Cash-Rich Vertex Pharma Raises 2024 Product Revenue Guidance

Image: Vertex Pharma’s shares have done quite well the past couple years.

By Brian Nelson, CFA

Vertex Pharma (VRTX) reported better than expected third quarter results November 4 with revenue and non-GAAP earnings per share coming in ahead of the consensus forecasts. Product revenue advanced 12% in the quarter on a year-over-year basis thanks to strong performance of its cystic fibrosis (CF) therapy TRIKAFTA/KAFTRIA. GAAP and non-GAAP net income were $1.0 billion and $1.1 billion, respectively, for both the third quarter of 2024 and the third quarter of 2023.

Management was upbeat with its commentary in the press release:

The third quarter marked another period of strong progress, with continued revenue growth and outstanding execution across the business, and we are again increasing our full-year product revenue guidance. Launch preparedness is well underway as we look forward to the potential approvals of the vanzacaftor triple for cystic fibrosis and suzetrigine, a new class of medicine for moderate-to-severe acute pain. With a broad and deep pipeline and three additional programs advancing to Phase 3 development in the last quarter alone, Vertex is well positioned for continued long-term growth.

Vertex’s cash and marketable securities were $11.2 billion at the end of the quarter compared to $13.7 billion at the end of last year, the decline driven by its acquisition of Alpine Immune Sciences and the repurchase of common stock, partially offset by cash-flow generation. The company ended the quarter with no traditional debt. Looking to full-year 2024, Vertex raised its product revenue guidance to $10.8-$10.9 billion from $10.65-$10.85 billion thanks to continued growth in its CF business and the launch of CASGEVY in approved indications (sickle cell disease and transfusion-dependent beta thalassemia) and geographies.

We continue to like Vertex’s established position in cystic fibrosis and its opportunity in gene-editing therapies as well as a new class of medicine for acute pain (VX-548) that’s without the limitations of opioids. The company’s pipeline is also progressing nicely with three additional programs advancing to Phase 3 – suzetrigine in painful diabetic peripheral neuropathy (DPN), povetacicept in immunoglobulin A nephropathy (IgAN), and VX-880 in Type 1 diabetes (T1D). The high end of our fair value estimate range for Vertex stands at $640 per share.

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