Morgan Stanley Turns Bullish on Vertex Pharmaceuticals

Morgan Stanley upgraded Vertex Pharmaceuticals (VRTX) to Overweight from Equal Weight, pointing to growing confidence in the company’s late-stage pipeline for kidney disease treatments.

Price Target Raised

New price target: $516 (up from $438)
Implies ~19% upside from the Dec. 2 close

Key Pipeline Drivers: Pivetacicept & Inaxaplin

Analyst Terence Flynn highlighted two major candidates:

Povetacicept – Phase 3 for IgA nephropathy
Inaxaplin – Phase 3 for APOL1-mediated kidney disease

Flynn emphasized that successful Phase 3 results in 2026 would:

Significantly expand Vertex’s revenue base
Reduce reliance on its cystic fibrosis franchise (expected to decline from 98% of revenue in 2025 to 49% by 2035)
Accelerate long-term growth in both revenue and EPS

Probability of Success & Sales Outlook

Povetacicept: 75% probability of success; 2035 risk-adjusted sales estimate: $3.5B
Inaxaplin: 50% probability of success; 2035 risk-adjusted sales estimate: $2.6B
- Notably, inaxaplin addresses a condition with no currently approved treatment, presenting a significant commercial opportunity.

Strategic Implications

The kidney portfolio is positioned to become a major growth pillar for Vertex over the next decade, providing diversification and improving long-term financial durability.