Vertex Led Higher by Hepatitis C Drug

Brittney Barrett  |

Biotech investors had no shortage of options to consider for making a play on a Hepatitis C drug this year. Four different pharmaceutical companies had treatments in the works prompting heated competition to complete them. Investors that chose Vertex Inc (VRTX) over the other possibilities are about to get their payoff.  The company’s new hepatitis C drug, debuting only five short weeks ago saw sales approaching $75 million causing shares to rise around 4 percent.

Sales of Incivek are expected to maintain strength as the drug established itself as the gold standard of Hepatitis C treatment. Some have shorted the stock, citing major quarterly losses or skepticism regarding the potential popularity of the drug. Given the track of Incivek, which Sanford Bernstein analyst, Geoffrey Porges predicts could reach $200 million in the third quarter, the decision to sell appears regrettable.

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Vertex posted a net loss of $174.1 million, or 85 cents per share, compared with a loss of $200 million, or $1 per share in the year ago period. While the results don’t look promising, analysts has thought the cost of launching the drug would be even higher forecasting an expected a loss of 96 cents per share.

Meanwhile, total revenue for the quarter is rising fast, reaching $114.4 million against analyst predictions of $54.3 million.

While Vertex has been seeing the higher revenue from its new hepatitis drug in a big way, the same cannot be said of Merck & Co (MRKN). Merck’s Victrelis is being sharply outpaced by Incivek with prescriptions more than 3-to-1 in favor of Incivek.

According to reports, the preference is the result of Incivek being easier to use than its primary competition.  This information has not phased Merck investors; however, shares were climbing higher in advance of Friday’s earnings.  Wall Street forecasts anticipate the drug maker earning 95 cents a share on revenue of $11.8 billion.

Also expected to release earnings tomorrow is Amgen (AMGN). The company had been seeing support from investors in early trading on Wall Street predictions second-quarter profits to the tune of $1.29 a share on revenue of $3.77 billion. Attitudes seemed to change later in the day; however as Amgen took a minor dip on high volume.



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