William Blair analyst Y. Katherine Xu upgraded Vertex Pharmaceuticals (VRTX) to Outperform from Market Perform on expectations the company's cystic fibrosis franchise will continue dominating after Proteostasis (PTI) reported disappointing triplet data. Proteostasis' triplet efficacy falls short of the high bar set by the Vertex triples, Xu tells investors in a research note. While Proteostasis is starting a Phase II study of the triplet that would include a higher PTI-808 dose and test a longer duration aiming to optimize response with data out around year-end 2019, the chance of it matching or exceeding Vertex triple efficacy is "very low," contends the analyst. With both Galapagos (GLPG)/AbbVie (ABB) and Proteostasis having shown "subpar data," Xu is upgrading Vertex shares to Outperform and raised her fair value estimate for the shares to $222 from $178. The analyst maintains her high probability of success of a Vertex triple combo reaching the cystic fibrosis market at 90% and ascribe peak sales of $10.2B, up from $8.9 billion previously.

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Vertex Pharmaceuticals announced that the European Commission has granted approval for the label expansion of KALYDECO for the treatment of infants down to 1 month of age with cystic fibrosis who have one of the following mutations in the cystic fibrosis transmembrane conductance regulator gene: R117H, G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N or S549R. As a result of existing access agreements in Austria, Czech Republic, Denmark, Ireland, Norway, Sweden, and The Netherlands, eligible patients will have access to the expanded indication of KALYDECO shortly following regulatory approval by the European Commission. Vertex will continue to work with reimbursement authorities across the European Union to ensure access for all other eligible patients. In the U.K., following MHRA approval at the end of 2023, and as a result of the existing reimbursement agreement between Vertex and the National Health Service, eligible infants ages 1 month and older in the U.K. have access to this expanded indication for KALYDECO.

Sees FY24: Skyrizi revenue $10.7B; Rinvoq revenue $5.6B; Imbruvica revenue $3.1B; Elahere revenue $450M. Sees FY24 adjusted gross margin 84%. Expects FX to have 0.9% impact on FY sales.

Says "successfully navigating" Humira loss of exclusivity. Says executing well across all aspects of the business. Says multiple growth drivers to support long term outlook. Says continues to advance R&D pipeline. Says well positioned to deliver high single digit revenue CAGR through end of decade. Comments taken from Q1 earnings conference call.

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Global net revenues from the immunology portfolio were $5.371B, a decrease of 3.9 percent on a reported basis, or 3.1 percent on an operational basis, due to Humira biosimilar competition. Global Humira net revenues of $2.270 billion decreased 35.9 percent on a reported basis, or 35.2 percent on an operational basis. U.S. Humira net revenues were $1.771 billion, a decrease of 39.9 percent. Internationally, Humira net revenues were $499 million, a decrease of 15.8 percent on a reported basis, or 11.6 percent on an operational basis. Global Skyrizi net revenues were $2.008 billion, an increase of 47.6 percent on a reported basis, or 48.0 percent on an operational basis. Global Rinvoq net revenues were $1.093 billion, an increase of 59.3 percent on a reported basis, or 61.9 percent on an operational basis.

FY24 consensus $11.10.

Notable companies reporting before tomorrow's open, with earnings consensus, include Exxon Mobil (XOM), consensus $2.20... Chevron (CVX), consensus $2.87... AbbVie (ABBV), consensus $2.23... HCA Healthcare (HCA), consensus $5.01... Colgate-Palmolive (CL), consensus 81c... Charter (CHTR), consensus $7.92... AutoNation (AN), consensus $4.27.

AbbVie announced positive topline results from LEVEL UP, an open-label, efficacy assessor-blinded head-to-head Phase 3b/4 study that evaluated the efficacy and safety of upadacitinib versus dupilumab in adults and adolescents with moderate-to-severe atopic dermatitis who had an inadequate response to systemic therapy or when use of those therapies was inadvisable. In the LEVEL UP study, upadacitinib showed superior efficacy versus dupilumab in the primary endpoint, demonstrating that a significantly higher proportion of patients simultaneously achieved both a 90% or greater reduction in Eczema Area and Severity Index and a Worst Pruritus Numerical Rating Scale of 0 or 1 at Week 16.