Key Points
Vertex saw its shares drop after its third-quarter earnings report in November.
The biotech is looking to expand its portfolio into pain management and renal therapies.
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Vertex Pharmaceuticals (NASDAQ: VRTX) has underperformed the market over the past year, rising less than 2%. The biotech, known for its cystic fibrosis (CF) treatments, is scheduled to report earnings on Feb. 12. While there's never just one good time to buy a stock, here's a look at whether investors should buy the pharmaceutical stock before that date.
What happened the last time Vertex reported earnings?
The company reported third-quarter earnings on Nov. 3. Revenue was up 11% year over year to $3.08 billion. However, earnings per share (EPS) rose only 4.7% to $4.20 as increased research and development expenses offset some of the revenue growth.
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Investors did not react well to the report. The stock dropped more than 1% on the day earnings were announced and continued to fall by more than 3% over the next few days, mainly because sales of some of its newer therapies were underwhelming.
Vertex has five CF therapies: Alyftrek, Trikafta, Symdeko, Orkambi, and Kalydeco. Its biggest seller among that group and overall is Trikafta, which, through the first nine months of 2025, had brought in more than $7.7 billion in revenue and has patent protection through 2037. All of Vertex's CF therapies work by modulating the function of the CFTR protein, which helps regulate the flow of water and chloride across cells in various organs.
Investors are closely watching the progress of Alyftrek, which was approved by the Food and Drug Administration in December 2024 and is considered the best CFTR modulator among its therapies. Alyftrek is a combination of vanzacaftor, tezacaftor, and deutivacaftor and is taken as a pill only once a day, unlike Trikafta, which is a twice-a-day dose. Alyftrek also appears to be more effective than Trikafta against more mutations that cause CF. The hope for Vertex is that Alyftrek will replace Trikafta as its lead CF therapy and extend the company's dominance in CF therapies. However, in the third quarter, Alyftrek sales were $247 million, below analysts' expectations.
The so-so ongoing launch of non-opioid pain therapy Journavx, with $33 million in sales in the quarter, also disappointed some analysts. The company also has two therapies designed to treat rare kidney disease, inaxaplin and povetacicept, in late-stage trials.
What's the expectation for this quarter?
The company is predicting full-year 2025 revenue of between $11.9 billion and $12 billion. To get there, it needs fourth-quarter revenue of $3.1 billion to $3.2 billion. Analysts are predicting the company will deliver quarterly revenue of $3.17 billion, an 8.9% year-over-year increase, and EPS of $5.07 per share, a 27.4% rise over the same period last year.
Also important to investors will be whether Alyftrek and Journavx sales show a stronger uptick.
It might be smart to buy the stock before Feb. 12
Vertex is trading at a relatively high valuation, even for a growing biotech, around 33 times earnings. That means the bar for the company's earnings report remains high as much of its future growth is baked into the current price of the stock. Its forward price-to-earnings ratio is around 23.
However, if Vertex's earnings and revenue growth are as much as expected, the stock will likely see a strong uptick. In the long run, the company's ability to expand its CF franchise and use its CF revenue to develop therapies in other areas bodes well for Vertex investors.
Should you buy stock in Vertex Pharmaceuticals right now?
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James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
