Vertex Pharma (VRTX): "Triple Combination" Success More Likely - Leerink

Vertex Pharma (NASDAQ: VRTX)
Leerink Partners analyst, Geoffrey Porges, maintained his Outperform rating on Vertex (NASDAQ: VRTX) after the company delivered a modest revenue (+2%) and earnings (+29%/$0.06) beat vs. consensus. The company’s key products, Kalydeco and Orkambi, experienced sequential and year-over-year growth, with Kalydeco up by 16% compared to Q2 2015 and Orkambi growing 10% compared to Q1. Overall these results are likely to come as a relief to investors after a disappointing early slowing in Orkambi’s growth trajectory – news that should provide a tailwind heading into H2 2016 where management repeatedly emphasized that incremental revenue opportunities and regulatory events were likely.

The analyst's positive thesis on VRTX reflects his bullish long-term view of the company’s cystic fibrosis (CF) portfolio, its profitability and cash flow potential, and yesterday’s results and guidance continue to support this view. The analyst is maintaining his Outperform rating but pushing down the revenue and earnings forecasts based on the continued slow emergence of ex-US revenue for Orkambi, and the company’s updated later timeline for filing Vx661 (H2 2017).

The price target increased to $113.00 (from $104.00) based on a higher probability of success with the company's "triple combination"

For an analyst ratings summary and ratings history on Vertex click here. For more ratings news on Vertex click here.

Shares of Vertex closed at $96.01 yesterday.

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