In a research report released Friday, Canaccord Genuity analyst Adam Walsh initiated coverage on shares of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) with a Buy rating and price target of $150, which represents a potential upside of 19% from where the stock is currently trading.
Walsh wrote, “With a dominant and expanding cystic fibrosis (CF) franchise, potential near-term VX809/Kalydeco approval, a strong balance sheet, and expected profitability in 4Q15 with significant EPS growth thereafter (est. $10.80 in FY18), Vertex is well-positioned for upside, in our view. The key near-term catalyst is potential US/EU approval and launch of VX809/Kalydeco into the largest segment of the CF population (FDA panel May 12; PDUFA July 5; EU decision 4Q15).”
Furthermore, “Our KOL (key opinion leader) contacts expect on-time approvals and >90% peak penetration based on strong P3 Traffic/Transport data. We assume the combination will be priced at a ~20% discount to Kalydeco, which yields our peak sales estimate of >$5B. In contrast, our reimbursement specialist KOL believes a price equivalent to Kalydeco is more likely. If our KOL is correct, there may be upside to our peak sales and EPS estimates, as well as valuation.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Adam Walsh has a total average return of 7.1% and a 77.8% success rate. Walsh is ranked #1749 out of 3571 analysts.