Vertex Pharmaceuticals (VRTX +1.27%) has come a long way in the past ten years. In a little over a decade, the company has built a cystic fibrosis (CF) empire, commercializing four drugs for the disease that together generate blockbuster revenue . And the share price has soared more than 400%, scoring a big win for long-term investors.
Now, whether you're a Vertex investor or a potential one, you may be wondering what's next for this big biotech. The company recently started its expansion beyond CF with a U.K. regulatory nod for exa-cel, a gene-editing treatment for blood disorders. And Vertex has several candidates across treatment areas in the pipeline. Where will the company be in 10 years? Let's find out.
Image source: Getty Images.
Vertex's biggest blockbuster
First, we'll start out with the CF portfolio -- Vertex is a giant here today and likely will be a decade from now too. Here's why. The company's latest CF treatment and biggest blockbuster, Trikafta, won approval in 2019, and patents should protect it until 2037.
Even better, Trikafta's biggest potential threat right now is a treatment being developed by... guess who... Vertex. The company is evaluating this candidate -- a once-daily pill versus twice-daily Trikafta -- in pivotal trials today by directly comparing it to the blockbuster. If the new candidate beats Trikafta, we could imagine Vertex's dominance in CF extending well beyond 2037.
Along with partner Moderna, Vertex also is investigating an mRNA inhaled candidate that could treat the 5,000 patients who can't be helped by the CF specialist's current treatments. Success here could further broaden Vertex's dominance in CF and add to the billions of dollars in earnings the portfolio generates for the company. This candidate just began clinical trials, so it's still early stage, but if all goes well, in a decade, it could already be among Vertex's commercialized products.
Today, CF treatments generate nearly $9 billion in annual revenue for Vertex, and the company is highly profitable, with more than $3 billion in net income. With cash of more than $13 billion in the most recent quarter, Vertex also has what it takes to support pipeline development and bring new products to market. So, we don't have to worry about a promising program falling by the wayside due to lack of resources.
NASDAQ: VRTX
Key Data Points
Days away from an exa-cel decision
In a decade, Vertex also may have brought several other products outside of CF to market. Today, the company is days away from a U.S. regulatory decision on exa-cel for sickle cell disease -- and the agency will decide on exa-cel for beta thalassemia in March.
The company has partnered with CRISPR Therapeutics on the program, but Vertex takes a 60% share of potential profit as part of the deal. Exa-cel probably won't reach the revenue levels of the company's CF drugs -- analysts predict sales of about $1.7 billion later this decade -- but it still could be a valuable contributor to earnings in the near term and in ten years. And it also would show that Vertex can indeed succeed beyond CF.
Vertex has several programs in the pipeline, but I'll talk about just two here: candidates for pain and type 1 diabetes (T1D). The pain candidate is involved in pivotal trials right now, so if results are solid, this surely could be a product on the market in the near term and one that could generate billions of dollars over time. Pain is a problem we've all had, and treatment options today are limited. So, Vertex's non-opioid candidate could win big in this market.
As for T1D, this program stands out because it involves replacing a patient's destroyed islet cells with stem cell-derived islet cells that produce insulin -- creating a functional cure. Vertex is studying three approaches, with two of the candidates in phase 1/2 trials right now. If trials are successful, we could imagine this product joining Vertex's portfolio a decade from now or maybe even sooner.
A cystic fibrosis leader
All of this means that in ten years, Vertex could not only continue to be a CF powerhouse, but the company also may sell other important products that could lead to ongoing revenue growth.
Of course, certain candidates may not make it to the finish line -- this is a risk all biotech and pharma companies face. But Vertex has made it to late-stage development with certain key programs -- such as exa-cel and the pain candidate -- which reduces some of the risk. And the pipeline remains broad enough to offer opportunities even if certain projects fail.
So, there's reason to hang onto your Vertex shares and benefit from what looks like an exciting decade to come.
