The past couple of years have been volatile for Vertex Pharmaceuticals (NASDAQ: VRTX). Between clinical setbacks and worse-than-expected financial results, the company has sometimes disappointed investors. However, Vertex has always bounced back, and it recently hit a new all-time high, though it has since receded from that.
Even so, the future is bright for the drugmaker. Here is why there is plenty more upside ahead. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Vertex Pharmaceuticals is best known for developing medicines that treat cystic fibrosis (CF), an area where it has no meaningful competition.
Some investors worry that this might change soon, as several drugmakers are looking to launch competing CF medicines. Sionna Therapeutics, a much smaller biotech company, has an entire pipeline dedicated to that. Other companies are also on this trail, including Krystal Biotech.
However, for now, Vertex continues to dominate this field and generate significant revenue and earnings. In the second quarter, the company's sales came in at $3.33 billion, up 12% year over year. Vertex's earnings per share were $4.31, about 8% higher than the year-ago period.
Potential competition in the CF area poses a significant risk to the company, given that CF revenue totaled $3.2 billion during the period. But it's not the first time that Vertex has faced this risk. Many previous attempts to challenge the company in CF have failed.
Extract — continue reading at the source.
