Stifel Positive on Vertex (VRTX) as Triple Combo Moves Forward; PT Trimmed to $108
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Stifel analyst Adam Walsh trimmed his price target on Vertex (NASDAQ: VRTX) to $108.00 (from $109.00) but maintained a Buy rating as the triple combo moves forward.
Walsh commented, "At last, Vertex outlined the path forward for its triple combo regimens, removing an overhang on the stock as the competitive landscape heats up with Galapagos/Abbvie (not covered) planning to launch their own P2 triple combo in mid-17. In 4Q16, Vertex will launch two separate P2 triple trials, one with VX-440 (4 weeks; includes FEV1 as primary endpoint) and the other with VX-152 (2 weeks - FEV1 as secondary). Of note, neither study is powered to show statistical significance for FEV1. Data for both are expected in 2H17. In addition, Vertex announced new next-gen corrector VX-659 will enter P1 in 4Q16 in both healthy volunteers and CF patients. HBE assays suggest higher efficacy and greater potency than VX-440. Management reaffirmed guidance but also indicated future Kalydeco sales are expected to be flattish given current full penetration - we are modestly lowing our forecast. Discussions with FDA continue regarding the Kalydeco CRL for residual function mutations (not in our model). Our DCF target price is lowered to $108 from $109 on Kalydeco adjustment. With reset Orkambi expectations, 3 P3 VX-661/Kalydeco trials set to read-out in 1H17, and triple combo results due in 2H17, we think Vertex is well-positioned for upside. Reiterate Buy."
Shares of Vertex closed at $78.71 yesterday.
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