Why Vertex Pharmaceuticals Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology firm Vertex Pharmaceuticals (Nasdaq: VRTX  ) dipped as much as 15% following a clarification from the company regarding the efficacy of its cystic fibrosis drug.

So what: In May, Vertex rallied considerably on news that its cystic fibrosis drug, Kalydeco, showed statistically positive results in mid-stage studies. However, news released today from Vertex demonstrates that Kalydeco may not be as effective as the original data had implied. Vertex cited a misinterpretation on its part and with its analysis vendor as the reason for the data revision. Wall Street's other gripe is the data between the two sets isn't very comparable, making an assessment of this revision even more difficult.

Now what: Today's news took Wall Street by surprise as things looked to be going Vertex's way. Although sales of Vertex's FDA-approved hepatitis-C drug, Incivek, have likely peaked, it's Kalydeco that appeared to be the icing on the cake for a potential pharmaceutical suitor. Today's news probably takes near-term buyout speculation off the table until we get more discernible data from Vertex.

Craving more input? Start by adding Vertex Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Motley Fool newsletter services have recommended buying shares of Vertex Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1927553, ~/Articles/ArticleHandler.aspx, 10/26/2016 9:58:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,095.17 -74.10 -0.41%
S&P 500 2,135.37 -7.79 -0.36%
NASD 5,259.15 -24.25 -0.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 9:43 AM
VRTX $80.45 Up +1.74 +2.20%
Vertex Pharmaceuti… CAPS Rating: ****