Vertex Pharmaceuticals Gets 96% of Product Sales From Treatments for 1 Disease. Here's Why That's About to Change.

Vertex Pharmaceuticals' (NASDAQ: VRTX) stable of cystic fibrosis (CF) therapies is one of the biggest monopolies among biotech companies. The company was founded in 1989 and, after dabbling in infectious diseases, struck gold when it switched to genetic medicines.

Prior to Vertex's innovations, CF care was focused on clearing lung mucus, preventing infections, and managing symptoms. Vertex pioneered CFTR modulators, small-molecule drugs that target the underlying genetic defects in the CFTR protein that can cause cystic fibrosis.

Its first CF drug was CFTR modulator Kalydeco, which received Food and Drug Administration (FDA) approval in 2012. The company now has four CF therapies, led by the Trikafta/Kaftrio combination, which brought in $4.8 billion in sales through the first six months, and Alyftrek, which brought in $998 million through that period.

Of its $3.33 billion in second-quarter revenue, $3.2 billion came from CF therapies, about 96%. That ratio should soon change, however.

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A breakout is already in progress

Vertex has said it is expecting $500 million or more in 2026 sales from non-opioid pain reliever Journavx and Casgevy, a gene-editing therapy developed with CRISPR Therapeutics (NASDAQ: CRSP), a potentially curative one-time treatment for severe sickle cell disease and another genetic blood disease, beta-thalassemia.

Vertex also just released positive Phase 2b trial data on APOL1-Mediated Kidney Disease (AKMD) therapy inaxaplin. The company found that the oral therapy reduced protein leaking in urine, a leading sign of kidney damage, with no serious side effects. The patient pool for AKMD is unknown but is considered to be in the millions. The therapy is also being tested in a separate trial on patients with diabetes-related kidney disease.

Because no FDA-approved therapies target the genetic cause of AMKD, inaxaplin is positioned to capture first-in-class, first-mover market share. Analysts see the therapy as having the potential for at least $1 billion in annual sales.

The results in AMKD patients with moderate proteinuria may allow for a broader label for inaxaplin than previously expected. Vertex has already tested it in patients with focal segmental glomerulosclerosis (FSGS), a rare, severe, and destructive form of kidney disease where scar tissue forms on the glomeruli, the tiny filtering units of the kidneys. In the study, patients experienced a 43.4% reduction in urine albumin-to-creatinine ratio (UACR) after 13 weeks.

Its focus on other rare diseases could soon pay off

Looking beyond its recent trial with inaxaplin, Vertex has a large pipeline with several other promising late-stage candidates.

Povetacicept, acquired through its $4.9 billion purchase of Alpine Immune Sciences in 2024, positions Vertex in autoimmune conditions such as IgA nephropathy and generalized myasthenia gravis. It is an affinity-optimized Fc fusion protein. The drug has a Prescription Drug User Fee Act (PDUFA) date of Nov. 30, so it could be approved later this year or early next year.

The company is also testing zimloceucel, a stem-cell-derived therapy to treat type 1 diabetes. Its goal is to restore endogenous insulin production and potentially cure type 1 diabetes without requiring lifelong immunosuppression.

Its financial strength supports its pipeline expansion

The company's second-quarter revenue of $3.33 billion represents a 12% year-over-year rise. Vertex also raised its full-year revenue target to $13.1 billion to $13.2 billion, up from earlier guidance of $12.95 billion to $13.1 billion.

Earnings per share (EPS) were $4.31 in the quarter, up 8% over the same period a year ago. The company has solid cash flows, allowing it to close its largest acquisition to date on Sept. 1, a $10 billion purchase of Crinetics Pharmaceuticals, known for its endocrine disease therapies.

Crinetics' lead therapy is Palsonify, the only oral therapy approved for adults with acromegaly, a rare hormonal condition that causes some bones, organs, and other tissues to grow larger.

The purchase of Crinetics also brings along another promising late-stage therapy. Atumelnant is a once-daily pill to treat congenital adrenal hyperplasia, a rare endocrine condition that adversely affects the adrenal glands, which produce hormones that help regulate metabolism, the immune system, blood pressure, and other key functions. Atumelnant is also being tested to treat Cushing's syndrome.

Vertex is ready for the next step

The company's shares are up more than 15% so far this year, but considering its growth potential, that doesn't appear to be just from hype. Vertex has increased annual revenue by more than 600% over the past decade and has used profits from its CF franchise to broaden its base into other rare-disease areas.

The Crinetics purchase is expected to take years to pay off, but Vertex is sticking to a proven game plan by purchasing therapies that target severe diseases in which the underlying biology is well understood, patient populations are concentrated, and existing treatment options are severely lacking.

This exact strategy is what turned its CF business into a massive financial success. Beyond aligning with its core philosophy, the acquisition provides Vertex with new revenue streams beyond its CF treatments.

James Halley has positions in CRISPR Therapeutics. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool recommends CRISPR Therapeutics. The Motley Fool has a disclosure policy.