Vertex Pharmaceuticals (VRTX 1.30%) is a great example of a biotech success story. The company has developed strength in a specialty area and, thanks to that, has delivered a track record of revenue and profit growth over the past decade. This is in cystic fibrosis (CF), an area where Vertex has secured leadership.
On top of that, in recent years, Vertex has proven that it has what it takes to expand into other treatment areas. The company won approval for gene editing treatment Casgevy for blood disorders and, most recently, for Journavx, a non-opioid drug for pain management.
Vertex makes a great investment for many reasons, but for one reason in particular, I would buy this stock and never sell.
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Vertex's successful expansion
As mentioned, Vertex has impressed investors over the past few years, showing it has the ability to expand beyond CF. Prior to this, a couple of candidate failures outside of CF prompted investors to worry about Vertex's expansion potential -- and that weighed on its stock. Since Vertex launched the products I mentioned earlier, and as the company built out its pipeline in areas from kidney disease to type 1 diabetes, investors regained confidence, and the stock took off. Over the past three years, Vertex shares have climbed more than 60%.
NASDAQ: VRTX
Key Data Points
Now, here's the reason I would buy and hold Vertex for the long term. It might surprise you when I say it doesn't have to do with the company's work beyond CF. Instead, I would hold onto this company for its ongoing strength and long-term prospects in the CF market. Though Vertex has made great progress in other areas, it's important to remember that its CF growth story is far from over.
The company has said that it has the intellectual property (IP) to secure its leadership through the late 2030s. Vertex continues to be an innovator in this space, with its latest CF drug, Alyftrek, even beating the efficacy of its biggest blockbuster, Trikafta. Now, both of those drugs are driving gains at Vertex, but the company isn't stopping here.
Helping 90% of patients
Alyftrek and Trikafta are able to help 90% of CF patients -- CF is linked to specific genetic mutations, and this makes it tricky for one drug to serve all patients. Vertex is working to address the needs of all patients, though, and it's progressing on a candidate meant to help those who can't take its current drugs. Vertex, with partner Moderna, is studying VX-522, an mRNA candidate in a phase 1/2 study and expects to report data this year.
Vertex's CF business already fuels billion-dollar earnings -- and potential new CF drugs, along with the company's solid IP, should keep this going well into the future. That's why I would buy and never sell this biotech winner.
