Vertex Pharmaceuticals experienced a significant drop in stock value on Monday following its announcement that it would not move forward with further testing of its next-generation pain medication, VX-993. This decision stemmed from an unsatisfactory midstage study where the drug did not meet efficacy targets for patients recovering from bunion surgery, leading Vertex to halt further trials for VX-993 as a standalone treatment for acute pain.
Had it succeeded, VX-993 would have complemented Vertex’s existing pain management product, Journavx, which is designed for adults suffering from moderate to severe acute pain. However, after engaging with the FDA, Vertex determined that broadening Journavx’s applications to encompass neuropathic pain may not be feasible. Consequently, the company’s strategic pivot now focuses on testing for diabetic neuropathy specifically.
This setback raises concerns about Vertex’s ability to build a dominant pain management portfolio akin to its successful cystic fibrosis therapies. RBC Capital Markets analyst Brian Abrahams noted that this could diminish the anticipated advantages surrounding the pain franchise, highlighting the complexities involved in evolving and enhancing these products.
In after-hours trading, the stock plummeted over 14%, landing at approximately $403.50.
On a more positive note, Vertex reported robust second-quarter results, generating $2.96 billion in sales—a 12% increase—surpassing expectations of $2.91 billion, as reported by FactSet. The company’s adjusted profit reached $4.52 per share, marking a dramatic turnaround from the previous year’s losses and exceeding analyst forecasts of a $4.27 gain. Growth was attributed to the strong performance of Journavx, along with its new cystic fibrosis therapies, Alyftrek and Casgevy, designed for blood disorders.
For the fiscal year, Vertex maintained a sales projection of $11.85 billion to $12 billion, while analysts predicted earnings per share of $17.91 and sales of $11.93 billion.
In a leadership update, Vertex announced that Chief Scientific Officer David Altshuler will retire next August. Mark Bunnage, currently the senior vice president of global research, is set to assume the role on February 1.
As the biotechnology landscape continues to evolve, Vertex will need to navigate these challenges strategically to maintain its position as a leader in both pain management and cystic fibrosis treatments.
