2024-03-21 00:00:46 ET
Summary
- Vertex Pharmaceuticals has a dominant Cystic fibrosis franchise and plans to launch five new products by 2028, including a next-generation CF drug and a non-opioid pain management drug.
- VRTX stock has stalled in 2024 due to lower revenue growth projections for the year, which is unappealing for growth investors.
- The long-term potential of its drug pipeline may justify buying for long-term growth investors.
Vertex Pharmaceuticals (VRTX) is a promising biotechnology with solid financial results in 2023, a dominant Cystic fibrosis ("CF") franchise, and is on track to diversify its drug portfolio by launching five new products by 2028, which include its newest CF drug, a non-opioid pain management drug, and a therapy addressing Sickle Cell Disease and Beta-Thalassemia. Several of these solutions have the potential to produce blockbuster status. Investors were excited by the potential in 2023 as the stock was up 41% last year, handily smashing the 7.60% total returns of SPDR S&P Biotech ETF ( XBI ) and the returns of the S&P 500 of 24.2%.
Although the company holds tremendous promise, as seen on the chart below, the stock has stalled so far in 2024. For several reasons, investors seem reluctant to push the stock price much higher in the near term. First, the company has forecast a revenue range in 2024 of $10.55 billion to $10.75 billion, which would be around 8% year-over-year growth at mid-point, down from the 11% year-over-year growth it produced in 2023 -- unappealing for some growth investors....
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Vertex Pharmaceuticals: Diversifying Its Drug Portfolio For Future Growth