Vertex Pharmaceuticals named a ‘Catalyst Driven Idea’ at Morgan Stanley

Morgan Stanley named Vertex Pharmaceuticals as a “Catalyst Driven Idea” ahead of topline data from three Phase 3 studies of VX-548 for acute pain. Vertex management plans to unblind all 3 trials of VX-548 for acute pain and report data simultaneously in early 2024, notes the analyst, citing the company’s goal of achieving a broad moderate-to-severe acute pain label. In scenario where VX-548 demonstrates clinically meaningful pain reduction versus Vicodin in acute pain studies, to which the firm assigns a 10% probability, Morgan Stanley would expect shares to trade up 4%-9%, with the magnitude of the stock movement dependent on if one or both studies are superior. In a scenario where VX-548 demonstrates superiority to placebo, and numerically similar pain reduction to Vicodin in acute pain studies, to which the firm assigns 35% probability, Morgan Stanley would expect shares to trade up 2%-4%. If either study fails or the studies report cardio/kidney toxicity adverse events, the firm would expect shares to trade down 15%-20% and thinks investors will question the odds of success of the asset across indications. Morgan Stanley has an Equal Weight rating and $368 price target on Vertex shares.