Regulators are reviewing what could become a multi-billion-dollar drug.
Biotech companies have brought many important treatments to market, from ones that address rare diseases to ones that handle common health problems. Vertex Pharmaceuticals (VRTX -2.34%) has stood out over the past several years as a top biotech player, thanks to its work in the area of cystic fibrosis (CF). The company’s portfolio of treatments is changing the lives of patients and bringing in blockbuster revenue — in the most recent quarter, product revenue climbed in the double digits to nearly $2.8 billion.
In recent years, investors appreciated Vertex’s dominance in the CF market, but some worried about the company’s focus on only one treatment area. These days, though, Vertex is on the path to eliminating those worries. Earlier this year, it launched a treatment for blood disorders, and today it’s about to address one of the world’s most common health problems — a market where need is particularly high. My prediction is that Vertex is heading for a once-in-a-generation opportunity, and investors who get in on the stock today should benefit for years to come. Let’s find out more.
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A “multibillion-dollar franchise” for Vertex
I call this a once-in-a-generation opportunity because it isn’t every day that a company launches a drug that may tackle a problem plaguing so many. Serving this market should, as Vertex says, result in a “multibillion-dollar franchise” for the company.
Vertex has reached a key moment because the U.S. Food and Drug Administration (FDA) is reviewing its candidate, suzetrigine, for the treatment of acute pain. The FDA has pledged to issue a decision by the target date of Jan. 30.
In the U.S. alone, more than 80 million people annually ask their doctors for prescriptions to treat moderate to severe acute pain, and the problem is that options are limited. Over-the-counter pills aren’t always effective, and opioid prescription drugs come with the risk of addiction. Vertex has developed a non-opioid candidate, therefore eliminating addiction risk. At the same time, the drug has demonstrated strong efficacy in clinical trials. Suzetrigine works by stopping the sodium channel known as NaV1.8 from transmitting pain signals.
Vertex has already prepared for a potential FDA nod, with teams hired, trained, and ready for launch. The company’s two initial goals are to ensure retail distribution across the U.S. and create a financial assistance program to immediately support patient access. Suzetrigine is an oral treatment and doesn’t require patients to take any particular tests before giving it a try. These elements should favor a rapid launch.
Legislation is another element that may help suzetrigine. The NOPAIN Act, which goes into effect at the start of the year, offers an add-on payment for the prescription of non-opioids in hospital outpatient and ambulatory surgery settings.
More to come…
All this sounds great, but this may be just the beginning for suzetrigine and Vertex’s pain portfolio. The company has launched a phase 3 program for suzetrigine in diabetic peripheral neuropathic pain. This indication represents a potential patient group of 2 million in the U.S. The company has also completed a phase 2 trial for suzetrigine in a type of back pain called lumbosacral radiculopathy. About 4 million Americans seek prescriptions for this type of peripheral neuropathic pain every year. Meanwhile, Vertex continues to study other pain candidates and says its goal is “to fundamentally change the way pain is treated.”
The sheer size of the pain market — and I’ve just spoken about the U.S. here — is so vast that addressing it with a safe and effective product could be a game changer for patients, and for Vertex and its investors. It’s important to remember that Vertex is already a successful biotech player, bringing in blockbuster revenue thanks to its CF program. And the company has more than $11 billion in cash, meaning it has what it takes to shepherd pain and other candidates through the pipeline or even acquire new programs when the opportunity arises.
So, Vertex’s complete picture looks bright. On top of this, my prediction that Vertex is heading for a once-in-a-generation opportunity right now could make that picture even brighter. The pain portfolio could drive a new era of growth in earnings and stock performance, making now a great time to buy Vertex shares and hold on for the long term.
Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
