RBC Comments on Vertex (VRTX) Following Orkambi Briefing Docs

RBC Capital maintained an Outperform rating on Vertex (NASDAQ: VRTX) with a price target of $130. Shares weakened after the FDA posted Orkambi briefing docs, although they have since recovered. Analyst Michael J. Yee called the decline a buying opportunity.

Yee explained, "At first glance topics appear obvious: 1) asking on the magnitude of benefit; and 2) and comment on efficacy and safety. Interestingly, it also appears FDA’s voting questions are focused around whether the “combo” is adding any benefit over the “mono” kalydeco because in the Phase III program they were not tested head to head. Of course Kalydeco was tested previously where mono provided little/minimal benefit on FEV, exacerbations, etc. And combo is definitely better than both. So we believe the FDA is just trying to ask the panel “if” the evidence is enough to show that combo benefit is significantly better or proven better than mono alone."

The analyst continued, "Importantly - we think this is unlikely to block approval as VRTX has run major Phase III studies showing stat sig important clinically meaningful differences not just on FEV but also on very meaningful benefits like exacerbations, hospitalizations, etc. - that's actually what docs all say is meaningful and why it was so important that VRTX hit those. So it's possible that VRTX would have to do some "follow-up" studies to show it's "better" than mono but this is unlikely to block approval."

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 $125.05 yesterday.

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