Vertex Earnings: Strong Demand for Trikafta/Kaftrio Drives Sales; Pipeline Makes Progress

Narrow-moat Vertex's second-quarter results were in line with our expectations. Product revenue of $2.65 billion represented a 6% increase compared with the prior-year period, and Vertex continues to make progress with its diverse pipeline candidates. Strong demand for its triple-combination cystic fibrosis therapy, Trikafta/Kaftrio, delivered $2.45 billion in revenue. Management slightly raised its 2024 revenue guidance by about 1% at the midpoint. We forecast over $10.83 billion in total revenue in 2024, representing growth of 9.8%. We maintain our fair value estimate of $356 per share, and we continue to have a positive outlook for the firm, as we forecast a five-year compound annual growth rate of 13%.