Vertex Pharmaceuticals, a Revolution in Acute Pain?

Focus on an interesting biotech company

While investments in biotech companies are often synonymous with risk, loss and dilution, Vertex appears to be an interesting one. Indeed, while it promises attractive potential treatments (potential and therefore uncertain), it is already generating impressive financial results, enabling it to largely finance its R&D efforts.

While already known for its cystic fibrosis treatments, Vertex is currently testing new drugs for acute pain. The potential is huge as it is supposed to have the same effects as morphine but without dependence!

Let’s discover a strong biotech with great financial metrics and its potential new treatments to help them secure their revenue and continue their growth.

Company Overview

Vertex invests in scientific innovation to create transformative medicines for people with serious diseases. It is focused on discovering, developing and bringing innovative medicines. It has a robust research pipeline that includes potentially transformative treatments for cystic fibrosis, pain, sickle cell disease, beta thalassemia, alpha-1 antitrypsin deficiency, APOL1-mediated kidney disease, Duchenne muscular dystrophy and even type 1 diabetes.

Vertex already discovered and developed 6 medicines in its labs. Its current income comes from these medicines.

With 74% of their business operating expenses dedicating to R&D, we clearly see the purpose of the company: finding, developping and testing new medicines. This creates also a clear

Portfolio and pipeline

Let’s look at their portfolio.

Cystic fibrosis

This is the core part of the current business. With 4 already developed medicines, 1 in phase 3, 1 in phase 1 and 2 still in early research steps.

Cystic fibrosis (CF) is a rare, chronic and life-shortening genetic disease. It is a progressive, multi-system disease that affects the lungs, liver, gastrointestinal tract, pancreas, sinuses, sweat glands and reproductive tract.

Pain

The management of pain is complex. Opioids are generally prescribed for acute pain but may not be suitable for chronic use. Anti-inflammatory drugs can be used for both acute and chronic pain, but their use can be limited due to side effects. Beyond these approaches there are limited options and there haven’t been any major innovations in pain treatment for decades.

Vertex is investigating an approach to treat pain by targeting specific sodium channels in the NaV family that have been validated by human biology. Its aim is to interrupt pain signals and prevent them from traveling from the sensory nerves to the brain.

The current most advanced medicine is in phase 3, the reason for the recent stock movements. Others are still in research phase.

Sickle cell disease

Sickle cell disease (SCD) is an inherited blood disorder that affects the red blood cells, which are essential for carrying oxygen to all organs and tissues of the body. SCD causes severe pain, organ damage and shortened life span due to misshapen or “sickled” blood cells.

Beta thalassemia

Beta thalassemia is an inherited blood disorder that affects the red blood cells, which are essential for carrying oxygen to all organs and tissues of the body. A lack of red blood cells, also known as anemia, is the primary manifestation of beta thalassemia.

Others

Other medicines are also researched and are between the research phase and phase 3, though most of them are still in early phases.

The different categories are: Alpha-1 antitrypsin deficiency, APOL1-mediated kidney disease, Duchenne muscular dystrophy, Myotonic dystrophy type 1, type 1 diabetes and outlicensed medicines.

Patent cliff, the constant race for innovation

The patent cliff, classic end of patents for pharmaceutical companies resulting in revenue loss, will not happen before the end of the decade. However, new medicines have to be developed before that.

This is the main risk in pharmaceuticals and for Vertex too. The dynamic pipeline is a good point as well as the track record in finding and developing new drugs.

The pain pipeline has the potential to help go beyond the patent cliff… but only until the pain patent cliff. This is the biotech endless race and the reason of these high margins.

Stock metrics

Growth metrics