Morgan Stanley Reports Vertex Pharmaceuticals

Morgan Stanley commented on Vertex Pharmaceuticals VRTX in a report released yesterday. In the report, Morgan Stanley was negative in its assessment of the company. Morgan Stanley writes, "We believe the Street is overestimating the sales growth trajectory of Vertex's novel hepatitis C (HCV) therapy, TVR. We expect numbers to disappoint, especially in the early quarters of launch. TVR has shown SVR rates superior to Merck's Victrelis, but the company has priced the drug at a premium ($4,100/wk vs. $1,000/wk) that we believe could pressure market share as the HCV population is largely un/under-insured, Victrelis has the marketing power of Roche and Merck, and the therapeutic differences between the drugs are modest. Street models assume a rapid launch of TVR, with it swiftly gaining dominant market share in a rapidly expanding treated pt pool. We do not believe this launch pace is feasible given the dynamics within physicians offices. By YE12, we model 63% growth in G1 treated pts vs. our consensus sales derived est. of ~100%." Morgan Stanley currently has an Underweight rating on Vertex and a price target of $33. Shares of Vertex closed at $56.26, up from $55.66 at the open.