Cowen Analyst Bullish On Vertex (VRTX) Stock After Company Releases Favorable Data


Biopharmaceutical Vertex’ (VRTX) is working on a trial called Phase III VX-659 and Cowen analyst Phil Nadeau calls some recently released data “Good as Hoped,” reiterating an Outperform rating for the stock with a price target of $200. The medication, currently called VX-659 triple combination regimen, is aimed at improving lung function. (To watch Nadeau’s track record, click here)

The first Phase III trial is randomized with double-blind, placebo-controlled study for patients age 12 and over with one mutation and one minimal function mutation called “HET-Min.” The data collected from the time of the analysis was based off of 380 patients who had completed the week 4 visit of the study. At the endpoint of the trial, the treatment produced a mean improvement of 14.0 percentage points compared to those taking the placebo, which came to less than 0.0001. In the second trial of Phase III, there was a similar set-up. The mean absolute change in ppFEV1 was 10.0 percentage points relative to placebo/tezacaftor/ivacaftor also at week 4, which came to less than 0.0001 again.

“Our sense is that investors expected VX-659 to produce at least a 10 percentage point placebo-adjusted increase in FEV1 in the Het Min trial, and that few investors thought that the FEV1 improvement would be in the mid-teens percentage points. Therefore today’s efficacy results came in at the high end of expectations, arguably as good as any investors had hoped. Moreover, with VX-659 producing an incremental 10 percentage point improvement when added to tezacaftor/ ivacaftor (Symdeko) in F508del Homozygous patients, the triple regimen also produced a dramatic efficacy benefit in this population in which Orkambi and Symdeko are currently standard of care.”

Nadeau says his consultants consider cystic fibrosis medication Kalydeco a breakthrough for those who suffer from G551D and other mutations and that with today’s results, the new treatment has demonstrated it could dramatically improve the quality of life and likely lengthen the lifespan of most cystic fibrosis patients. “With approximately 86% of cystic fibrosis patients having at least one F508del allele, including approximately 30% of CF patients who are “Het Min” and for whom there are currently no effective and safe therapies, the VX-659 triple regimen appears to be a major advance for most cystic fibrosis patients,” Nadeau added.

The analyst also notes Vertex’s cystic fibrosis portfolio is in the industry’s lead when it comes to revenue and EPS growth and it remains a top large cap biotech pick.  This is reflected on the Street. TipRanks reveals the analyst consensus considers this stock a Strong Buy, with a consensus price target of $206, showing an 19% upside. Out of 13 analysts surveyed, 12 are bullish and only one is sidelined. (See VRTX’s price targets and analyst ratings on TipRanks)

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