Shares of Vertex Pharmaceuticals Inc. VRTX, -6.17% were down 4.3% in trading on Tuesday, the day after the company discussed its deal-making strategy with analysts during its fourth-quarter earnings call. The company said it is considering buying companies with mid- to late-stage products in development in the future. “I have no preconceived notions about the timing of a transaction, and I have no preconceived notions about the dollar amount of a transaction,” said Vertex CEO Reshma Kewalramani said, according to a FactSet transcript of the call. “It has to fit our R&D strategy. It has to be transformative. We have to be able to add value.” Three of the company’s four drugs – cystic fibrosis drugs Kalydeco, Orkambi, and Symdeco – had a year-over-year sales decline in 2020, with each generating less than $1 billion in revenue for the year. Trikafta, its newest CF drug, generated $3.8 billion in sales in 2020, which was its first full year on the market following a 2019 approval from the Food and Drug Administration. The company’s cash balance of roughly $7 billion at the end of 2020 indicates it has “tremendous firepower for transactions,” according to SVB Leerink’s Geoffrey Porges. But he also noted that any deals of interest to Vertex may demand a “hefty premium” in the current market. Vertex’s stock is down 1.5% over the past 12 months, while the S&P 500 SPX, +1.68% is up 17.0%.
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