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The biotech industry is experiencing a strong rebound in 2026 after lagging the market in recent years. Based on several ongoing developments -- including breakthroughs in oncology and chronic weight management -- we may see a sustained run from the industry over the next few years. Even if we don't, several individual biotech companies look like strong medium-term options right now, including Vertex Pharmaceuticals (VRTX -2.25%) and Regeneron (REGN -1.88%). There is a lot to like about both of these drugmakers, but which one is the better buy? Let's find out.

Image source: The Motley Fool.

Vertex's core area is the backbone of a healthy business Vertex Pharmaceuticals doesn't have a long list of products like many of its similarly sized peers in the biotech industry. That's because it doesn't need to. The company famously dominates the market for cystic fibrosis (CF) drugs, a rare disease that causes difficulty breathing and recurrent infections.

Vertex makes consistent revenue and earnings thanks to its portfolio in this field. There is always the risk that another drugmaker will launch competing medicines and challenger Vertex. But so far, no one has been able to. Sionna Therapeutics (SION +5.93%), a small-cap biotech, recently added yet another name to the long list of candidates that have tried -- and failed -- to challenge Vertex's core franchise.

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Here's the best part. Vertex Pharmaceuticals won't lose patent exclusivity for its most important CF products until the late 2030s. In the meantime, the company is diversifying its lineup. It has earned approval for Journavx, a non-opioid medicine for acute pain, and Casgevy, a gene-editing therapy for two rare diseases.

It should also earn approval for povetacicept, a drug for IgA nephropathy (a kidney disease), by the end of November. Further, Vertex has several promising mid and late-stage candidates. As the company continues to generate significant sales in its core area and launches new products, it could deliver solid returns.

Regeneron's rebound is in full swing Regeneron faced some challenges a couple of years ago due to biosimilar competition for Eylea, a medicine for several eye-related disorders that was one of its main growth drivers. However, the company has largely moved past that headwind thanks to a new, higher-dose (HD) version of Eylea that can be administered fewer times per year. The convenience of the new formulation is attracting many patients. Sales of the original Eylea are still dropping, but Eylea HD is making up for that.

Elsewhere, Regeneron's most important growth driver is Dupixent, a medicine for COPD and eczema that it co-markets with Sanofi (SNY -0.24%). This therapy continues to post solid sales growth. Although it could lose patent exclusivity in the U.S. in 2031, Regeneron and Sanofi plan to extend its patent life, notably by developing an HD version, just as Regeneron did with Eylea.

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Regeneron also has several attractive pipeline candidates. Perhaps the most important are in the weight loss area. Regeneron is developing olatorepatide, a dual GLP-1 and GIP agonist that posted excellent phase 3 clinical trial results in China. Regeneron also has a highly differentiated weight loss medicine it is developing to help patients maintain muscle mass while they lose weight on GLP-1 drugs. Since the weight-loss market is one of the fastest-growing segments in the industry, investors should closely monitor Regeneron's progress. Between the drugmaker's current approved portfolio and pipeline, the future looks bright.

My view is that Vertex Pharmaceuticals is the better buy between the two, even though Regeneron typically generates higher revenue. Here's why.

VRTX Revenue (Quarterly) data by YCharts

First, Vertex edges Regeneron when we consider margins and free cash flow.

VRTX Gross Profit Margin (Quarterly) data by YCharts

Second, Vertex's core business has a much stronger competitive advantage. It has been defending its lead in the CF market for years, is still basically the only game in town, and benefits from substantial pricing power as a result. Dupixent is also a strong performer, but it operates in a much more competitive space, as does Eylea.

Third, although Regeneron's weight-loss candidates look promising, a clinical setback will significantly depress the stock price. And the company's strategy over the next decade also depends a lot on its ability to defend its Dupixent empire, which will be challenging.

Of note, even with Eylea HD's success, Regeneron faces stiff competition in this niche from Vabysmo, a medicine with overlapping indications and a friendlier dosing schedule than the original Eylea. Similarly, breakthroughs in immunology could pose a major challenge to Regeneron's long-term plans, even if it manages to extend Dupixent's patent life.

Meanwhile, Vertex's diversification plans are well underway, and it should make substantial progress over the next couple of years. Vertex isn't going after the weight-loss market (at least not yet). Instead, it is mostly targeting smaller areas with high unmet needs, where it will face little competition. Its success in the CF market shows the potential of this strategy. That's another reason Vertex is a better option.

