Vertex Pharmaceuticals (VRTX 1.75%) experienced several setbacks last year, sometimes following quarterly updates that weren't as strong as the market expected, or during which it also reported clinical trial failures. The company's shares are slightly in the red over the trailing-12-month period, partly due to these issues.
The biotech is set to release its fourth-quarter and full-year 2025 financial results on Thursday, Feb. 12. Will the stock dip again after its earnings, or should investors consider buying Vertex's shares ahead of its upcoming quarterly update?
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What should investors expect?
Vertex Pharmaceuticals remains the leader -- and the only player for that matter -- in the market for medicines for cystic fibrosis (CF). In its upcoming quarterly update, we should once again see that its CF drug portfolio drove decent top-line growth. Vertex Pharmaceuticals projected revenue of $11.9 billion to $12 billion for fiscal year 2025, implying year-over-year growth of at least 8%.
Could we see Vertex Pharmaceuticals landing toward the upper end of its guidance range, perhaps even beating it? If it does, it might be because of progress with other approved products, namely Casgevy, which treats two blood-related disorders, and Journavx for acute pain. Vertex Pharmaceuticals noted that more than 170 million U.S. patients already have third-party coverage for Journavx, which was approved last year.
Casgevy's uptake has been slower, as it is a gene-editing medicine, which is complex to administer. It will be important for investors to monitor the progress of these therapies in the fourth quarter and the upcoming fiscal year, regardless of what happens on Feb. 12. Whereas Vertex's core franchise delivers strong, predictable revenue growth, Casgevy and Journavx might lead to surprises for the company.
NASDAQ: VRTX
Key Data Points
The more important question
Vertex Pharmaceuticals should make significant clinical progress this year, namely with zimislecel, a potential medicine for Type 1 diabetes; inaxaplin, being developed to treat APOL-1-mediated kidney disease; and povetacicept, an investigational treatment for IgA nephropathy. We could see clinical or regulatory updates for zimislecel in the upcoming quarterly update. But which way will the stock move? It's hard to predict that. Investors should focus on a different question: Which way will Vertex's shares move over the next five years, regardless of what happens next week?
My view is that the biotech is an excellent stock to hold through the end of the decade and beyond. Its core franchise is still performing well, it has launched newer products that will slowly start contributing to its financial results, and it is inching closer to launching even more that will help boost its sales and profits. Vertex Pharmaceuticals' long-term prospects are attractive, and that's a good reason to buy the stock before Feb. 12.
