Despite a few setbacks, Vertex Pharmaceuticals (VRTX 0.77%) performed pretty well last year, although it lagged the S&P 500. However, things could be very different in 2026. Thanks to several catalysts and potential regulatory progress, the biotech could see its shares jump significantly this year. Here's why 2026 could be the year of Vertex Pharmaceuticals.
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Vertex Pharmaceuticals' late-stage pipeline
Vertex Pharmaceuticals' strategy is to develop medicines in areas with high unmet needs. The company has dominated the market for cystic fibrosis (CF) -- a rare disease that affects internal organs -- for over a decade. But the biotech has sought to diversify its product lineup, and it has been somewhat successful in recent years. Vertex Pharmaceuticals could make another giant leap toward that goal this year. The company's late-stage pipeline features zimislecel, inaxaplin, and povetacicept. Zimislecel is an investigational medicine for type 1 diabetes.
In clinical trials, it has shown the ability to restore patients' insulin-producing capacity -- or at least, it has significantly decreased insulin dependence. Vertex could submit applications for approval for this medicine this year. Inaxaplin, an investigational therapy for APOL-1-mediated kidney disease, is currently in a phase 2/3 clinical trial. The company plans to release an interim analysis of this study this year and to proceed with a request for accelerated approval if it is positive.
NASDAQ: VRTX
Key Data Points
The biotech has the same plan for povetacicept, a potential drug for IgA nephropathy (also a kidney disease). If the interim analysis of its ongoing late-stage study is strong, Vertex will seek accelerated approval. Note that across all three areas, Vertex would be making a breakthrough. There are no approved therapies that treat the underlying causes of APOL-1-mediated kidney disease or IgA nephropathy, and these conditions affect more patients than CF, the market where Vertex Pharmaceuticals found tremendous success. That's why, if the company's late-stage trials go as planned, the stock could soar.
There is more to look forward to
Vertex Pharmaceuticals' financial results should remain strong throughout the year. It still has a meaningful market to address in CF. Its launch of Journavx -- a pain medicine launched last year -- should make progress, while Casgevy, a gene-editing therapy for two rare blood diseases, could also start making a modest impact on its financial results. Vertex Pharmaceuticals has other pipeline candidates as well. Of course, the company may face clinical setbacks, as it did last year.
But even if everything doesn't go the way it is supposed to for the company this year, Vertex's underlying business, deep pipeline, and strategy that has proved successful before should allow it to deliver strong returns over the long run.
