Biotech stocks have been struggling on the stock market for years, with investors turning to other trends. It’s no wonder that hardly any biotech stock has shown a strong performance in recent years. An exception is Vertex Pharmaceuticals.

Brief portrait of Vertex Pharmaceuticals The US biotech company specializes in the treatment of cystic fibrosis, also known as mucoviscidosis. This is a life-shortening metabolic disease that occurs in childhood. All approved drugs are from Vertex. From 2012 to 2019, Vertex has brought five drugs for different mutations of cystic fibrosis to market and is unrivaled in this field.

In the research pipeline, there are also two other potential blockbusters: the very first gene scissors drug (which recently received its first approval) and an innovative pain reliever, which I will discuss in more detail below.

A new opioid-free pain reliever excites investors In December, after positive news from the research pipeline, Vertex’s stock jumped double-digit percentage points: The pain reliever VX-548 showed very effective results in a phase II clinical trial.

The special thing about VX-548 is that it is not based on the usual opioids. The addiction potential of opioids has become a huge problem: In the US alone, an estimated 2.5 million people are affected by opioid addiction, and more than 80,000 died from opioid overdoses in 2022. New pain relievers that are not addictive are urgently needed.

Innovative mode of action VX-548 targets the blocking of sodium channels in the nerves that transmit pain. Similar drugs already exist. However, the problem here is that they also block important channels in heart cells and the brain, which is why they can only be administered as local anesthetics. VX-548, on the other hand, targets a specific sodium channel, making it the first drug of its kind that does not have any impact on the heart and brain when blocked.

Potential billion-dollar revenues If Vertex succeeds in bringing the new pain reliever to market, VX-548 could become a billion-dollar business. Of course, there is still a long way to go. I don’t expect approval before 2026. But the chance is realistic – and that’s exactly what investors want to see. The US health authority has already awarded VX-548 breakthrough therapy status and fast-track status, which shortens the approval process.

Stock is relatively cheaply valued In the past two and a half years, Vertex’s stock price has more than doubled. Of course, many stocks in the technology sector have also achieved this – and some even more – but in the biotech sector, this is an absolute exception among larger companies.

And the chances are good that the upward trend will continue. The core business continues to deliver increases in sales and earnings. And with the new gene scissors and the new pain reliever, Vertex has the opportunity to tap into new growth drivers.