Vertex Pharmaceuticals has solidified its "blockbuster potential" for an alternative to opioids in pain treatment, an analyst said Wednesday as VRTX stock broke out on positive testing results.
The company tested three doses of its drug in patients with diabetic peripheral neuropathy, a chronic condition that causes pain in the legs, feet and hands. After 12 weeks, patients at all doses reported a better than 2-point reduction in pain on an 11-point scale, Vertex said in a news release.
Promisingly, more than 30% of patients had a 50% reduction in pain, and more than 20% of patients reported their pain declined by 70%.
There are more than 10 million patients in the U.S. with neuropathy, Piper Sandler analyst Christopher Raymond said in a report. Typically, they receive nonsteroidal anti-inflammatory drugs like aspirin or highly addictive opioids. Raymond estimates this is a $4 billion market.
"Given the benefit/risk profile demonstrated to date for (the drug called) VX-548, they see an opportunity for increased volume in the setting given the less than ideal (effectiveness)/tolerability profile of existing therapies," he said.
On today's stock market, VRTX stock surged 13.2% to 404.97. Shares broke out of a flat base with a buy point at 387.42, according to MarketSmith.com.
VRTX Stock Hits Record High
There are several points to quibble with in Vertex's study, RBC Capital Markets analyst Brian Abrahams said in a report.
Vertex pitted its drug against Lyrica, a popular treatment for neuropathy. But Lyrica underperformed its historical effectiveness in this study. Further, there was no dose-dependent response in the study — meaning patients who received a higher dose didn't have stronger improvements.
It's also important to note, about 10% of patients at one site were excluded from the analysis as they had low or outlier drug concentrations. This could make it difficult to determine the true effectiveness of Vertex's drug, he said.
Abrahams kept his sector perform rating and 347 price target on VRTX stock. It will be key to watch how Vertex tries to capitalize on its opportunity in pain treatment as it manages the aging cystic fibrosis treatment franchise, he said.
"We continue to see the data as net positive in that they validate VX-548's viability and multibillion-dollar potential, though we expect substantial debate over some of the outstanding questions and do not believe there is enough (evidence) yet to be completely convinced this will be a franchise with a commercial opportunity that can substantially move the needle on top of (cystic fibrosis)," he said.
Vertex Drug Appears Safer
Importantly, a greater percentage of Lyrica recipients experienced side effects than those given the Vertex drug — 27.8% vs. 14.5%, respectively.
But more patients who received the Vertex treatment had creatinine clearance decrease, indicating poor renal function, Leerink Partners analyst David Risinger said in a report. However, there were no incidences of cardiovascular-related side effects, a concern about the new drug class Vertex is testing.
Risinger has an outperform rating on VRTX stock.
Vertex shares soared to a record high on Wednesday, helping push the entire industry group of biotech stocks more than 2% higher.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