BOSTON--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today announced the successful completion of the acquisition of Crinetics Pharmaceuticals, Inc. (Nasdaq: CRNX), a global pharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for endocrine diseases. Vertex also announced the expansion of its executive leadership team, in support of the Company's continued growth and diversification. Completion of Acquisition of Crinetic.

BOSTON--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today announced management participation in four upcoming investor conferences. Susie Lisa, Senior Vice President of Investor Relations and Manisha Pai, Executive Director of Investor Relations, will participate in a fireside chat at the Wells Fargo 21st Annual Healthcare Conference on Wednesday, September 9, 2026, at 4:30 p.m. EDT. Susie Lisa and Manisha Pai will also participate in a fireside chat at the 2026 Cantor G.

Vertex Pharmaceuticals (VRTX -2.14%) has dominated the cystic fibrosis (CF) drug market -- where it has a virtual monopoly -- since it launched its first medicine in this field in 2012. As a result, it has performed extremely well over this period. However, the bears argue that because the biotech generates almost all of its sales from this therapeutic area, its business would crumble once it faces competition. And many thought that day was getting closer, as Sionna Therapeutics (SION -11.68%) seemed to be developing potentially better CF drugs. But recent developments have proved once again why Vertex won't easily lose its lead in its core market. Here's what investors need to know.

Image source: The Motley Fool.

Sionna's leading candidate flops First, some background on CF. The disease is caused by mutations in the CFTR gene, which produces a defective CFTR protein. Vertex Pharmaceuticals' medicines can significantly improve CFTR function, but even with these drugs, most patients don't achieve normal CFTR protein function. Sionna Therapeutics is trying to change that. The company's medicines could stabilize CFTR function in most patients, at least that's what the company argues. But Sionna recently hit a roadblock.

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The company reported phase 2 clinical trial results for one of its leading candidates, SION-719. In this study, SION-719 was being investigated as a potential add-on treatment to Vertex's Trikafta. Unfortunately, SION-719 did not achieve its activity endpoint in the trial, sending Sionna Therapeutics' stock down by about 90% overnight. This episode made at least some Wall Street analysts much more bullish on Vertex's outlook.

What this means for Vertex's prospects Sionna Therapeutics isn't giving up. The company has other pipeline candidates it is still working on. However, this setback once again highlights how challenging it is to develop novel, effective therapies for CF. Sionna Therapeutics isn't the first to fail. AbbVie (ABBV -1.56%), a pharmaceutical leader, abandoned its CF goals several years ago after multiple failures. It seems Vertex Pharmaceuticals is the only one that has cracked the code. After launching its first CF product in 2012, it earned approval for several others.

The company's latest launch in this field, Alyftrek, can be taken once daily -- versus twice a day for the one before that. And Vertex's Trikafta and Alyftrek can now target about 95% of CF patients, whereas some of the therapies it had launched before targeted a much smaller subset of this population.

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In other words, Vertex Pharmaceuticals has significantly improved its CF portfolio over time, thereby expanding its addressable market and achieving better patient outcomes. The company has had setbacks in this field, too. But it has had enough successes to continue launching new drugs and post strong financial results. There are still other biotech companies developing potential competing CF medicines, but don't hold your breath for anyone to successfully challenge Vertex anytime soon.

So, the company could continue to deliver consistent financial results from this business until its most important drugs lose patent exclusivity in the late 2030s. Vertex Pharmaceuticals has also launched newer medicines in other fields. For instance, the company's Casgevy, a gene editing medicine for two rare blood diseases -- sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT) -- first earned approval in 2023. Vertex Pharmaceuticals developed this drug with CRISPR Therapeutics (CRSP -2.83%). Casgevy hasn't generated much in sales yet, partly because gene-editing therapies are expensive and complicated to administer.

However, Vertex has ramped up third-party coverage for it, and it recently earned a label expansion for Casgevy for patients as young as two. This regulatory win meaningfully expands the medicine's addressable market by allowing it to treat patients before they have had substantial health problems due to TDT and SCD. Vertex's Journavx, another relatively new launch, could also eventually be highly successful as it gives patients a non-opioid option to treat acute pain. Lastly, Vertex should earn additional brand-new approvals in the next few years, further improving its portfolio. The company's dominance in CF and diversification efforts make the stock an attractive pick.

