Vertex Pharmaceuticals Incorporated (VRTX)’s Stock Looks Upside Cystic Fibrosis Drug Breakthrough

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has struck a vital breakthrough with its drug for Cystic Fibrosis, as we have recently reported.Now it’s time to find out what’s in store for the company in the future.

Meg Tirrell, CNBC’s Business news started talking about the Cystic Fibrosis Drugs and how they work. Tirrell started by saying that Cystic Fibrosis drugs have met and even exceeded the expectations. She also said that Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has reported positive trend. This drug is a combo of medicines that improves lung function in patients with Cystic Fibrosis.

Cystic Fibrosis is caused by mutations in a gene known as CFTR. When the gene is defective, the protein it creates can’t help chloride escape the cell and that hampers the movement of fluid across the cell wall and leads to production of thick mucus across the airways and other areas. The first medicine to address this is Kaledyco, which restores the protein’s ability to allow chloride to pass through the cell membrane. Only 200 CF patients can get benefited from this drug. Many more have a bigger problem. The protein can’t get to the membrane at all, so Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is testing a new drug, Lumacaftor. Lumacaftor aims to get the protein to the cell wall, whereas Kaledyco opens the passage for chloride. A combination of both drugs could help around 28000 people, which is 14 times as many as Kaledyco alone could do.

The analysis says that Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) drugs could bring in $5 million in peak sales and the data also gave a sentimental boost across the biotech sector.

Matt Radon, Executive director and senior analyst at UBS, was on CNBC on Tuesday and he was asked if there is more upside to Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) on this. He stated that the stock of the company could climb as high as $125 per share.

He continued saying that this scenario can be achieved by Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) through two factors; number one is increasing the price, since the activity of the drug is higher than what The Street was thinking. The Second one is the penetration among the CF diagnosed people. Roden also feels that there are still more levers to the upside organically. Roden added that while thinking from a strategic perspectice, this drug is a very long duration asset with very high margins.

When Roden was asked about what other names are potentially poised to get this sort of breakout, dependent on the success of what’s in their pipeline in clinical trials. He replied:

“There are other binary risk stocks out there, Puma biotechnology is one of them, PBYI is the ticker. This is one, where we’ve talked about the potentially favorable risk/reward based on the upside potential versus where it is trading. That’s a binary stock, with several upcoming events, you know, in the large-cap space, you still have Gilead and Celgene out there that still have gap up potential on pipeline development. In the case of Celgene, you still have resolution from the patent case to go on here. So there is still several names with upside remaining in the sector.”

Disclosure: None