The Biotech Leatherneck That Won't Stand Down

Back in my Marine days, I remember being dropped in the middle of nowhere during a grueling field exercise. No map, no compass, just our wits and training to guide us back to base.

The odds were stacked against us, but we adapted, improvised, and overcame. Fast forward to roughly half a century, and I'm seeing the same spirit in an unlikely place - the biotechnology sector.

Vertex Pharmaceuticals (VRTX) has been executing maneuvers that would make any seasoned Marine proud. They move with the precision of a well-oiled M16 and the adaptability of a Force Recon team.

Their strategic acquisitions? As coordinated as an amphibious landing. That pipeline of theirs? Locked and loaded like a Marine fire team.

As I dive into Vertex's recent maneuvers, I can't help but see parallels to the strategies we used to employ. They're not just developing drugs – they're waging a full-scale assault on diseases that have long evaded defeat.

It's this Marine-like tenacity that's kept this $122 billion biotech on my radar, and why I think they've still got plenty of fight left in them.

Remember when I last wrote about Vertex in February? The stock was already hotter than a mess tent coffee pot then. Since that newsletter, it's climbed another 10%, leaving the S&P 500 in its dust like a young boot on a forced march.

And if you've been holding onto Vertex for the past decade? Well, pour yourself a whiskey and celebrate. You're sitting on a 545% return. That's not a typo, my friends. It has truly beaten the S&P 500 by over 300 points.

Now, I know what you're thinking. "John," you say, "hasn't this non-dividend payer run out of ammo after adding $20 billion to its market cap?" Well, let me tell you why I think Vertex still has enough firepower to make even a seasoned Gunny sit up and take notice.

So, here's the skinny on Vertex – they've got a knack for developing groundbreaking drugs that would make even our old field medics green with envy. They lock 'em down with patents tighter than a drill sergeant's schedule, and dominate niche markets like we used to dominate obstacle courses.

In Q1 2024, Vertex hauled in $2.69 billion in revenue, up 14% from last year. That's not just chump change – that's serious cabbage, even by Wall Street standards.

But here's where it gets interesting, and I mean more interesting than finding an unopened can of beer in your rucksack after a long hump.

Vertex isn't just sitting pretty. Their late-stage pipeline is packed tighter than a C-130 on deployment day, full of potential blockbusters that could change lives – and fatten our wallets.

Take Vanzacaftor, for instance. This cystic fibrosis drug is showing more promise than a boot camp graduate on family day. If it lives up to the hype, we could be looking at a new gold standard in CF treatment.

And then there's Suzetrigine. Now, this one's got me more excited than a three-day pass in Vegas. It's a non-opioid painkiller, and with the opioid crisis still raging harder than a Category 5 hurricane, a safe, effective alternative could be a game-changer.

Early data looks promising, and Vertex is pushing to finish its rolling submission by Q2 2024. As for its potential market? Well, that's bigger than the chow line on Thanksgiving.

We're talking about 80 million patients prescribed pain meds in the U.S. every year, covering one billion calendar days of treatment.

If Suzetrigine can grab even a slice of that pie, we're looking at another potential blockbuster that could make AbbVie’s (ABBV) top-selling Humira look like small potatoes.

But Vertex isn't content with just dominating CF and pain management. They're also pushing into new territories.

In April, they dropped $4.9 billion to snap up Alpine Immune Sciences, grabbing the rights to Povetacicept. This mid-stage drug targets IgA Nephropathy, which affects about 130,000 people in the U.S. That's a smart flanking maneuver if I ever saw one.

On top of all these, though, I think the biotech’s real showstopper might be Casgevy, Vertex's gene therapy for sickle cell disease and beta-thalassemia.

Developed with CRISPR Therapeutics (CRSP), this cutting-edge treatment uses CRISPR gene-editing technology.

It's like having a sniper rifle when everyone else is still using muskets. Vertex sees this as a potential multi-billion dollar opportunity, and I'm inclined to agree. It could be bigger than the Pentagon's budget – well, almost.

Look, I get it. Vertex doesn't pay a dividend, which might turn off some of you income-focused folks faster than a week-old MRE. But for those willing to bet on growth, this biotech juggernaut still has plenty of fight left in it.

With a killer pipeline spanning CF, pain management, kidney health, and even type 1 diabetes, Vertex is primed to keep growing like kudzu in August.

Their solid portfolio and promising drug candidates make it a compelling investment, and those revenue and EPS projections? They're music to my ears – sweeter than Taps at the end of a long day.

Here's my take: With a fair stock price target of $566, Vertex still has significant upside potential. I think it’s a biotech powerhouse that deserves a spot on your watchlist – right next to your old service medals.