Vertex Pharmaceuticals' Phase 3 Studies Offer Ample Opportunity For Upside

The company is running four phase 3 studies aimed at testing Vx-661/Ivacaftor in Cystic Fibrosis (CF) patients stratified by mutational status. The brokerage said Vertex's near-term catalysts are dominated by its second generation CF combination regimen of Vx-661/Ivacaftor, which Leerink regards as a $1.1 billion incremental opportunity across four CF patient groups.

"We are positive about Vx-661, and expect 3 of 4 ongoing phase III trials with Vx-661 to succeed, and show superiority to their comparator arms and to the prior precedents with Kalydeco and Orkambi in their respective indications," analyst Geoffrey Porges wrote in a note.

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Meanwhile, Porges said Vx-661 should be easier to take and more effective than Orkambi and could bring revenue in the range of about $485 million, assuming comparable pricing to Orkambi in all markets.

The next catalyst for Vertex is the interim read out for the het/min study with Vx-661.

Despite the likelihood of success for the het/min study is relatively low, the analyst noted that this would potentially double the incremental revenue opportunity and value from the Vx-661 program.

At the time of writing, shares of Vertex rose 1.14 percent to $102.68. Porges has a price target of $113, implying a potential upside of 11 percent over Friday's close.

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