Vertex Pharmaceuticals (VRTX 0.71%) has been on a roll so far in 2020. The big biotech delivered strong growth in the first quarter. It received a positive opinion from the European Medical Agency's Committee for Medicinal Products for Human Use regarding the potential approval of cystic fibrosis (CF) drug Kaftrio. And its shares have soared nearly 29% year to date.

The company announced its second-quarter results after the market closed on Thursday. It looks like Vertex's good times will keep rolling. Here are the highlights from the biotech's Q2 update.

Pharmacist filling capsules with dropper.

Image Source: Getty Images.

By the numbers

Vertex reported revenue of $1.5 billion in the second quarter, up 62% from revenue of $941.3 million in the prior-year period. This result easily topped the average analyst's revenue estimate of $1.39 billion.

The company announced Q2 net income of $837 million, or $3.18 per share, based on generally accepted accounting principles (GAAP). Vertex's GAAP earnings more than tripled the net income of $267 million, or $1.03 per share, posted in the second quarter of 2019.

Vertex recorded adjusted net income in Q2 of $687 million, or $2.61 per share. The biotech's non-GAAP results more than doubled its adjusted earnings of $327 million, or $1.26 per share, from the same period last year. Its adjusted earnings also blew past the consensus Wall Street estimate of $2.07 per share.

This impressive performance enabled Vertex to add to its cash stockpile. The company reported cash, cash equivalents, and marketable securities totaling $5.5 billion as of June 30, 2020, up from $1.6 billion at the end of 2019.

Behind the numbers

Sales declined for three out of four of Vertex's approved CF drugs in the second quarter. The worst hit was Symdeko/Symkevi, with sales plunging 52% year over year. Sales of Orkambi sank 27% lower in Q2, while sales of Kalydeco fell by nearly 23%.

None of that seemingly bad news mattered. Why? Trikafta more than made up for all of these declines. Vertex's newest CF drug generated sales of $918 million in Q2 -- its second full quarter on the market. CEO Reshma Kewalramani said, "We have seen remarkable uptake of Trikafta in the U.S., with the majority of eligible patients now taking this medicine."

Vertex's bottom line improved even more than its top line, thanks to more moderate increases in spending compared to the prior-year period. The company's adjusted earnings increased less than its GAAP earnings, primarily due to a higher stock compensation expense in the recent quarter than recorded in the same period of 2019.

Looking ahead

After Vertex's outstanding Q2 performance, it's not surprising the company upped its full-year 2020 outlook. The company now anticipates revenue will be between $5.7 billion and $5.9 billion. Vertex's previous guidance projected full-year revenue of between $5.3 billion and $5.6 billion.

There are plenty of potential catalysts on the way for the biotech stock. The biggest is the expected European approval of Kaftrio (marketed under the Trikafta brand in the U.S.). Vertex already had a reimbursement agreement in place in England that will make the CF drug available to patients in the country soon after the anticipated European Commission thumbs up. The company also hopes to soon win European approval for Symkevi in treating CF patients ages six through 11. 

Vertex plans to announce data from its late-stage study of Trikafta in children with CF ages six through 11 who have two copies of the F508del mutation or one F508del mutation and one minimal function mutation in the second half of 2020. Assuming the results are positive, the company intends to file for Food and Drug Administration (FDA) approval in this additional indication.

In addition, Vertex could have good news in the near future for its pipeline candidates that could drive future growth. Vertex and its partner, CRISPR Therapeutics, expect to announce results from additional patients in phase 1/2 clinical trials evaluating gene-editing therapy CTX001 in treating rare blood diseases beta-thalassemia and sickle cell disease. The big biotech also plans to file for an FDA green light to begin early-stage clinical testing for its experimental type 1 diabetes therapy later this year.