Is This Biotech Stock a Buy Near Its 52-Week High?

The first five months of 2026 were rough on Vertex Pharmaceuticals (NASDAQ: VRTX). The biotech's shares moved in the wrong direction through early June. However, the drugmaker has bounced back in style over the past month, with its stock gaining 10%. Vertex Pharmaceuticals is now up 9% this year and recently hit a fresh 52-week high. Is there more upside left for the stock? Let's find out.

Potential catalysts on the horizon

Several recent developments explain why the market is increasingly excited about Vertex Pharmaceuticals' prospects. First, the company recently received a label expansion for Casgevy, a gene-editing medicine for sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT), two blood-related diseases. Casgevy is now indicated to treat patients as young as two who have TDT or SCD (it was previously approved for people 12 and older).

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This regulatory milestone adds 5,500 patients to Vertex's addressable market, but, even more importantly, it allows patients and their families to treat these diseases before they have had time to significantly impact their lives. Casgevy has not generated much revenue since its 2023 approval. This label expansion should help boost its sales. Second, Vertex Pharmaceuticals is awaiting approval for povetacicept, an investigational medicine for IgA nephropathy (IgAN), a kidney disease. U.S. regulators could give this therapy the green light by the end of November.

Povetacicept would be a key addition to Vertex's lineup. Given the more than 1.5 million IgAN patients worldwide and the medicine's potential approval across other indications, some analysts project it could reach peak sales of about $4.3 billion. Third, Vertex Pharmaceuticals has several other late-stage clinical trial candidates that could make good progress. For instance, the company is developing inaxaplin, a potential therapy for APOL-1-mediated kidney disease, and expects some data readouts later this year.

Lastly, Vertex Pharmaceuticals announced the acquisition of Crinetics Pharmaceuticals (NASDAQ: CRNX), a biotech company focused on developing medicines for endocrine diseases, for $10 billion in cash. Vertex estimates that this buyout adds more than $5 billion in potential peak annual sales to its lineup. All these developments make Vertex Pharmaceuticals' medium-term prospects attractive.

The core business is still going strong

Vertex Pharmaceuticals remains the leader in its core therapeutic area: developing medicines for patients with cystic fibrosis (CF). This rare disease causes thick mucus to form in the lungs, disrupting the airways and leading to chronic infections. Vertex remains the only game in town. It markets the only drugs that treat the underlying causes of CF. Though the biotech has been dominating this area for a long time, business is still good. In the first quarter, Vertex Pharmaceuticals' revenue increased by 8% year over year to $2.99 billion. The company's adjusted earnings per share climbed 10% year over year to $4.47.

Vertex Pharmaceuticals still has a decent patient population to address as it expands into new territories and earns new label expansions, especially for younger patients. The company's core business should remain a growth driver over the next decade, as its most important products won't face patent cliffs until the late 2030s. Even though some pharmaceutical companies are developing competing therapies, all previous attempts have failed. Successes may come, eventually, but that's also why Vertex has diversified its lineup.

The company's newer non-CF approvals, including Casgevy and Journavx, a medicine for acute pain, should start meaningfully contributing to top-line growth within a couple of years. Vertex expects at least $500 million in non-CF revenue this year. That will represent less than 5% of its revenue, but with Casgevy gaining traction thanks to label expansions and Journavx meeting strong demand for non-opioid pain drugs, they should post solid sales growth over the next few years. So, Vertex Pharmaceuticals still has plenty of upside ahead, even though it recently hit a new 52-week high. Investors can safely hold this stock for the long term.

Prosper Junior Bakiny has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.