Canaccord maintains Vertex stock Hold rating, $424 target

On Tuesday, Canaccord Genuity maintained its Hold rating on Vertex Pharmaceuticals (NASDAQ:VRTX) with a steady price target of $424.00. The decision follows Vertex’s announcement last Friday that its VX-264 program for Type 1 Diabetes (T1D) would not proceed to further development. The program’s termination was due to its failure to meet the primary endpoint in a clinical trial. With a market capitalization of $124.5 billion and a strong YTD return of 20.39%, Vertex remains a prominent player in the biotechnology sector. According to InvestingPro analysis, the company is currently trading above its Fair Value, with 14 additional ProTips available to subscribers.

Vertex’s announcement detailed that VX-264, a combination of cells and a device, did not show the expected change in peak C-peptide during the Mixed-Meal Tolerance Test (MMTT). This outcome was not entirely unexpected, as Canaccord Genuity had previously noted potential issues with VX-264. In June of the previous year, concerns were raised when Vertex expanded the study of another candidate, VX-880, which was seen as a potential red flag for VX-264’s success. Further skepticism arose in January when Vertex introduced "VX-880+an alternative IS regimen," adding to the uncertainty surrounding VX-264. Despite these challenges, the company has maintained solid revenue growth of 11.66% over the last twelve months, demonstrating its resilience in the broader pharmaceutical market.

Despite the setback with VX-264, Canaccord Genuity expressed continued enthusiasm for T1D treatments. However, they believe that the opportunities for VX-880 are limited due to the necessity for chronic immunosuppression in patients. The firm is also cautious about ascribing value to the new VX-880+modified IS regimen, citing unclear progress and timelines. Canaccord Genuity is interested in the potential of gene-edited hypoimmune stem-cell derived islet cell therapies but notes that the development in this area remains uncertain. For investors seeking deeper insights, InvestingPro offers a comprehensive research report on Vertex, part of its coverage of 1,400+ US stocks, providing detailed analysis of the company’s financial health, which currently scores as "Good" with a 2.78 overall rating.

Following a recent discussion with Vertex’s T1D program lead, Canaccord Genuity has chosen to leave its financial model for Vertex unchanged for the time being. However, it was noted that VX-264 represented approximately $12 per share of their price target. The firm reiterated its Hold rating, signaling a neutral stance on Vertex stock for the near to medium term. The stock currently trades near its 52-week high of $519.88, with relatively low price volatility as indicated by its beta of 0.41.

In other recent news, Vertex Pharmaceuticals has halted further clinical trials for its type 1 diabetes treatment VX-264 due to efficacy data that did not meet expectations, despite the therapy being well tolerated. Conversely, Vertex’s zimislecel therapy for type 1 diabetes is progressing well, with plans for global regulatory submissions in 2026. This development is part of Vertex’s broader efforts to advance therapies for type 1 diabetes. In another update, Vertex’s non-opioid pain medication, Journavx, has been included in UnitedHealth (NYSE:UNH)’s coverage, although it has been placed on a higher-cost tier compared to other pain treatments. The drug received approval in January, and its commercial success will depend on its classification by pharmacy benefits managers. Meanwhile, DA Davidson has maintained its Buy rating on Veritex (NASDAQ:VBTX) Holdings, highlighting the company’s progress in securing funding and its strategic positioning for growth. The analyst firm remains optimistic about Veritex’s potential for improved profitability metrics. Lastly, Vertex, Inc. reported in-line fourth-quarter results but issued weak guidance for the first quarter of 2025, forecasting revenue below analyst projections. Despite a positive full-year outlook, investors reacted to the soft Q1 guidance, leading to a notable decline in the company’s shares.

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