VRTX – Market expectations are for Uniform ROA expansion, but management may be concerned about growth, Semma Therapeutics, and their pipeline

• Vertex Pharmaceuticals Incorporated (VRTX:USA) trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 29.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about growth, their Semma Therapeutics acquisition, and their treatment pipeline
• Specifically, management may lack confidence in their ability to sustain operating income growth and to develop a treatment for patients suffering from hypoglycemic episodes that does not require immunosuppression. Furthermore, they may be exaggerating the growth potential of their corporate and research strategies, and the potential of their Semma Therapeutics acquisition. Management may also be exaggerating their enthusiasm surrounding the FDA’s approval of TRIKAFTA, the strength of their organic and acquired medicine pipeline, and their ability to invest in innovative medicines. Furthermore, they may be overstating the global reach of their CF treatments and the benefits of CFTR modulators