The past decade has been a game-changing one for Vertex Pharmaceuticals (VRTX 0.86%). The biotech won approval for its first cystic fibrosis (CF) drug -- Kalydeco -- back in 2012 and has since gained the regulatory nod for four more and become the global leader in the CF market. The company also showed its strengths beyond this specialty area, collecting approvals for a gene-editing therapy for blood disorders a little over a year ago and a pain treatment just recently.
Vertex's portfolio of CF drugs has fueled earnings performance over the past decade, helping the company grow product revenue to more than $11 billion in the 2024 full year. It's likely these CF drugs will continue to act as the company's main growth driver in the near term. But it's logical to ask: What's Vertex's long-term story? Where will the company be in 10 years, for example? Let's find out.
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Vertex's cystic fibrosis leadership
First, a bit of background on Vertex's CF program since it's so central to the company's growth. The company dominates this market thanks to the proven ability of its drugs to change the outlook for people with CF.
Vertex's products are known as cystic fibrosis transmembrane conductance regulator modulators, or CFTR modulators, and they "fix" the malfunctioning protein made by the CFTR gene. Now the tricky thing about CF is different gene mutations cause different problems with the protein, but Vertex has managed to develop medicines that are able to treat about 90% of CF patients. And its most recently approved drug -- Alyftrek -- is able to address 31 genetic mutations that previously haven't responded to CFTR modulators.
So, Vertex's medicines have been game-changing for patients and for the company's earnings growth. A decade from now, considering Vertex's pipeline, the company could potentially offer a treatment for every CF patient. Today, about 5,000 people with the disease don't make any CFTR protein, so they don't respond to CFTR modulators. But Vertex is working on a solution for them. In a phase 1 trial, the company is studying a CFTR mRNA that could be delivered directly to the lungs through lipid nanoparticles. This is in partnership with mRNA giant, Moderna.
And the company has other small molecules and gene therapies in research stages, something that could extend dominance in CF well into the future. Back in 2021, Vertex already said its intellectual property supported its leadership in the space into the late 2030s. All of this means there's reason to be confident about Vertex's ongoing dominance in CF, and this should continue to steadily power revenue growth in the coming decade.
A new product to supercharge growth
On top of this, one program in particular could supercharge Vertex's revenue over the next 10 years. It focuses on a very common problem that has limited treatment options: pain. Today's over-the-counter choices sometimes aren't effective and even come with side effects -- such as liver toxicity in the case of acetaminophen. And prescription opioids have been linked to addiction, making them drugs many patients and doctors aim to avoid.
The FDA granted Journavx (formerly known as suzetrigine), a non-opioid painkiller, approval for moderate-to-severe acute pain in adults, and Vertex aims to gain a nod in the area of chronic pain in the coming years too. Journavx halts pain signaling in the peripheral nervous system before these signals get to the brain. And since the drug works outside of the brain, it isn't associated with addiction.
Vertex expects this approval to be the beginning of a multibillion-dollar franchise, and it's clear this story could fully unfold over the coming decade.
NASDAQ: VRTX
Key Data Points
Another multibillion-dollar opportunity
The company's blood disorders treatment -- Casgevy -- also is a multibillion-dollar opportunity, according to Vertex. The drug launch unfolded last year, and since treatment involves a lengthy process, revenue growth hasn't been immediate. But progress in bringing patients on board has been steady, so Casgevy could play a key role in growth over the next several years.
Now, let's get back to our question: Where will Vertex be in 10 years? Considering the points I mentioned above, Vertex looks like it's heading into a new phase of growth driven by CF drugs and its two new products outside of that specialty area. It's important to note the company is also working on several other programs in the pipeline that could result in products and revenue in the coming years. And with cash of more than $11 billion as of the recent quarter, Vertex has the resources to fund its development.
So, I would expect Vertex's annual revenue to continue to climb significantly higher over the coming decade, and share performance should follow. This biotech is on track to be on top of its game in 10 years, and that makes it a great stock to get in on now.
