new pipelines, and consistent revenue growth make it a strong buy, despite the recent setbacks. Investors should remain optimistic about Vertex's long-term prospects and potential for further growth.

References

[1] https://seekingalpha.com/article/4812325-vertex-pharmaceuticals-is-a-strong-buy-after-the-recent-pullback-upgrade