Vertex Earnings: Strong Demand for Trikafta/Kaftrio Drives Sales; Pipeline Continues to Make Progress

Vertex VRTX reported third-quarter results highlighted by strong uptake of its cystic fibrosis triple combination therapy, Trikafta/Kaftrio, in the United States and internationally. Quarterly product revenue of $2.48 billion represented a 6% increase from the prior-year period. Vertex’s results are tracking our expectations, and we maintain our fair value estimate of $314 per share.

Trikafta/Kaftrio accounted for about 92% of total sales during the quarter. We forecast about $9.85 billion in revenue for 2023, representing growth of 10% over 2022. Vertex’s lengthy patent protections and first-mover status in the lucrative cystic fibrosis market continue to support its narrow economic moat rating.

We maintain our positive outlook for Vertex’s gene-editing candidate, exa-cel, which is being developed in partnership with CRISPR Therapeutics for two blood diseases—transfusion-dependent beta thalassemia and sickle cell disease. We assign a 60% probability of approval to exa-cel and anticipate it could reach the market as early as 2024. We forecast exa-cel could hold strong pricing power and become a blockbuster opportunity. In Vertex’s agreement with CRISPR Therapeutics, Vertex would have a 60% share of exa-cel’s sales. Exa-cel has an FDA regulatory action date in December for the sickle cell disease indication and a target action date in March 2024 for the beta thalassemia indication.

We appreciate that Vertex is using its ample cash flow from its cystic fibrosis business to diversify its drug portfolio and invest in novel therapeutic areas. Vertex’s pipeline candidates are continuing to make progress, and we await additional data readouts for Vertex’s candidates across type 1 diabetes, pain, APOL1-mediated kidney disease, and Alpha-1 Antitrypsin Deficiency. On a probability-weighted basis, we forecast Vertex’s pipeline candidates could account for roughly 30% of total revenue by the end of our 10-year forecast period.