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Vertex Pharmaceuticals (VRTX +2.39%) has dominated the market for cystic fibrosis (CF) medicines since it earned approval for its first drug in this niche in 2012. To this day, most of the company's revenue comes from its CF franchise. In the second quarter, Vertex posted $3.33 billion in revenue, representing a 12% year-over-year increase. CF-related sales were $3.2 billion. If Vertex faces stiff competition in this field, the company will lose some of its pricing power, resulting in significantly lower revenue and earnings. And many analysts fear that may happen soon, given the progress Sionna Therapeutics (SION +2.83%), a clinical-stage biotech, is making. Should investors be worried about Vertex Pharmaceuticals' prospects?

Image source: The Motley Fool.

David vs. Goliath Vertex Pharmaceuticals is worth almost $123 billion, compared to Sionna's $2.2 billion. But the smaller biotech has made it its mission to disrupt the CF drug market. Sionna focuses entirely on this area. To understand why many people are taking Sionna seriously, let's first review what causes CF. A misfolded CFTR protein -- which normally helps keep mucus in the lungs thin -- is behind this rare disease. It leads to thick, sticky mucus that clogs the airways, disrupts breathing, and traps germs and bacteria, contributing to recurrent infections.

Vertex Pharmaceuticals' products work by significantly improving the shape and function of the CFTR protein, leading to much improved symptoms. However, the underlying genetic mutation remains. That's where Sionna Therapeutics comes in. The company argues that its approach could help restore the CFTR protein's normal function, something Vertex's medicines do not achieve for most people with CF. If Sionna Therapeutics can be successful, we are looking at a large addressable market. Vertex generates over $12 billion in annual revenue, and many CF patients will switch to Sionna's drugs if they are as effective as it claims. So, investors are right to be worried about Vertex's future.

Should you forget Vertex? Before selling Vertex's shares and putting your money in Sionna Therapeutics, there are several things to remember. First, this won't be the first time a company tries to challenge Vertex's dominance in CF. The list of drugmakers that have sought to dip their toes in this market even includes pharmaceutical giants like AbbVie. But so far, they have all failed, and Vertex remains the only game in town.

That's no guarantee that Sionna will also fall short, but developing CF medicines has proved incredibly challenging. That's an important factor to remember. Second, Sionna Therapeutics' most advanced programs are still in phase 2 studies. It will be a while before the company can prove in late-stage clinical trials that its approach is as effective as it claims. And that's if it gets that far. There is always the possibility that Sionna will experience clinical setbacks along the way.

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Third, Vertex Pharmaceuticals has worked hard to diversify its portfolio. Its success has been somewhat limited so far, in fairness. The company's approved lineup now features Casgevy, a gene editing medicine for two rare blood disorders, and Journavx, a treatment for acute pain. Neither is generating meaningful revenue yet, but their sales should ramp up over the next couple of years. Further, Vertex should earn approval for other candidates that may perform better.

The company submitted an application to U.S. regulators for povetacicept, an investigational drug for IgA nephropathy (a kidney disease). It could be approved by the end of November. Vertex boasts several other pipeline candidates that could make a dent in its financial results down the line. It recently announced the $10 billion acquisition of Crinetics Pharmaceuticals (CRNX -0.05%), which will add an approved product to its portfolio and a promising pipeline candidate being developed to treat a rare genetic condition called congenital adrenal hyperplasia.

This will help diversify Vertex's business. Besides, the company is still developing newer CF drugs. What does all this mean? Sionna Therapeutics' work is a risk to Vertex's future. However, the leader in the CF market remains so for now, boasts a deep pipeline, and should have a much broader, more diversified portfolio within a few years. Vertex Pharmaceuticals remains an attractive stock to buy and hold for the long term.

A banner Tuesday for U.S. stocks was also a prosperous one for Vertex Pharmaceuticals' (VRTX +1.70%) shares. The company reported encouraging, if not spectacular, quarterly results, and investors bought into it sufficiently to push it to a nearly 2% gain that trading session.

A small dose of bullishness Vertex unveiled its second-quarter results after market close on Monday, hence the following day's mildly positive investor reaction.

Image source: Getty Images.

This wasn't due to erosion in the fundamentals. The pharmaceutical company's revenue was $3.33 billion, up 12% year over year on sales of the company's cystic fibrosis (CF) drugs, and its diversification into new disease areas.

Regarding geography, Vertex's U.S. sales rose by 11% to $2.06 billion; the company attributed this, again, to CF drugs, plus sales of the sickle-cell disease treatment Casgevy and the moderate-to-severe pain medication Journavx.

As for the bottom line, Vertex's net income, not under generally accepted accounting principles (non-GAAP, or adjusted), crept up by 3% to nearly $1.21 billion, or $4.73 per share.

The consensus analyst estimates were $3.22 billion in revenue and $4.72 per share for adjusted net income.

