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2 Reasons to Buy Vertex Pharmaceuticals Now

Even as the general market falls, some stocks have managed to fight the trend. In fact, some have even thrived. One particular example is Vertex Pharmaceuticals (NASDAQ: VRTX). The biotech company's shares have climbed about 25% so far this year.

This is a complete turnaround from earlier times. The stock fell more than 30% from October 2020 through October of last year. That's as investors worried about the biotech's ability to expand beyond its main business of cystic fibrosis (CF) treatment. So the tide has turned for the company. And this could be just the start. Here are two reasons to get in on this story now.

1. Growth ahead for the main business

Investors might not like Vertex's total dependence on one therapeutic area. But it's important to keep in mind that growth is far from over for Vertex's CF business. The company is the global market leader. And it expects to stay in that position until at least the late 2030s.

Vertex's blockbuster Trikafta has the potential to treat 90% of CF patients. It hasn't yet made its way to all patients. In fact, the company said in its most recent earnings call that 25,000 more people in North America, Europe, and Australia could be helped by Trikafta.

What's holding them back? Some countries just recently started reimbursing or haven't yet started reimbursing for the treatment. And younger age groups aren't yet eligible for the drug -- but they could be eventually through label expansions. All of this means there is plenty of growth ahead for Trikafta.

And here's some even better news. The biggest threat to Trikafta's dominance is a candidate being developed by...guess who? Vertex. The candidate, right now in phase 3 trials, might be even better than Trikafta. Its once-daily regimen would make it a convenient option for patients.

So if you buy shares of Vertex now, you're likely to benefit from growth in its CF business well into the future.

2. A huge catalyst lies ahead

Investors aren't the only ones who want Vertex to expand into other treatment areas. The company aims for that, too. It is working on candidates in a variety of areas, including blood disorders, pain, and type 1 diabetes.

Right here, I'll focus on the company's candidate for the treatment of blood disorders sickle cell disease and beta thalassemia. That's because this candidate represents a catalyst just ahead. Vertex and partner CRISPR Therapeutics aim to submit their gene-editing candidate for regulatory approval by the end of this year.

Exa-cel (formerly called CTX001) involves the editing of a patient's own hematopoietic stem and progenitor cells. The edited cells are then given to the patient by infusion.

In clinical studies, exa-cel kept 42 of 44 beta thalassemia patients free from blood transfusions in the follow-up period of 1.2 months to 37.2 months. And exa-cel kept all 31 sickle cell patients free from painful blood-circulation crises throughout a similar follow-up period.

This potential product is a big deal for two reasons. First, treatment options today for blood disorders are limited. So, clearly, the opportunity for a product that works is huge. And what makes exa-cel even better is this: It's designed to be a one-time curative treatment. This should make it an attractive option for patients. And it could make the product a blockbuster for Vertex.

So what should investors expect?

Vertex already brings in billions of dollars in revenue and profit annually thanks to the CF business. Considering that business' prospects, this isn't likely to stop anytime soon. And if all goes smoothly with the exa-cel program, this potential product could make an already strong company even better.

Investors who get in on the stock now could benefit in the near term as the exa-cel story unfolds. But even better, they're likely to benefit over time.

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Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.


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