Vertex (VRTX) PT Lowered to $522 at BofA Securities

BofA Securities analyst Geoff Meacham lowered the price target on Vertex (NASDAQ: VRTX) to $522.00 (from $545.00) while maintaining a Buy rating.

The analyst comments "Vertex (VRTX) reported topline ph 2 results for suzetrigine (suze’) in lumbosacral radiculopathy (LSR). Although suze’ showed a clinically meaningful reduction in pain from baseline (≥2pt NPRS reduction), the response was undifferentiated from pbo. Mgmt highlighted higher-than-expected pbo response, but notes that in a post-hoc analysis looking at sites with a lower pbo response (~40%), suze’ demonstrated a clear separation from pbo. VRTX guides to ongoing work to come up with an innovative ph 3 design that they think minimizes placebo response (pbo run-in, enriching for responders, withdraws of study drug, etc.). While the study was not designed to detect a difference, our KOLs were looking to see at least a numerical benefit in pain reduction over pbo. We think the post-hoc analysis introduces some new variables including what made these sites different and if this dynamic is reproduceable. We also note that moving into phase 3 means a larger patient group with potentially more variability in patient profiles. Therefore, while we continue to see value in the promise of a differentiated pain platform, we now take a more conservative view as we await more visibility on the data and feedback from FDA. As such we lower our pipeline value for VRTX by 30% (to $14bn) which results in our new $522 PO (prev. $545). We reiterate our Buy, noting our thesis continues to be driven by the company’s strong commercial execution in cystic fibrosis."

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