Vertex also raised its full-year 2026 guidance. It's now expecting revenue of $13.1 billion to $13.2 billion, up from the previous estimate of just under $13 billion to $13.1 billion. It did not provide a net income forecast.

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The Crinetics factor The big story with Vertex isn't its legacy business; it's the recent deal to acquire Crinetics Pharmaceuticals. In the second-quarter earnings release, Vertex said that its asset-to-be will give the company its fifth "pillar," i.e., therapeutic area, with Crinetics' focus on rare endocrine diseases.

"With this breadth of commercial and clinical opportunities, we look forward to bringing more medicines to more patients around the globe and in so doing, creating long-term value," Vertex quoted CEO Reshma Kewalramani as saying.

To me, the absorption of Crinetics will be the development to watch with Vertex. I think it was a smart and opportunistic deal that, while expensive at an enterprise value of $8.8 billion, could really give Vertex's business a lift if properly integrated.

Vertex Inc (NASDAQ:VERX) reported upbeat earnings for the second quarter on Monday.

The company posted quarterly earnings of 20 cents per share which beat the analyst consensus estimate of 19 cents per share. The company reported quarterly sales of $203.970 million which beat the analyst consensus estimate of $202.296 million.

Vertex said it sees third-quarter sales of $208.000 million-$211.000 million, versus market estimates of $211.696 million.

Vertex shares fell 2% to $13.13 in pre-market trading.

These analysts made changes to their price targets on Vertex following earnings announcement.

Considering buying VERX stock? Here’s what analysts think:

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Vertex, Inc. (VERX) Q2 2026 Earnings Call Transcript

For the quarter ended June 2026, Vertex (VERX - Free Report) reported revenue of $203.97 million, up 10.5% over the same period last year. EPS came in at $0.20, compared to $0.15 in the year-ago quarter.

The reported revenue represents a surprise of +0.98% over the Zacks Consensus Estimate of $202 million. With the consensus EPS estimate being $0.19, the EPS surprise was +5.26%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Vertex performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Annual Recurring Revenue: $703.4 million compared to the $699.88 million average estimate based on four analysts.Net Revenue Retention Rate: 105% versus the two-analyst average estimate of 105%.Revenues- Services: $29.22 million versus the four-analyst average estimate of $28.58 million. The reported number represents a year-over-year change of +9.4%.Revenues- Software subscriptions: $174.75 million versus the four-analyst average estimate of $173.47 million. The reported number represents a year-over-year change of +10.7%.View all Key Company Metrics for Vertex here>>>

Shares of Vertex have returned +0.5% over the past month versus the Zacks S&P 500 composite's +0.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Tax Software Specialist Vertex In Buy Zone After Base BreakoutVertex NASDAQ: VERX reported second-quarter revenue at the high end of its guidance range and raised its full-year adjusted EBITDA outlook, as the tax technology company cited cost discipline, stable customer retention and growing demand for e-invoicing solutions.

Revenue rose 10.5% year over year to $204 million, while adjusted EBITDA increased 33% to $51 million. Adjusted EBITDA margin expanded by more than four percentage points from a year earlier to 25%, according to President and Chief Executive Officer Chris Young.

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3 Small Financial Software Makers Showing Strong Chart Action “Our second quarter results demonstrate two key points,” Young said. “First, the durability of the Vertex business. Second, we are beginning to translate greater operating focus and cost discipline into meaningful earnings leverage.”

Retention Remains Stable, While Expansion Needs Improvement Vertex reported gross revenue retention of 95% and net revenue retention of 105% for the second consecutive quarter. Young said those results reflect a durable installed base and the company’s position in mission-critical tax and compliance workflows.

Vertex Should Benefit From a Renewed Focus on GlobalizationHowever, he also acknowledged that expansion within the installed base and new-logo performance “are not yet at the level we expect.” Cloud conversions have moved more slowly than anticipated this year, affecting the company’s growth outlook for cloud revenue.

Chief Financial Officer John Schwab said the slower cloud-conversion pace is primarily a timing issue rather than a loss of revenue or customers. Customers are continuing to use Vertex products in subscription or on-premise deployments, but are taking longer to move workloads to the cloud.

Young said customers are increasingly operating in mixed environments, with some Vertex products deployed in the cloud and others remaining in legacy systems. He said customer IT priorities, ERP migration timing and internal planning cycles have affected the pace of those conversions.

