3 Reasons To Like Vertex Pharma Shares

Analysts at BTIG laid out the bullish case for owning shares of Vertex Pharmaceuticals Incorporated VRTX — a "storied" company with a strong growth outlook.

BTIG's Dane Leone initiates coverage of Vertex's stock with a Buy and $200 price target, on the thesis that the company is well-positioned to leverage its success in the cystic fibrosis segment to create therapeutic efforts in other rare disease areas that are unmet but have high clinical need.

The case for owning Vertex's stock can be broken down to three unique points, Leone said. First, the company's leadership position with CFTR modulators for cystic fibrosis is not expected to see any notable competition for at least five years. (See Leone's track record here.)

Second, consensus estimates for Vertex through 2022 appear to be "achievable" even under the assumption that competition from Galapagos/AbbVie enters the market. Third, Vertex boasts multiple "interesting" technology partnerships with various companies, including Crispr Therapeutics AG CRSP, that will result in a "deeper" R&D pipeline throughout 2018.

Finally, Vertex's stock at its current levels appear to be "reasonable" compared to Vertex's peers within the large cap biotech group, at a median of 5.0x EV/2022E revenues multiple. Vertex is operating in a position of power as there exists "significant barriers to entry" within the cystic fibrosis market. The company could generate 24-percent sales growth over the next five years, superior to the relative 9 percent average growth expected in the peer group.

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