Vertex Pharmaceuticals (VRTX) engages in the discovery, development, and commercialization of small molecule drugs for the treatment of serious diseases worldwide. Its product pipeline includes Telaprevir (VX-950), a Phase III clinical trial product for the treatment of hepatitis C virus (HCV) infection; VX-222, a Phase IIa clinical trial product targeting HCV infection; VX-770, a Phase III clinical trial candidate for the treatment of cystic fibrosis; and VX-809, a Phase IIa clinical trial product targeting cystic fibrosis.
The company's products also comprise VX-509, a Phase IIa clinical trial product for the treatment of rheumatoid arthritis; VX-765, a Phase IIa clinical trial product targeting epilepsy; and VX-759, a Phase I clinical trial product for the treatment of HCV infection. It has collaboration agreements with Janssen Pharmaceuticals, Mitsubishi Tanabe Pharma Corporation, Cystic Fibrosis Foundation Therapeutics Incorporated, Merck & Co (MRK) and GlaxoSmithKline (GSK). The company was founded in 1989 and is headquartered in Cambridge, Massachusetts.
Telaprevir (VX-950), treatment of hepatitis C virus (HCV) infection.
VX-222, targeting HCV infection.
VX-770, treatment of cystic fibrosis.
VX-809, targeting cystic fibrosis.
VX-509, treatment of rheumatoid arthritis.
VX-765, targeting epilepsy.
VX-759, treatment of HCV infection.
VRTX has a real nice pipeline going for it. Some believe Vertex is an acquisition target for mega pharmas like Bristol-Meyers (BMY) and Pfizer (PFE), companies that seem to be seeking out smaller bio-pharmas with deep and impressive pipelines. However, with a market cap of 7.45 billion, it is hard to imagine a mega pharma would be willing to pay such a hefty price tag for Vertex.
|Fiscal Year |
|Fiscal Year Ends: ||Dec 31 |
|Most Recent Quarter (mrq): ||Sep 30, 2011 |
|Profit Margin: ||-33.90% |
|Operating Margin : ||-18.85% |
|Management Effectiveness |
|Return on Assets : ||-5.40% |
|Return on Equity : ||-47.41% |
|Income Statement |
|Revenue : ||912.81M |
|Revenue Per Share : ||4.49 |
|Qtrly Revenue Growth (yoy): ||2,670.30% |
|Gross Profit : ||130.64M |
|EBITDA 6: ||-138.57M |
|Net Income Avl to Common : ||-309.45M |
|Diluted EPS : ||-1.52 |
|Qtrly Earnings Growth (yoy): ||N/A |
|Balance Sheet |
|Total Cash (mrq): ||658.68M |
|Total Cash Per Share (mrq): ||3.16 |
|Total Debt (mrq): ||498.42M |
|Total Debt/Equity (mrq): ||68.20 |
|Current Ratio (mrq): ||2.27 |
|Book Value Per Share (mrq): ||2.78 |
|Cash Flow Statement |
|Operating Cash Flow : ||-526.03M |
|Levered Free Cash Flow : ||-378.06M |
The current Vertex balance sheet does not look great in terms of profit generation and cash burn, but with a deep pipeline and plenty of cash on hand for larger phase 3 clinical funding, all Vertex needs is The FDA to approve a couple of their pipelined drugs to generate big revenue and turn huge profits in the future.
In my opinion, Vertex seems to have the technological know-how, so these drugs should see the market eventually. I really like their science and I strongly feel Vertex is engaged in very important work for the betterment of society with these drugs. I encourage potential investors to do the deeper due dilligence on all the phase clinical data, as I think most will like what they find.
I think for the very aggressive investor who is willing to buy and hold Vertex for 3 to 5 years, they could see a price appreciation of up to 5 times the current pps of $35.72 in this time frame. Numerous speculative biopharmas also make for very good swing trades, so consider looking at Vertex for this as well.