E-Invoicing Activity Builds Ahead of European Mandates E-invoicing was among Vertex’s strongest areas of execution during the quarter, management said. Demand has been supported by approaching mandates in France and Germany, as well as broader customer interest in managing global compliance requirements.

Young said the company recorded several six-figure enterprise e-invoicing wins during the quarter, including a mid-six-figure expansion with an existing customer related to compliance requirements in France and Finland. Vertex is aligning its country roadmap with customer demand and integrating capabilities across Vertex, Ecosio and Brinta.

Management expects e-invoicing activity to contribute to cloud growth as customers prepare for mandates. Schwab said e-invoicing adoption should begin to affect annual recurring revenue in the third quarter, with a greater revenue impact expected in the fourth quarter as transaction volumes ramp.

While mandates remain the primary catalyst for purchases, Young said some multinational customers are beginning to consider broader consolidation of e-invoicing providers as country-level requirements proliferate. Vertex expects that customers initially adopting its products for one country may expand to additional countries after successful implementations.

AI Efforts Focus on Productivity and Future Product Value Vertex said it is using artificial intelligence both to improve internal operations and to develop customer-facing tax and compliance capabilities. Young said AI-attributable revenue is not yet material, but the company is measuring progress through operational improvements, customer usage and the development of a commercial pipeline.

Active use of core AI tools across Vertex increased to 89% from 68% in January, according to management. The company said internal measures indicate a 34% improvement in engineering efficiency across most teams, while pull-request merge rates increased 30% from the January baseline.

Vertex also cited AI-driven improvements in customer delivery. AI-supported generation of e-invoicing business rules has reduced onboarding time by about 50% in applicable workflows, Young said. A country-expansion agent enabled the company to onboard roughly 3,500 rules across more than 50 formats, about 70% faster than the prior process.

The company is developing an AI-first connected tax platform and said it has seen early adoption of its Smart Categorization technology. Young said the near-term emphasis is on validating products with customers, moving appropriate capabilities into production and establishing commercial models. He expects more detail on product roadmap developments at Vertex Exchange in the fourth quarter, while characterizing 2026 primarily as a build year for AI products and 2027 as a potential commercial ramp year.

Guidance and Capital Allocation For the third quarter, Vertex forecast revenue of $208 million to $211 million and adjusted EBITDA of $55 million to $57 million. The company narrowed its full-year revenue outlook to $825 million to $830 million and raised its adjusted EBITDA guidance to $206 million to $210 million, from its prior range of $202 million to $208 million.

Vertex now expects full-year cloud revenue growth of 18%. Schwab said management incorporated the slower cloud-conversion trend, e-invoicing activity and longer sales cycles into its outlook.

Subscription software revenue increased 10.7% in the quarter, services revenue rose 9.4%, and annual recurring revenue grew 10.5%. Cloud revenue increased 17.9%, bringing year-to-date cloud revenue growth to 19.3%. Average annual revenue per direct customer rose 9.2% year over year to $142,997, while scaled customer growth was 8%.

Free cash flow was $2.7 million, affected by severance and consulting costs related to the company’s value creation plan. On a pro forma basis excluding those costs, free cash flow was $13.2 million, representing a 6.5% margin.

Vertex repurchased $26.5 million of shares during the quarter at an average price of $13.17. Since launching its $150 million repurchase program in November, the company has repurchased $56.6 million in shares, leaving $93.4 million available under the authorization.

About Vertex (NASDAQ:VERX)Vertex Energy, Inc NASDAQ: VERX is a specialty refiner and marketer of transportation fuels and petrochemical feedstocks in the United States. The company collects and processes a variety of waste petroleum products, including used motor oil and industrial lubricants, which it converts into ultra-low-sulfur diesel, asphalt, and other refined products. By leveraging proprietary re-refining technologies and strategic feedstock sourcing, Vertex Energy aims to deliver cost-effective, lower-carbon fuel solutions to wholesale and retail customers across the country.

Headquartered in Houston, Texas, Vertex operates a network of refining and blending facilities in key regions, including the Central, Northeast and Mid-Atlantic markets.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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KING OF PRUSSIA, Pa., Aug. 03, 2026 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ: VERX) (“Vertex” or the “Company”), the Decision-to-Defense™ global indirect tax and compliance company, today announced financial results for its second quarter ended June 30, 2026.

“Vertex delivered solid second-quarter results, with revenue at the high end of our guidance and adjusted EBITDA exceeding our expectations,” said Christopher Young, President and Chief Executive Officer. “The quarter demonstrated the durability of our business and the earnings leverage we can generate through greater operating focus and discipline. Customer retention remained stable, and e-invoicing momentum improved as enterprises prepare for expanding global mandates and seek more comprehensive compliance solutions.”

