Sometimes a potential drug or treatment may seem like a failure, but can still be salvaged for researchers' use. That is the case with Vertex Pharmaceuticals Inc.'s (VRTX) VX-864 for Alpha-1 Antitrypsin Deficiency (AATD). In its June 10 update to investors, the company announced that it will not be moving the drug to late-stage development. (See VRTX stock analysis on TipRanks)
Five-star analyst Hartaj Singh of Oppenheimer & Co. covered the stock in his report, optimistically stating that the failure of VX-864 “speaks to the often non-linearity of preclinical and clinical development,” that is, if Vertex can derive uses from the results. Singh maintained a Buy rating and declared a price target of $305. This would indicate a potential upside of $61.40 from the stock’s Tuesday closing price.
Following the after-market hours announcement, Vertex’s share price fell more than a combined 12% in the three trading days thereafter. The stock is down over 30% over the last year, due in large part to a safety concern over a drug called VX-814. Despite this, Singh wrote that the company has more promising upcoming projects and is worthy of a Buy rating.
Signh is confident that Vertex can achieve its AATD objectives. The VX-814 safety issues were mitigated, and he believes the company can turn around its unfavorable results from VX-864. He says that VRTX has over 10 years of experience researching AATD, and this fact encourages him.
Furthermore, Vertex has seen consistent sales and earnings growth from its Cystic Fibrosis treatment, Kalydeco, and Signh expects the stock to continue to rate positively with analysts, and for investors to seize the moment as a buying opportunity.
On TipRanks, VRTX has an analyst rating consensus of Strong Buy, based on 19 Buy and 5 Hold ratings. The average analyst VRTX price target is $261.68, reflecting a potential 12-month upside of 38.48%.
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