IBD Tech Leader Vertex Pharmaceuticals snagged an upgrade Wednesday on its burgeoning non-cystic fibrosis pipeline — and VRTX stock inched higher.
Vertex is the de facto leader in cystic fibrosis treatments and makes drugs that can treat 90% of patients with the inherited lung disease. Now, the biotech giant is looking to diversify into other areas, including blood and kidney diseases, as well as pain, Maxim Group analyst Naz Rahman said in a report to clients.
"Since the end of 2021, Vertex has been steadily reporting consistent, positive data on its pipeline beyond cystic fibrosis and is on pace to have multiple non-CF programs in pivotal (studies) in 2022," he said. "Vertex has long owned the CF space and now the answer for the future of the company is clearer."
On the stock market today, VRTX stock edged 0.3% higher to 269.41. Earlier, shares climbed as much as 2.6%.
VRTX Stock: Moving Outside Cystic Fibrosis
Vertex's leading non-cystic fibrosis treatment is a CRISPR gene-editing approach to blood diseases beta thalassemia and sickle cell disease. Its partner is Crispr Therapeutics. Their efforts involve editing genes outside the body and then infusing them back into patients.
Further, the company is testing out a treatment for focal segmental glomerulosclerosis, or FSGS. FSGS is a subset of patients with kidney disease due to mutations in the APOL1 gene. Rahman also noted the company's efforts in postoperative pain.
The company is also continuing to work on a new triple-drug regimen in cystic fibrosis and a messenger RNA therapy for the disease with Moderna. But Rahman sees those as likely to cannibalize Vertex's current suite of cystic fibrosis medicines, rather than add onto them.
Still, he upgraded VRTX stock to a buy rating from hold, and established a 325 price target.
"We view Vertex as a highly attractive near and long-term investment in this challenging biotech and broader macro environment," he said. "While most stocks are down significantly in 2022, Vertex shares are up 22% year to date."
Forming A Cup Base
Rahman expects Vertex to have multiple new drugs launch between 2024-26. The company is testing other treatments in diabetes, a form of muscular dystrophy and alpha-1 antitrypsin deficiency. The last is a disease in which the body doesn't produce enough of a protein that protects tissues.
Investors in VRTX stock are also enthused about the company's efforts. Shares hit a recent low in mid-April, but have since bounded higher. Now, Vertex stock is forming a cup base with a buy point at 292.85, according to MarketSmith.com.
Importantly, VRTX stock is highly rated, according to IBD Digital. Shares have strong Composite and Relative Strength Ratings of 95. This puts shares' technical/fundamental measures and 12-month performance in the leading 5% of all stocks.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
