J.P. Morgan Reiterates Neutral on Vertex Pharmaceuticals (VRTX)

J.P. Morgan is out with its report today on Vertex Pharmaceuticals VRTX, reiterating Neutral. In a note to clients, J.P. Morgan writes, "VRTX shares are up 20% since FDA briefing documents were released for telaprevir in late April; this was driven by expectations that approval of competitor boceprevir (Merck's Victrelis) would be substantially delayed or have a very restrictive label. This issue was put to rest on Friday with FDA approval of boceprevir in Hep C, with what some may argue was a best case label (no black box, no exclusion of null responders, RGT allowed, no onerous language from anemia). On the pricing side, WAC pricing for boceprevir ranges from $26- 48K ($1,100/wk) depending on duration, with $35K likely being the most common. We assume telaprevir pricing in the $30K range given a shorter treatment duration, but there are many that expect $50K+. Interestingly, $30K for telaprevir is a ~125% premium to boceprevir on a monthly basis ($2,500/wk) which makes for tougher comparisons to payers, though there is more shortened duration of PEG-IFN/RBV with telaprevir. Telaprevir pricing and CF combo data (770 +809) are the higher impact near term events for Vertex and in our view, a near best case scenario is already assumed which keeps us at a Neutral rating." Shares of VRTX closed Friday at $57.48, down 0.91% from Thursday's close.