William Blair initiated research coverage of Vertex Pharmaceuticals Incorporated (VRTX $332.63), a biopharma company focused on the development and commercialization of transformative specialty medicines for the treatment of cystic fibrosis (CF) and other rare genetic diseases.
Analysts Myles Minter and Sami Corwin estimated that the company would generate $3.7 billion in cash flow from operations in 2023, and that this would increase to $7.2 billion by 2027.
“Vertex Pharmaceuticals, based in Boston, Massachusetts, is the global leader in the discovery and development of candidates to treat CF,” said Minter. “The company has dominated the CF market since 2012, establishing a large competitive moat with its CF transmembrane conductance regulator modulator franchise, which is protected by intellectual property and has unparalleled efficacy to date. Vertex is a modality-agnostic company and has continued to invest in transformative medicines for serious diseases that hinge on genetically or pharmacologically validated targets. Its robust development pipeline, which spans early- to late-stage clinical programs, offers multiple opportunities for continued growth across new indications and modalities.
“Vertex’s CF franchise, which comprises Kalydeco, Orkambi, Symdeko, and Trikafta, is one of the largest competitive moats in biotech,” added Corwin. “We believe Vertex’s dominant share of the CF market is assured through 2037, via Trikafta, which has set a high bar in safety and efficacy, or the next-generation vanzacaftor triple combination, and we see the potential for modest 18% growth over the next five years driven by reimbursement in ex-U.S. territories, label expansions into additional age groups, and continued market uptake into the remaining 20,000 addressable CF patients worldwide. Near-term opportunities outside CF include the potential launch of exa-cel and pipeline updates in pain, diabetes, and kidney disease.”
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