Vertex: Phase 2 Data Meets Endpoint, but Comparison With Placebo Worries Investors; Shares Tank 11%

Narrow-moat Vertex released results from its phase 2 trial of suzetrigine, for the treatment of painful lumbosacral radiculopathy, and it met the primary endpoint with a statistically significant and clinically meaningful 2.02 point within-group reduction from baseline in the Numeric Pain Rating Scale. However, the placebo arm of the study also showed a similar within-group reduction in NPRS of 1.98. The comparison between the two cohorts spooked investors and shared tanked over 11%. We maintain our fair value estimate of $356 per share, and shares have moved into 3-star territory, trading about 11% above our fair value estimate.