“We are making tangible progress in the transformation of Vertex. Our “AI-First” strategy is beginning to improve the speed and efficiency of selected engineering and customer-delivery workflows, and we have strengthened our leadership team to accelerate product innovation, operational execution, and growth. While we have more work to do, we enter the second half with a stronger operating foundation and clear opportunities to create additional value for customers and stockholders.”

Second Quarter 2026 Financial Results

Total revenues of $204.0 million, up 10.5% year-over-year.Software subscription revenues of $174.8 million, up 10.7% year-over-year.Cloud revenues of $101.7 million, up 17.9% year-over-year.Annual Recurring Revenue (“ARR”) was $703.4 million, up 10.5% year-over-year.Average Annual Revenue per direct customer (“AARPC”) was $142,997 at June 30, 2026, compared to $130,934 at June 30, 2025, and $140,464 at March 31, 2026.Net Revenue Retention (“NRR”) was 105%, compared to 108% at June 30, 2025, and 105% at March 31, 2026.Gross Revenue Retention (“GRR”) was 95%, consistent with June 30, 2025 and March 31, 2026.Loss from operations of $4.4 million, compared to $3.9 million for the same period in the prior year.Non-GAAP operating income of $44.3 million, compared to $32.2 million for the same period in the prior year.Net income (loss) of $9.0 million, compared to $(1.0) million for the same period in the prior year.Net income per basic and diluted Class A and Class B shares of $0.06, compared to net loss per basic and diluted Class A and Class B shares of $0.01 for the same period in the prior year.Non-GAAP net income of $33.3 million and Non-GAAP diluted earnings per share (“EPS”) of $0.20.Adjusted EBITDA of $51.0 million, compared to $38.4 million for the same period in the prior year. Adjusted EBITDA margin of 25.0%, compared to 20.8% for the same period in the prior year. Definitions of certain key business metrics and the non-GAAP financial measures used in this press release and reconciliations of such measures to the most directly comparable GAAP financial measures are included below under the headings “Definitions of Certain Key Business Metrics” and “Use and Reconciliation of Non-GAAP Financial Measures.”

Financial Outlook

For the third quarter of 2026, the Company currently expects:

Revenues of $208.0 million to $211.0 million; andAdjusted EBITDA of $55.0 million to $57.0 million. For the full-year 2026, the Company currently expects:

Revenues of $825.0 million to $830.0 million;
Cloud revenue growth of 18%; and 
Adjusted EBITDA of $206.0 million to $210.0 million. John Schwab, Chief Financial Officer added, “Our second quarter performance reflects solid execution against our strategic and financial objectives. The consistency of our first-half results and the strength of our operating model increased our confidence in the full year, allowing us to narrow our revenue guidance range while raising our adjusted EBITDA outlook. We continue to focus on balancing growth investments with operating discipline, which we expect to result in expanding profitability and stronger cash generation in the third and fourth quarters.”

The Company is unable to reconcile forward-looking Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact net income (loss) for these periods but would not impact Adjusted EBITDA. Such items may include stock-based compensation expense, depreciation and amortization of capitalized software costs and acquired intangible assets, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, amortization of cloud computing implementation costs, severance expenses, acquisition-related retained employee compensation, transaction costs, and other items. The unavailable information could have a significant impact on the Company’s net income (loss). The foregoing forward-looking statements reflect the Company’s expectations as of today’s date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. The Company does not intend to update its financial outlook until its next quarterly results announcement.

Important disclosures in this earnings release about and reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below under “Use and Reconciliation of Non-GAAP Financial Measures.”

Conference Call and Webcast Information

Vertex will host a conference call at 5:00 p.m. Eastern Time today, Monday, August 3, 2026, to discuss its second quarter 2026 financial results.

Those wishing to participate should register in advance for the live event at https://vertex-earnings-q2-2026.open-exchange.net/registration.

A live webcast of the event will also be available at the Company’s investor relations website at https://ir.vertexinc.com. An audio-only replay of the conference call will be available on the investor relations website for one year.

About Vertex

Vertex is the Decision-to-Defense™ global indirect tax and compliance company. Vertex helps enterprises bring control to indirect tax and compliance across the full transaction lifecycle — from tax determination and e-invoicing through reporting, filing, and audit defense — to make outcomes easier to prove and improve over time. Trusted by more than 60% of the Fortune 500, Vertex combines decades of tax expertise, deep global tax and compliance knowledge, and embedded integrations to help organizations operate globally with confidence. With headquarters in North America and offices in South America and Europe, Vertex's purpose is to ensure businesses and communities thrive through trusted transactions. 

