Vertex Pharmaceuticals Just Made a $10 Billion Acquisition Worth Watching
The biotech's diversification efforts continue.
Overview
Vertex Pharmaceuticals (NASDAQ: VRTX) has dominated the cystic fibrosis (CF) drug market for more than a decade. This has been a very lucrative business for the biotech, and it could continue generating steady revenue and earnings from its CF products until the late 2030s, when its most important products will lose patent exclusivity. However, since it takes a long time to develop brand-new drugs, it's a good idea for Vertex Pharmaceuticals to start preparing for these patent cliffs.
Besides, there is always the possibility (however remote, considering past attempts) that another company will succeed in cracking the CF code and market competing medicines. If that happens, Vertex's shares could fall off a cliff. That's why it's important for the company to diversify its portfolio, and Vertex Pharmaceuticals recently announced an acquisition that will help it do so.
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Originally published at www.fool.com.