6. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)
Growth Investment Ratio: 196%
Number of Hedge Fund Holders: 59
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a Massachusetts-based biotechnology company that develops treatments for fibrosis, sickle cell disease, thalassemia, and other ailments. It is operationally profitable, which means that Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s hypothesis is based on its ability to maintain share with existing drugs and the ability to launch new treatments to grow revenue. On the former front, the firm is quite vulnerable as it depends to a large extent on its cystic fibrosis treatment TRIKAFTA to generate revenue. As of H1 2024, 92% of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s revenue came through the cystic fibrosis treatment. Consequently, not only does the firm have to ensure that the fibrosis drug does not face competition from rivals, but it also has to maintain a robust pipeline to reduce income statement risk. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s CASGEVY is the world’s first gene-editing-based therapy for sickle cell disease and is in the early commercial stages. The firm also has kidney disease, diabetes, and neuropathy treatments in phase three trials.
PGIM Jennison mentioned Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) in its Q2 2024 investor letter. Here is what the fund said:
“Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a commercial stage biopharmaceutical with a core franchise of small molecule CFTR modulators for cystic fibrosis (CF), a genetic and progressively fatal respiratory disease. Vertex has built a unique and unrivaled market position as the dominant market leader in CF, having created and expanded the market into a nearly $10B franchise and growing. Later this year, we expect them to receive approval for their next-gen CF triple therapy, which we think will drive top-line growth and margin expansion in 2025 onwards. Vertex is also developing an acute and chronic pain franchise. Vertex reported positive Phase 3 data in acute pain and Phase 2 data in chronic pain earlier this year; the FDA filing in acute pain has been completed, and pending approval, Vertex expects to launch in acute pain in early 2025. Beyond CF and pain, Vertex has focused its pipeline around genetically driven diseases with the potential for a transformative clinical benefit. It currently spans 5 disease verticals: sickle cell/beta thalassemia, type 1 diabetes, APOL-1 kidney disease, IgA nephropathy (from the recent acquisition of Alpine Immune Sciences), and alpha-1 antitrypsin disease. Vertex has had a strong start to the year and has delivered positively on several clinical trial readouts, as well as beat Q1 revenue estimates and maintained what was a better than expected ’24 guidance. Vertex has a busy catalyst calendar in 2H24 which include next-gen CF approval, acute pain approval for their first-in-class pain drug, and additional data sets in chronic pain.”
