February 2, 2025
Vertex Pharmaceuticals (NASDAQ: VRTX) just snagged its second U.S. Food and Drug Administration (FDA) approval in only 41 days. On Dec. 20, 2024, the FDA gave a thumbs-up to Alyftrek in treating cystic fibrosis (CF). Last Thursday, the agency approved Vertex's Journavx in treating adults with moderate-to-severe acute pain.
Unsurprisingly, investors reacted positively to the latest regulatory victory, with Vertex's shares jumping on Friday. Is this biotech stock a no-brainer buy now after its huge FDA approval?
Vertex CEO Reshma Kewalramani described the FDA approval of Journavx as "a historic milestone for the 80 million people in America who are prescribed a medicine for moderate-to-severe acute pain each year." Is that just hype from a corporate executive? I don't think so.
Journavx is the first new class of pain medication approved in over two decades. It's a pain signal inhibitor highly selective for a sodium channel called NaV1.8, a similar mechanism of action of local pain reliever lidocaine. In late-stage clinical trials, the drug reduced mean Numeric Pain Rating Scale (NPRS) scores by roughly 50%.
Vertex's drug is poised to meet a major unmet medical need. Anti-inflammatory drugs and analgesics such as ibuprofen often aren't strong enough to fully relieve acute pain. Opioids can be highly addictive. Journavx isn't an opioid and has no observed addictive potential.
As Kewelramani mentioned, the market for acute pain drugs is large, at around 80 million patients. Vertex plans to charge a wholesale price of $15.50 per 50-mg pill for Journavx, and the U.S. FDA approval in the acute pain indication could also bode well for winning future approval for the drug in treating peripheral neuropathic pain. This new therapy could easily become another blockbuster drug for Vertex.
One day after the FDA approved Journavx, Vertex received additional good news. The company announced it had signed a reimbursement agreement with NHS England for Casgevy in treating sickle cell disease. Vertex and NHS England previously reached a deal to make the gene-editing therapy available to patients with transfusion-dependent beta thalassemia in August 2024.
The big biotech company is evaluating povetacicept in a global late-stage study for treating IgA nephropathy, a chronic kidney disease. It hopes to be in a position to file for accelerated approval in the U.S. for the drug once an interim analysis cohort reaches 36 weeks of treatment. Enrollment for this cohort should wrap up this year.
Another pipeline candidate could also be a possibility for accelerated approval. Vertex is evaluating inaxaplin in a phase 3 study for treating APOL1-mediated kidney disease (AMKD). It expects to complete enrollment for the interim analysis cohort this year, with a decision on a potential accelerated approval filing after the cohort reaches 48 weeks of treatment.
As they say on the infomercials, "But wait! There's more!" Vertex also is busy working on a potential cure for type 1 diabetes. It's testing zimislecel in a phase 3 study for treating T1D patients with severe hypoglycemic events. A second T1D program, VX-264, is in a phase 1/2 study.
In the meantime, Vertex enjoys a monopoly in treating the underlying cause of CF. Newly approved Alyftrek will likely become the company's most commercially successful CF therapy yet.
Vertex appears to be on a solid path to more than double its revenue with its current products and pipeline candidates. The company has also proven that it can invest wisely in research and development and smart business development deals. So is this biotech stock a no-brainer buy? I think so.
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