Vertex: If Royalty Rights Sold for $3.3B, How Much Is the CF Franchise Worth? Maxim’s Jason Kolbert Answers


In a research report published Monday, Maxim Group analyst Jason Kolbert reiterated a Buy rating on Vertex Pharmaceuticals (NASDAQ:VRTX) and raised his price target to $148 (from $122), which represents a potential upside of 25% from where the stock is currently trading.

Kolbert wrote, “The Cystic Fibrosis Foundation sold its royalty stream from Vertex to Royalty Pharma (private) for $3.3B. We see this valuation as an indicator that the CF franchise may be larger than we thought. So how much is it actually worth?” “

“We have spent time reworking our model to reflect Vertex guidance for YE2014, as well as to evaluate how the expansion of CF coverage to F508Δ homozygous with the ivacaftor/ lumacaftor roll-out coming in 2015 will impact revenues–a significant jump from 4,000 gating mutations.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Kolbert has a total average return of 4.9% and a 41.4% success rate. Kolbert has a 18.2% average return when recommending VRTX, and is ranked #752 out of 3388 analysts.

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