🌟 Editor's Note
Welcome to something new in the world of investment newsletters; one tailored especially for the medical professional. He who wisely wants to invest in the field in which he already has the edge of expertise; Biotech/Pharma! As a doctor or allied professional, who knows better than you which new developments will have the greatest impact on your patients? The Dilemma is that you have the experience to choose wisely, but lack the time to sort through all the hundreds of possible choices. Or perhaps you are unsure what strategy to employ once you’ve found a stock you favor.
Let this newsletter solve that dilemma for you. We will do the searching and analysis you don’t have the time for. We’ll even spell out a profitable action to take. See for yourself…
Pick of the Month
Vertex ( NASDAQ: VRTX)
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VERTEX is a biotechnology company engaged in developing and commercializing therapies for treating cystic fibrosis (CF).
Vertex was founded in 1989 and has its global headquarters in Boston, with international headquarters in London. Additionally, the company has research and development sites and commercial offices in North America, Europe, Australia, Latin America and the Middle East. Vertex is consistently recognized as one of the industry's top places to work, including 16 consecutive years on Science magazine's Top Employers list and one of Fortune’s 100 Best Companies to Work For.
Vertex has a robust clinical pipeline of investigational therapies across a range of modalities in other serious diseases including neuropathic pain, APOL1-mediated kidney disease, IgA nephropathy, primary membranous nephropathy, autosomal dominant polycystic kidney disease, type 1 diabetes and myotonic dystrophy type 1.
Vertex's leadership is in gene editing, which positions the company to capture an outsized share of the expanding gene and cell therapy market as healthcare systems worldwide increasingly prioritize transformative, curative treatments-translating to long-duration, high-margin revenue streams.
Some of the most optimistic analysts were already assuming revenue could reach about US$16.9 billion and earnings US$7.8 billion by 2028, reflecting a belief that Vertex’s leadership in gene editing would secure a large share of future genetic medicine growth, even as others focused more on CF concentration risk and pricing pressure. The new CASGEVY data could push either camp to revisit those expectations, depending on how you think the pediatric results reshape the longer term opportunity.
CASGEVY is a one-time therapy used to treat people ages 12 years and older with:
sickle cell disease (SCD) who have frequent vaso-occlusive crises or VOCs
beta thalassemia (β-thalassemia) who need regular blood transfusions
CASGEVY is made specifically for each patient, using the patient’s own edited blood stem cells, and increases the production of a special type of hemoglobin called hemoglobin F (fetal hemoglobin or HbF). Having more HbF increases overall hemoglobin levels and has been shown to improve the production and function of red blood cells. This can eliminate VOCs in people with sickle cell disease and eliminate the need for regular blood transfusions in people with beta thalassemia. CASGEVY is a non-viral, ex vivo CRISPR/Cas9 gene-edited cell therapy for eligible patients with SCD or TDT, in which a patient’s own hematopoietic stem and progenitor cells are edited at the erythroid specific enhancer region of the BCL11A gene through a precise double-strand break. This edit results in the production of high levels of fetal hemoglobin (HbF; hemoglobin F) in red blood cells. CASGEVY has been shown to reduce or eliminate VOCs for patients with SCD and transfusion requirements for patients with TDT.
Vertex's balance sheet strength and robust cash flow provide significant flexibility to accelerate R&D investment in next-generation precision medicines and strategic acquisitions, driving pipeline expansion, reducing innovation risk, and ensuring ongoing margin leverage to enhance long-term shareholder value. The bullish analysts expect earnings to reach $7.8 billion (and earnings per share of $29.88) by about September 2028, up from $3.6 billion today. The analysts are largely in agreement about this estimate.
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Get to know the Players
/David Altshuler,
M.D., Ph.D.
Executive Vice President
and Chief Scientific Officer
David received his bachelor’s degree in life sciences from MIT and his M.D. and Ph.D. in genetics from Harvard Medical School. He completed his clinical training at MGH in internal medicine and in endocrinology, diabetes and metabolism.
David is Executive Vice President and Chief Scientific Officer, leading internal research and external innovation, corporate data strategy, technology and data sciences, and serves as executive sponsor for Vertex University.
David joined as Chief Scientific Officer in 2015. Since that time Vertex discovered, developed and launched TRIKAFTA®/KAFTRIO®, the first triple therapy for people with cystic fibrosis; CASGEVY®, the first approved medicine using CRISPR/Cas9 gene editing for the treatment of sickle cell disease and transfusion-dependent beta thalassemia; and JOURNAVX®, the first and only approved non-opioid oral pain signal inhibitor and the first new class of pain medicine approved in more than 20 years. He developed and implemented the research strategy and pipeline of Sandbox diseases, and advanced to clinical trials candidate medicines for cystic fibrosis, sickle cell disease, beta thalassemia, pain, APOL1-mediated kidney disease, type 1 diabetes, alpha-1 antitrypsin deficiency and myotonic dystrophy type 1. Before joining as Chief Scientific Officer, he was a member of the board of directors from 2012 to 2014.
Prior to Vertex, David was a Founding Core Member, Deputy Director and Chief Academic Officer at the Broad Institute of Harvard and the Massachusetts Institute of Technology (MIT). He was Professor of Genetics and Medicine at Harvard Medical School, Adjunct Professor of Biology at MIT, Director of the medical and population genetics program at the Whitehead Institute/MIT Center for Genome Research (2012-2014), and a physician at the Massachusetts General Hospital (MGH). He helped lead three major projects that characterized and cataloged human genetic variation — the SNP Consortium, HapMap and 1,000 Genome Projects — and pioneered methods and practice of genetic analysis of common human diseases. His lab led the discovery of hundreds of genetic variants associated with risk of type 2 diabetes, cardiovascular disease, autoimmune diseases and cancer across multiple populations. His lab also developed population genetic models to evaluate the genetic architecture of human complex disease, and to train those models based on empirical data. He continues to teach students as a senior lecturer in genetics and medicine at MGH and Harvard.
Pull the Trigger
This is the part of the Newsletter in which I spell out in detail an action or particular strategy to apply to this issue’s Pick of the Month.
My favorite strategy involves utilizing options rather than buying a stock outright, since you can control more shares for far less cost. VRTX is currently trading at $453.5. Therefore 100 shares would cost you $45,350. But an option contract for a 450 strike price call option, controlling 100 shares, with an expiration three months out enabling ling you to have control for the entire fiscal Quarter, would only cost you $3,190.
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Till next month,