Analysts Mixed as Results from Trial of Vertex's Telaprevir Send the Stock Higher (VRTX)

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VRTX Hot Sheet

Rating Summary:
12 Buy, 9 Hold, 0 Sell

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Up

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23

A Phase II study of the Vertex (Nasdaq: VRTX) drug, telaprevir, showed that a twice-daily dose of the medication results in a cure for hepatitis C in 80% of patients. The results have caused a surge in the company's stock, which is currently up more than 8%.

The improvement in the medication will help reduce the dosage from three times a day to twice, while maintaining the same cure rates of 80%. Traders are saying that this improvement on the leading hepatitis C drug will make it difficult for any competitor to gain market share on Vertex.

At an investor event on Sunday, Vertex's CFO stated, "The bar we are setting with telaprevir is a high one."

The company hopes that the new drug will allow for 24-week treatment for patients, as opposed to the 48-week duration that was required previously. With the majority of hepatitis C patients being younger and more active, the shorter administration process will increase the popularity of the drug.

Another encouraging result of the Phase II study was the 3% dropout rate, which had been a source of concern for the company in previous studies.

Several analysts are out with comments today following the results:

Deutsche Bank maintains a Buy rating and a $39 price target, saying that potential for telaprevir is promising. On the other hand, the firm also noted that it will be important to watch competing agents for a response.
Goldman Sachs maintains a Neutral, noting that the Phase II trial was relatively small and included no control arm. While the analysts still see all the positives that showed up in the results, they remain hesitant.

Shares of Vertex are most recently traded at $36.50.