For more information, visit www.vertexinc.com or follow us on X and LinkedIn.

Forward-Looking Statements

Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies, and our stock repurchase program. Forward-looking statements are based on Vertex management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: our ability to maintain and grow revenue from existing customers and new customers, and expand their usage of our solutions; our ability to maintain and expand our strategic relationships with third parties; our ability to adapt to technological change and successfully introduce new solutions or provide updates to existing solutions; risks related to failures in information technology or infrastructure; risks related to our reliance on government infrastructure to support our e-invoicing services; challenges in using and managing use of Artificial Intelligence in our business; incorrect or improper implementation, integration or use of our solutions; failure to attract and retain qualified technical and tax-content personnel; competitive pressures from other tax software and service providers and challenges of convincing businesses using native enterprise resource planning functions to switch to our software; our ability to accurately forecast our revenue and other future results of operations based on recent success; our ability to offer specific software deployment methods based on changes to customers’ and partners’ software systems; our ability to continue making significant investments in software development and equipment; our ability to sustain and expand revenues, maintain profitability, and to effectively manage our anticipated growth; our ability to successfully diversify our solutions by developing or introducing new solutions or acquiring and integrating additional businesses, products, services, or content; our ability to successfully integrate acquired businesses and to realize the anticipated benefits of such acquisitions; risks related to the fluctuations in our results of operations; risks related to our expanding international operations; our exposure to liability from errors, delays, fraud or system failures, which may not be covered by insurance; our ability to adapt to organizational changes and effectively implement strategic initiatives; risks related to our determinations of customers’ transaction tax and tax payments; risks related to changes in tax laws and regulations or their interpretation or enforcement; our ability to manage cybersecurity and data privacy risks; our involvement in material legal proceedings and audits; risks related to undetected errors, bugs or defects in our software; risks related to utilization of open-source software, business processes and information systems; our ability to effectively protect, maintain, and enhance our brand; changes in application, scope, interpretation or enforcement of laws and regulations; global economic weakness and uncertainties, including the economic uncertainty created by the changing legal, regulatory, or taxation landscape in the United States, and disruption in the capital and credit markets; business disruptions related to natural disasters, epidemic outbreaks, including a global endemic or pandemic, terrorist acts, political events, or other events outside of our control; our ability to comply with anti-corruption, anti-bribery, and similar laws; our ability to protect our intellectual property; changes in interest rates, security ratings and market perceptions of the industry in which we operate, or our ability to obtain capital on commercially reasonable terms or at all; our ability to maintain an effective system of disclosure controls and internal control over financial reporting, or ability to remediate any material weakness in our internal controls; risks related to our Class A common stock and controlled company status; risks related to our stock repurchase program; risks related to our indebtedness and adherence to the covenants under our debt instruments; our expectations regarding the effects of the Capped Call Transactions (as defined in our Form 10-K) and regarding actions of the Option Counterparties (as defined in our Form 10-K) and/or their respective affiliates; risks associated with our Value Creation Plan; and the other factors described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2026, as may be subsequently updated by our other SEC filings. Copies of such filings may be obtained from the Company or the SEC.

All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

Definitions of Certain Key Business Metrics

Annual Recurring Revenue (“ARR”)

We derive the vast majority of our revenues from recurring software subscriptions. We believe ARR provides us with visibility to our projected software subscription revenues in order to evaluate the health of our business. Because we recognize subscription revenues ratably, we believe investors can use ARR to measure our expansion of existing customer revenues, new customer activity, and as an indicator of future software subscription revenues. ARR is based on monthly recurring revenues (“MRR”) from software subscriptions for the most recent month at period end, multiplied by twelve. MRR is calculated by dividing the software subscription price, inclusive of discounts, by the number of subscription covered months. MRR only includes direct customers with MRR at the end of the last month of the measurement period. AARPC represents average annual revenue per direct customer and is calculated by dividing ARR by the number of software subscription direct customers at the end of the respective period.

Net Revenue Retention (“NRR”)

We believe that our NRR provides insight into our ability to retain and grow revenues from our direct customers, as well as their potential long-term value to us. We also believe it demonstrates to investors our ability to expand existing customer revenues, which is one of our key growth strategies. Our NRR refers to the ARR expansion during the 12 months of a reporting period for all direct customers who were part of our customer base at the beginning of the reporting period. Our NRR calculation takes into account any revenues lost from departing direct customers or those who have downgraded or reduced usage, as well as any revenue expansion from migrations, new licenses for additional products or contractual and usage-based price changes.

