Vertex Pharmaceuticals is expanding beyond its cystic fibrosis drugs, although the franchise continues to perform very well for the company. In this segment from "This Week in Healthcare," recorded on Jan. 31, Motley Fool contributors Brian Orelli and Keith Speights discuss the new markets that could be highly profitable for Vertex.
Brian Orelli: Vertex Pharmaceuticals also reported fourth-quarter earnings last week. It looks like the cystic fibrosis specialists had another good quarter.
Keith Speights: As a Vertex shareholder, I was really glad to see the company turned in a strong Q4 performance. Vertex reported revenue of nearly $2.1 billion. That was up 27 percent year-over-year, so strong growth there. Non-GAAP earnings jumped 31 percent to $866 million. On a per-share basis, non-GAAP earnings were 34 percent to $3.37. Unsurprisingly, Vertex's newest cystic fibrosis drug, Trikafta, Kaftrio, was the star of the quarter, sales of that CF drug vaulted 55 percent higher year-over-year to almost $1.7 billion. This growth stemmed from a couple of things. There were launches of the drug in additional international markets. Also, Vertex was able to launch Trikafta in treating children ages 6-11 in the U.S. market. Those two factors are what really drove sales of this drug a lot higher in the quarter.
I think we can look for continued momentum throughout this year, but growth will probably slow, at least to some extent. Vertex projects 2022 revenue of $8.5 billion at the midpoint of its guidance range. That's up around 12 percent year-over-year. There are several potential positive developments, though, that we should look for with Vertex on the way. The company has another promising cystic fibrosis therapy that should advance into late-stage testing either later this year or maybe early next year. It can provide even greater clinical benefit than Trikafta does. It could offer convenient once daily dosing. It could be more profitable for Vertex as company, we won't have to pay as much in royalties for it. That's one thing to look for.
The other big story is branching out beyond CF, Vertex and its partner, CRISPR Therapeutics are still saying they plan to file for approval of gene editing therapy CTX001, and treating sickle cell disease and Beta-thalassemia later this year. That would be a big story for Vertex. Then the company is also advancing its VX-147 product into late-stage testing this quarter and treating APOL1 mediated kidney disease. Vertex has a lot going on. It's moving out beyond cystic fibrosis, but it's CF franchise continues to perform very well.
Brian Orelli: I mean, I think the other stuff beyond cystic fibrosis, I think is what investors should really be focused on because sales of cystic fibrosis drugs keep improving. But I think at some point that they're definitely going to slow down because they're going to max out the market at this coming up here.
Keith Speights: I'm not sure off the top of my head what the estimates are for sales of CTX001, but I would think that that's going to be for sure blockbuster. Then this VX-147, that's the genetic kidney disease drug. I think that, possibly, if all goes well in late-stage testing, that could be an even bigger opportunity for Vertex than its CF franchise. I think they are around 100,000 patients in the U.S. and North America and Europe that have these kidney diseases that are caused by variance to the APLL1 gene. By comparison, I think they are around 83,000 patients worldwide with cystic fibrosis, so this could be a bigger market for Vertex.
