NEW YORK, Dec. 6, 2010 /PRNewswire/ -- Vertex Pharmaceuticals (VRTX: $33.50) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. VRTX carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"Our recommendation is based on our positive outlook for Vertex's development drug telaprevir to emerge as a leader in new treatment paradigms for chronic hepatitis C," said Steven Silver, Biotechnology Equity Analyst at Standard & Poor's Equity Research. "We also view favorably Phase III results among prior treatment-failure patients, particularly in relapsers/partial responders, versus other late-stage development rivals. Vertex completed an FDA new drug application in November 2010 and requested a six-month priority review, which we view as likely to be granted in early 2011."
Silver observes that although VRTX shares are volatile, which he attributes to its significant cash burn rate related to pipeline investment and to a rapidly changing chronic hepatitis C competitive landscape, he expects Vertex to dominate the market over the near term, while aggressively advancing next-generation combination products of its own to support long-term market share. He also looks for Vertex to attract acquisition interest, as big pharma faces a patent cliff with few late-stage drugs with market potential as promising as what he sees for telaprevir.
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S&P Global STARS Distribution
In North America
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 39.2% of issuers with buy recommendations, 52.5% with hold recommendations and 8.3% with sell recommendations.
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 36.6% of issuers with buy recommendations, 43.2% with hold recommendations and 20.2% with sell recommendations.
As of September 30, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 46.8% of issuers with buy recommendations, 44.4% with hold recommendations and 8.8% with sell recommendations.
As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 39.5% of issuers with buy recommendations, 50.2% with hold recommendations and 10.3% with sell recommendations.
5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.
4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.
3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.
2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.
1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.
Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.
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