Analysts say Vertex’s stock is under pressure after drug development failure

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Shares of Vertex Pharmaceuticals Inc. were down 9.8% in premarket trading on Thursday, the day after the drug maker said it had stopped development of an experimental therapy aimed at treating Alpha-1 antitrypsinase deficiency, which can cause lung and liver disease. Vertex cited the therapy’s safety and pharmacokinetic profile of VX-814 as observed in a Phase 2 clinical trial. SVB Leerink’s Geoffrey Porges told investors on Wednesday he now expected Vertex’s stock to be under pressure, and that “investors are likely to question whether the heralded Vertex research capability is really validated beyond” cystic fibrosis drugs. (All four of Vertex’s Food and Drug Administration-approved products treat cystic fibrosis.) Paul Matteis, a Stifel analyst, wrote in a note to investors on Thursday that the news was “a negative surprise” and it will pressure the stock. However, he also noted that development of a “structurally distinct” back-up compound is underway. Vertex’s stock is up 24.0% for the year, while the S&P 500 has gained 7.9%.
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