Shares of biotech giant Vertex Pharmaceuticals (VRTX 3.19%) fell by as much as 6.7% on Tuesday and closed the day's trading session down by 6.2%. The company reported its financial results for the fourth quarter of fiscal year 2020, and investors were not impressed with the drugmaker's performance.
During its fourth quarter, which ended on Dec. 31, 2020, Vertex Pharmaceuticals recorded revenue of $1.6 billion, an increase of roughly 15% compared to the prior-year quarter. The biotech's top line also came in above the $1.58 billion analysts were expecting on average. Meanwhile, Vertex Pharmaceuticals' adjusted net income was $661 million, or $2.51 on a per-share basis. While the healthcare giant's adjusted net income soared by 49% year over year, its adjusted earnings per share (EPS) fell short of the $2.59 analysts were expecting on average.
Perhaps this EPS miss explains the market reaction to Vertex Pharmaceuticals' earnings report, or maybe the 15% increase in the company's revenue wasn't enough to please its shareholders. Thanks to its monopoly in the market in treating the underlying causes of Cystic Fibrosis (CF), Vertex Pharmaceuticals has gotten investors used to dazzling top-line growth in recent years. The company projected that it would record revenue between $6.7 billion and $6.9 billion during 2021. Vertex Pharmaceuticals reported total revenue of $6.2 billion in 2020, a 49% increase compared to the previous fiscal year.
In my view, investors should remain optimistic regarding Vertex Pharmaceuticals' future. The biotech company is still the undisputed leader in the market for CF drugs, and it has several exciting pipeline candidates it is working on, including a potential treatment for sickle cell disease it is developing with Crispr Therapeutics. In short, it is still worth buying shares of Vertex Pharmaceuticals, especially following today's dip.