Vertex Pharmaceuticals is the IBD Stock of the Day as the global biotech company climbs above its 50-day moving average. VRTX stock is offering aggressive investors an early entry point.
While dominance in the market for cystic fibrosis treatment has been the driver of the company's share gains, Vertex has teamed with Crispr Therapeutics to target genetic diseases.
As a result, Vertex stock has advanced 34% in 2022, bucking the bear market that hit most technology stocks. On the stock market today, VRTX stock gained 0.5% to 293.48.
From one technical view, shares are extended from a 276.10 buy point. However, Vertex retook its 50-day line last week and could be forming a new base. That may take a couple more weeks.
VRTX Stock: Early Entry Point
Aggressive investors could take a position with an entry point of 292.10, just above the Sept. 2 high.
VRTX stock holds an IBD Relative Strength Rating of 96 out of a best-possible 99, according to IBD Stock Checkup. That means shares have outperformed 96% of stocks over the past 12 months. The best growth stocks typically have RS Ratings of at least 80.
Shares also have an IBD Composite Rating of 99. IBD's Composite Rating combines five separate proprietary scores into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
In addition, Vertex stock owns an Accumulation/Distribution Rating of B-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Vertex Stock: Trikafta Drives Sales
In early August, Vertex reported second-quarter earnings of $3.60 a share vs. expectations for $3.47, minus some items. In the year earlier period, Vertex earned only 17 cents a share. A $900 million payment to Crispr Therapeutics in 2021 lowered profit.
Second-quarter sales jumped 22% to $2.2 billion, topping estimates of $2.13 billion.
Trikafta, Vertex's biggest moneymaker, generated $1.89 billion in sales, rocketing 51% on a year-over-year basis. Trikafta is a combination of three drugs that can treat 90% of patients with the lung disease.
Founded in 1989, the Boston-based company boosted its full-year sales outlook by $200 million. It now expects $8.6 billion to $8.8 billion in sales of its cystic fibrosis, or CF, medicines.
Analysts are closely watching a mid-stage kidney disease program. Vertex is trying to treat kidney diseases tied to mutations in the APOL1 gene — a pool of about 100,000 people in the U.S. and Europe. The condition is known as focal segmental glomerulosclerosis, or FSGS.
In a recent note to clients, RBC Capital Markets analyst Brian Abrahams said, "We believe Vertex has an underappreciated pipeline portfolio that has a fair chance of driving medium- to long-term growth. This includes multiple programs with potential updates even this year such as in genetic kidney diseases and hemoglobinopathies."
Crispr Partnership
Meanwhile, Crispr Therapeutics and Vertex have been working on a gene-editing drug for two blood diseases — beta thalassemia and sickle cell disease.
According to a report, Crispr Therapeutics and Vertex expect to submit late stage trial data, seeking approval for treatment of the inherited blood diseases, to European Union and United Kingdom regulators by the end of 2022.
It's been a decade since Jennifer Doudna and Emmanuelle Charpentier developed the technology known as CRISPR. Using a pair of molecular "scissors," they found they could cut into the human genome and change the DNA at the center of some diseases.
There's a massive array of potential uses for CRISPR, which stands for Clustered Regularly Interspaced Short Palindromic Repeats, offering a potential boon for VRTX stock.
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