Vertex stock rockets to record, boosting market cap by $8 billion
Vertex Pharmaceuticals Inc. shares soared Wednesday, adding over $8 billion to the company’s market value, as the biotech drug maker announced positive results from clinical studies of its cystic fibrosis treatments, and boosted the company’s probability of becoming a buyout target, according to one analyst.
Shares of Boston-based Vertex VRTX, -0.35% rocketed 24% in morning trade, hitting an all-time intraday high of $167.00 in the process. If that rally holds, it would be the largest one-day percentage gain for the company since June 27, 2014, according to FactSet data.
The highest closing price for the stock was $141.48 a share back on Aug. 19, 2015.
With about 249.1 million shares outstanding, the stock price gain of $32.21 was adding $8.02 billion to Vertex’s market capitalization.
Shares jumped after the company said data from clinical studies of triple combinations of drug treatments using candidates VX-152, VX-440 and VX-659 showed an up to 12% average improvement in lung function in certain cystic fibrosis patients given the drugs.
“With four active three-drug combinations, Vertex has many options to choose from in terms of its path forward, but within a year or two we cannot see any reason why 100% of the CF patient population who carry a delF508 allele (roughly 87% of the total prevalent pool of patients) will not be on one of these medicines,” said Geoffrey Porges, an analyst at Leerink, in a note.
Porges has an outperform rating on Vertex and last had a price target of $132 a share. The analyst said that the study results of pipeline drugs also boosts the probability of Vertex becoming a buyout target.
“This disclosure confirms our bullish view, and also reinforces our views of the desirability and uniqueness of Vertex as an acquisition target for larger companies (some of them West Coast based),” said Porges.
Vertex’s stock has now more than doubled year to date, while the iShares Nasdaq Biotechnology exchange-traded fund IBB, +1.02% has run up 20% and the S&P 500 index SPX, +0.04% has gained 10.2%.
Larger West Coast-based biotechs include Thousand Oaks, Calif.-based Amgen Inc. AMGN, +0.08% ; Foster City, Calif.-based Gilead Sciences Inc. GILD, +0.99% ; and Roche Holding Ltd.’s ROG, +0.49% Genentech unit in South San Francisco, Calif.
July 19, 2017