VRTX Diverts Attention From Big Earnings Miss To Early-Stage Pipeline Candidate – Hep C Trade May Be On Today For Names Like ACHN and IDIX

VRTX missed second quarter earnings by a wide margin on the top- and bottom lines. The company reported EPS of $0.46, nearly half of what Wall Street was expecting (consensus estimate was $0.87). Importantly, its hepatitis C product and largest component of revenue, Incivek, had sales of $328 million, vs. the consensus estimate of $370 million. Kalydeco, the company’s treatment for cystic fibrosis (CF) delivered $45.5 million in sales, in-line with expectations. Topping off the bad news, VRTX reduced its internal estimates for Incivek from  $1.5-1.7 billion this year to $1.1-1.25 billion. However, in order to divert attention away from the poor results – at least one analyst downgraded this morning – the company released clinical data for its early-stage hepatitis C candidate, ALS-2200. While the 8-patient results showed impressive potency, there are still many risks associated with fully developing the compound, including the potential for long-term safety issues and the appropriate combination of agents to create a “cocktail” cure. (more…)