Vertex slips after FDA clinical hold even as analysts defend the stock
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Vertex Pharmaceuticals (NASDAQ:VRTX) has recorded the biggest intraday loss in nearly 11 months on Monday, even after several Wall Street analysts urged investors to buy the stock on the dip following an FDA-imposed clinical hold on a study for the diabetes candidate, VX-880.
VX-880 is an allogeneic insulin-producing islet cell therapy derived from stem cells, and Stat News
reported in early April that the scientist behind the technology, Douglas Melton, was leaving Harvard University to join the Vertex (VRTX).
As the reason for the clinical hold, the FDA cited inadequate information to support dose escalation of the product candidate.
Jefferies analyst Michael Yee said that âthe diabetes program has a slight setback today but weâd buy the dip since itâs not the primary thesis to the story.â He noted that the cell therapy holds usually last four to five months.
Truist's Robyn Karnauskas shared similar views and argued that the clinical hold was not a negative.
âWeâre defending the stock and recommend owning within the group as it is one of the cleaner, growth stories in our view that continues to beat and raise on Trikafta uptake in other geographies,â Bloomberg reported, quoting Karnauskas.
In March, Vertex (VRTX) announced a favorable reimbursement decision for the cystic fibrosis therapy, Trikafta for certain patients aged 12 years and older in Australia.