Vertex Pharmaceuticals Incorporated VRTX is well positioned to bring its cystic fibrosis (CF) drugs, Trikafta, Orkambi Kalydeco and Symdeko, to many more patients while advancing its broad pipeline in additional diseases in 2020.

Notably, the company met most of its goals for 2019. The stock rallied 32.1% in 2019 compared with the industry’s increase of 4.6%.

Consistent positive regulatory approvals have led to an increase in the eligible patient population for Vertex’s CF drugs in the past 2-3 years. In 2019, Vertex received nine new regulatory approvals or label expansions for its CF medicines globally. With consistent expansion in patient population, Vertex’s CF product revenues rose 32% in 2019. In 2019, Vertex entered into a number of key reimbursement agreements for its CF medicines in important ex-U.S. countries like England and France, which expanded access to its CF medicines and removed a major overhang on the stock.

While consistent label expansion of CF drugs drove sales growth in 2019, in 2020, sales are expected to be primarily driven by the uptake of Trikafta, its newly launched triple combination CF regimen, as well as higher international revenues due to additional ex-U.S. reimbursement arrangements.

Trikafta was approved by the FDA for patients 12 years and older in October 2019, five months ahead of the PDUFA date. Importantly, Trikafta’s early approval and launch was the most significant milestone for Vertex and the drug generated $420 million in sales in just around two months on the market. In the EU, a regulatory application for Trikafta is under review with approval expected in 2020.

Meanwhile, phase III studies are ongoing to evaluate Trikafta in children with CF aged 6 through 11. A regulatory application seeking approval for the pediatric patient population is expected to be filed in 2020, which, if approved, will increase the drug’s eligible patient population further.

Trikafta is crucial for Vertex’s long-term growth as it has the potential to treat up to 90% of CF patients.

Meanwhile, Symdeko, a combination of tezacaftor and ivacaftor, and Vertex’s third CF medicine was approved in February 2018. Symdeko, in a very short time, became the primary driver of CF revenues and generated sales of $1.4 billion in 2019.

While Vertex is mainly focused on developing and strengthening its CF franchise, the company also has a early-stage portfolio in other specialty disease areas like pain, alpha-1 antitrypsin deficiency, sickle cell disease, beta-thalassemia and APOL1-mediated kidney diseases. Vertex’s non-CF pipeline is also progressing rapidly with data in multiple diseases expected in 2020.

Meanwhile, Vertex’s success in CF has given it the financial strength to invest in both internal and external innovation. Vertex has entered into multiple agreements in the past couple of years to access new external scientific technologies, programs and expertise in multiple diseases to complement its internal pipeline. It has collaborations with CRISPR Therapeutics CRSP, Arbor Biotechnologies, Moderna MRNA and Kymera Therapeutics.  Vertex also owns equity investments in CRISPR and Moderna.

The numbers also seem to be in favor of the stock. Vertex carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

After the impressive share price increase in 2019, Vertex’s stock has further shot up 9.6% this year so far. Its earnings estimates have risen 13.3% for 2020 and almost 12% for 2021 in the past 30 days.

Another Stock to Consider

Another top-ranked large biotech stock is Regeneron REGN. It sports a Zacks Rank #1. Its earnings estimates have risen 3.1% for 2020 and 3% for 2021 in the past 30 days.

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