Vertex Up 25% YTD: Should You Buy, Sell or Hold the Stock?

Core Viewpoint - Vertex Pharmaceuticals has experienced a significant stock decline of 25.3% this year, contrasting with a 5.4% increase in the industry, despite recent product approvals that could drive future growth [1][2]. Group 1: Product Approvals and Sales Growth - Vertex gained approval for two new products: Journavx, a non-opioid pain medicine, and Alyftrek, a new cystic fibrosis (CF) treatment, which are expected to enhance sales [3][8]. - Vertex's CF product sales have consistently risen, with revenues increasing in the double-digit range for 10 consecutive years, driven by strong demand for Trikafta/Kaftrio, particularly in younger age groups [4][5]. - The launch of Alyftrek is anticipated to contribute to medium-term growth, while the ongoing demand for Trikafta/Kaftrio is expected to sustain sales in the near term [5][9]. Group 2: Diversification and Pipeline Development - The approval of Casgevy, a gene therapy for sickle cell disease and beta-thalassemia, diversifies Vertex's commercial opportunities, with an estimated patient population of around 60,000 in the U.S. and Europe [6][7]. - Vertex is advancing its pipeline with a focus on CF and other disease areas, including acute and neuropathic pain, with multiple candidates representing multibillion-dollar opportunities [13][14]. - The acquisition of povetacicept is expected to enhance Vertex's pipeline, targeting serious autoimmune diseases, with ongoing phase III and phase II studies [15]. Group 3: Financial Performance and Valuation - Vertex's stock is currently trading at a premium compared to the industry, with recent earnings estimates for 2025 and 2026 showing slight declines [16][19]. - Despite the premium valuation and declining estimates, Vertex is expected to achieve around 8% sales growth in 2025, driven by CF franchise growth and contributions from new products [25][26].