Vertex Pharmaceuticals Incorporated VRTX announced that it has entered into a strategic research collaboration deal with privately held, Massachusetts-based Arbor Biotechnologies to discover novel proteins that the former may use in developing gene-editing therapies to treat five serious diseases including cystic fibrosis (CF).
Following this deal, Vertex is looking to leverage Arbor's protein biodiscovery platform based on machine learning, genome sequencing, gene synthesis and high-throughput screening.
Per the agreement, Arbor is eligible to receive an undisclosed upfront cash payment from Vertex along with research funding, potential milestones payments and royalties on net sales. While Arbor will look after the discovery activities, Vertex will provide funding for the same.
Additionally, Vertex will make an investment in Arbor’s convertible notes and subsequently, take an observer seat on the latter’s board.
Shares of Vertex have increased 5.1% in the past year against the industry’s decline of 24.2%.
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Notably, CF is Vertex’s main area of focus. Its three approved CF products are Kalydeco, Orkambi and Symdeko, the company’s consistent revenue drivers. Total CF product revenues were $2.2 billion in the first nine months of 2018, reflecting a 46.7% surge year over year.
Evidently, Vertex’s CF pipeline is quite strong. The company is evaluating two next-generation CFTR correctors (VX-659 and VX-445) in phase III studies as part of a triple combination with tezacaftor and ivacaftor.
Studies on Vertex’s triple combination CF regimens are advancing fast. The CF triple-pill regimes are crucial for long-term growth as these have potential to treat up to 90% of CF patient population.
Zacks Rank & Stocks to Consider
Vertex currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the healthcare sector include Genomic Health, Inc. GHDX, Vanda Pharmaceuticals Inc. VNDA and Inovio Pharmaceuticals, Inc. INO, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Genomic Health’s earnings estimates have been revised 61.8% upward for 2019 over the past 60 days. The stock has soared 75.5% in the past year.
Vanda’s earnings estimates have moved 9.1% north for 2019 over the past 60 days. The stock has surged 70.5% in a year.
Inovio’s loss per share estimates has been narrowed 2.8% for 2019 in the last 60 days.
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