Vertex Pharmaceuticals: 7 Irresistible Reasons to Buy This Dip Like a Pro
Big Pharma's best-kept secret just got cheaper—time to pounce.
Blockbuster pipeline? Check. Patent moat? Locked. Cash flow? A firehose. Here's why Vertex (VRTX) is trading at a discount smarter investors won't ignore.
1.
CFTR Dominance Goes Brrr
The cystic fibrosis franchise keeps minting money—last quarter's $2.3B revenue proved the combo therapies aren't just science, they're ATMs.
2.
CRISPR Endgame Plays Out
Vertex's Casgevy already curing sickle cell? That's not a drug—it's a $2.8M-per-patient lifetime value bomb waiting to detonate.
3.
Diabetes Disruption Inbound
VX-880's phase 3 data could make insulin pumps obsolete—and send shorts scrambling.
4.
Cash Cushion for Chaos
$11.4B in liquidity means Vertex buys the dip… while others beg for funding.
5.
FDA Fast-Track Addiction
Six—yes, six—priority review vouchers stockpiled. Bureaucratic red tape? More like green lights ahead.
6.
Short-Seller Kryptonite
Institutional ownership hit 92% last month. When BlackRock and Vanguard go all-in, the 'smart money' narrative collapses.
7.
The Ultimate Hedge
While crypto bros pray for ETF approvals, Vertex shareholders cash royalty checks from actual revenue.
Bottom line: This isn't a stock—it's a wealth-creation machine trading at 22% off 2024 highs. The real risk? Watching from the sidelines.
1. The bad news wasn't as horrible as the sell-off indicated
One of Vertex's pipeline disappointments was that VX-993 didn't meet the primary endpoint in a phase 2 study evaluating the NaV1.8 pain signal inhibitor in treating acute pain following bunionectomy surgery. The other bad news was that the U.S. Food and Drug Administration (FDA) doesn't see a path for Vertex to obtain a broad label in peripheral neuropathic pain (PNP) for suzetrigine at this point.
Vertex won't MOVE forward with VX-993 as monotherapy in treating acute pain now. However, it's not the end of the world for a phase 2 program to flop. The company already markets Journavx (suzetregine) in treating acute pain.
Also, Vertex isn't giving up on getting a broad PNP label for suzetrigine. It's regrouping, though, and prioritizing diabetic peripheral neuropathy (DPN) as its first PNP indication.
The company plans to quickly initiate a second DPN phase 3 study. But Vertex will also work with the FDA to expand the DPN indication to add other neuropathic pain conditions and hopefully find a way to win a broad PNP label.
2. Journavx appears to be on track to become a megablockbuster
Meanwhile, Journavx's commercial launch is humming along. Vertex CEO Reshma Kewalramani said in the Q2 earnings call that "formulary coverage is going really well," and "frankly, faster than I WOULD have expected." She mentioned that the company's phase 4 confirmatory study data looks "really good, not only in terms of pain control, but also in terms of reducing opioid use."
Chief Commercial Officer Duncan McKechnie revealed that Vertex is cranking up its marketing for Journavx and adding field support in response to the strong contracting and formula progress that has been achieved. He said the company is "receiving incredibly positive feedback from physicians and patients on how well Journavx is working for them clinically." According to McKechnie, Vertex remains highly confident that the pain drug will be another multibillion-dollar franchise for the company.
3. Vertex continues to grow robustly
Almost lost in the shadow of the pipeline disappointments was the fact that Vertex continues to grow robustly. The company's revenue jumped 12% year over year in Q2 to $2.96 billion. It posted adjusted profits of $1.2 billion, a huge improvement from the $3.3 billion loss in the prior-year period (which was due to the Alpine acquisition).
4. Vertex's CF dominance is more secure than ever
Vertex's dominance in cystic fibrosis (CF) appears to be more secure than ever. New CF drug Alyftrek is gaining momentum in the marketplace, especially with patients who haven't begun treatment with CFTR modulators or previously discontinued use of one of Vertex's other CF therapies.
Alyftrek isn't just Vertex's best CF therapy yet. It should also be the company's most profitable CF drug because of a lower royalty burden, and its patents run through 2039.
In addition, Vertex plans to restart the phase 1 dosing of VX-522 after a temporary pause. This messenger RNA therapy holds the potential to treat the 5,000 or so CF patients who can't benefit from Vertex's existing drugs.
5. Two new drugs could be on the way soon
Vertex could soon add two new drugs with huge potential to its lineup. The company expects to file for regulatory approvals of zimislecel in treating severe type 1 diabetes in 2026. If all goes well with an interim analysis of a phase 3 study evaluating povetacicept in treating IgA nephropathy, Vertex could also file for accelerated approval of the drug in the first half of next year.
Image source: Getty Images.
6. Trump administration policies aren't a problem for the company
Some drugmakers could be hit hard by the TRUMP administration's tariffs on pharmaceutical imports and its plans to implement most-favored-nation (MFN) drug pricing. But not Vertex.
CFO Charlie Wagner said in the Q2 call, "We expect an immaterial cost impact from tariffs in 2025 based on what we know today due to our significant U.S. presence and our geographically diverse supply chain." As for MFN, Kewalramani confirmed that Vertex didn't receive a letter that President Trump sent to multiple drugmakers demanding that they offer their medications to Medicare, Medicaid, and private insurers in the U.S. at the same low prices they charge outside the U.S.
7. The price is right
Finally, the price is right to buy Vertex on the dip. The stock's price-to-earnings-to-growth (PEG) ratio, which is based on five-year earnings growth projections of analysts surveyed by, is a super-low 0.58. I don't think Vertex's pipeline disappointments will change the fact that this biotech stock remains attractively valued with its growth prospects factored into the equation.
