Vertex Pharmaceuticals Incorporated VRTX reported fourth-quarter 2021 adjusted earnings per share of $3.37, which beat the Zacks Consensus Estimate of $3.28. Earnings rose 34% year over year. Strong cystic fibrosis (“CF”) product revenues led to higher earnings for the reported quarter.
Revenues of $2.07 billion, which surpassed the Zacks Consensus Estimate of $1.99 billion, comprised fully of CF product revenues. Total product revenues rose 27% year over year, primarily driven by higher sales of Trikafta (marketed as Kaftrio in Europe).
In the trailing 12 months, shares of Vertex have lost 1.5% in comparison with the industry’s 39% decline.
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Quarter in Detail
The company markets four CF products — Trikafta/Kaftrio, Symdeko (marketed as Symkevi in Europe), Orkambi and Kalydeco. VRTX currently derives total revenues from CF product sales.
CF product sales rose 16% year over year in the United States to $1.39 billion while sales outside the country surged 61% to $679 million, primarily driven by the company’s triple combination therapy, Trikafta.
Trikafta generated sales worth $1.69 billion, up 55.2% year over year driven by a high level of treatment penetration in the United States including rapid uptake in pediatric patients (6-11 years of age) and strong launches in Europe.
Vertex has now secured reimbursement agreements for Kaftrio in more than 20 countries, including new markets of Spain and the Netherlands.
Symdeko/Symkevi registered sales of $80 million for the quarter, down 37.5% year over year.
Kalydeco recorded sales of $152 million for the quarter, reflecting a 21.2% decrease year over year. Orkambi generated sales of $147 million for the reported quarter, down 31.6% from the prior-year quarter. Sales of Kalydeco, Symdeko/ Symkevi and Orkambi were hurt by patients switching to Trikafta.
Full-Year Results
For 2021, Vertex generated revenues of $7.6 billion, reflecting 22% growth year over year.
For the same period, the company reported earnings of $13.02 per share, up 26% year over year.
Costs Rise
Adjusted operating income rose 27% year over year to $1.12 billion for the quarter, driven by higher revenues and cost control.
Adjusted research and development (R&D) expenses rose 35.4% from the year-ago quarter to $493 million due to expansion of the CF and non-CF pipeline.
Adjusted selling, general and administrative (SG&A) expenses increased 20% to $210 million for the reported quarter due to investments made to support the CF business expansion.
2022 Guidance
The company expects total revenues from CF products in the range of $8.4-$8.6 billion for 2022.
Combined adjusted R&D and SG&A expense guidance for 2022 is expected in the band of $2.70-$2.75 billion. Adjusted tax rate is expected in the range of 21-22%.
Pipeline & Other Updates
While Vertex focuses on the development and strengthening of the CF franchise, the company has rapidly advancing pipeline candidates in additional diseases beyond CF across six disease areas in mid-stage and late-stage studies. VRTX expects to report data from many of these studies in 2022.
The company’s most advanced program is CTX001, a CRISPR/Cas9-based gene editing therapy for two devastating diseases — sickle cell disease and transfusion-dependent beta thalassemia. It has achieved target enrollment in pivotal studies and expects regulatory submission for the therapy in both indications in late 2022.
VX-548, a selective NaV1.8 inhibitor, is being evaluated in two phase II acute pain studies, one following bunionectomy surgery and the other following abdominoplasty surgery. Vertex expects data from the acute pain studies in first-quarter 2022.
Following positive data from the phase II study evaluating VX-147 in APOL1-mediated focal segmental glomerulosclerosis (FSGS), Vertex plans to complete its phase II meeting with health regulators and expects to start pivotal studies for VX-147 in APOL1-mediated kidney disease, including FSGS, in first-quarter 2022.
Vertex is also evaluating VX-880 in a phase I/II study for the treatment of type I diabetes (T1D) with impaired hypoglycemic awareness and severe hypoglycemia. In fact, VX-880 is one of the first investigational programs in T1D indication. The company anticipates the submission of an investigational new drug application later this year for the second program, which will involve the implantation of islet cells inside an immunoprotective device.
Vertex currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the biotech sector include Alkermes ALKS, Cara Therapeutics CARA and Vir Biotechnology VIR, each carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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