Gross Revenue Retention (“GRR”)

We believe our GRR provides insight into and demonstrates to investors our ability to retain revenues from our existing direct customers. Our GRR refers to how much of our MRR we retain each month after reduction for the effects of revenues lost from departing direct customers or those who have downgraded or reduced usage. GRR does not take into account revenue expansion from migrations, new licenses for additional products or contractual and usage-based price changes. GRR does not include revenue reductions resulting from cancellations of customer subscriptions that are replaced by new subscriptions associated with customer migrations to a newer version of the related software solution. 

Customer Count

The following table shows Vertex’s direct customers, as well as indirect small business customers sold and serviced through the Company’s one-to-many channel strategy.

CustomersQ2 2025Q3 2025Q4 2025Q1 2026Q2 2026Direct4,8624,8564,8674,8954,919Indirect504516515530540Total5,3665,3725,3825,4255,459  Use and Reconciliation of Non-GAAP Financial Measures

In addition to our results determined in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and key business metrics described above, we have calculated non-GAAP cost of revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling and marketing expense, non-GAAP general and administrative expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and free cash flow margin, which are each non-GAAP financial measures. We have provided tabular reconciliations of each of these non-GAAP financial measures to its most directly comparable GAAP financial measure.

Management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate financial performance and liquidity. Our non-GAAP financial measures are presented as supplemental disclosure as we believe they provide useful information to investors and others in understanding and evaluating our results, prospects, and liquidity period-over-period without the impact of certain items that do not directly correlate to our operating performance and that may vary significantly from period to period for reasons unrelated to our operating performance, as well as comparing our financial results to those of other companies. Our definitions of these non-GAAP financial measures may differ from similarly titled measures presented by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, and should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 24, 2026 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, to be filed with the SEC.

We calculate these non-GAAP financial measures as follows:

Non-GAAP cost of revenues, software subscriptions is determined by adding back to GAAP cost of revenues, software subscriptions, the stock-based compensation expense, and depreciation and amortization of capitalized software and acquired intangible assets included in cost of subscription revenues for the respective periods.Non-GAAP cost of revenues, services is determined by adding back to GAAP cost of revenues, services, the stock-based compensation expense included in cost of revenues, services for the respective periods.Non-GAAP gross profit is determined by adding back to GAAP gross profit the stock-based compensation expense, and depreciation and amortization of capitalized software and acquired intangible assets included in cost of subscription revenues for the respective periods.Non-GAAP gross margin is determined by dividing non-GAAP gross profit by total revenues for the respective periods.Non-GAAP research and development expense is determined by adding back to GAAP research and development expense the stock-based compensation expense and transaction costs related to acquired technology included in research and development expense for the respective periods.Non-GAAP selling and marketing expense is determined by adding back to GAAP selling and marketing expense the stock-based compensation expense and the amortization of acquired intangible assets included in selling and marketing expense for the respective periods.Non-GAAP general and administrative expense is determined by adding back to GAAP general and administrative expense the stock-based compensation expense, amortization of cloud computing implementation costs, severance expense, acquisition-related retained employee compensation, and transaction costs included in general and administrative expense for the respective periods.Non-GAAP operating income is determined by adding back to GAAP loss or income from operations the stock-based compensation expense, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP loss or income from operations for the respective periods.Non-GAAP net income is determined by adding back to GAAP net income or loss income tax benefit or expense, stock-based compensation expense, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP income or loss from operations for the respective periods, to determine non-GAAP income or loss before income taxes. Non-GAAP income or loss before income taxes is then adjusted for income taxes calculated using the respective statutory tax rates for applicable jurisdictions, which for purposes of this determination were assumed to be 25.5%.Non-GAAP net income per diluted share of Class A and Class B common stock (“Non-GAAP diluted EPS”) is determined by dividing non-GAAP net income by the weighted average shares outstanding of all classes of common stock, inclusive of the impact of dilutive common stock equivalents to purchase such common stock, including stock options, restricted stock awards, restricted stock units and employee stock purchase plan shares. Additionally, the dilutive effect of shares issuable upon conversion of the senior convertible notes is included in the calculation of Non-GAAP diluted EPS by application of the if-converted method.Adjusted EBITDA is determined by adding back to GAAP net income or loss the net interest income or expense, income tax expense or benefit, depreciation and amortization of property and equipment, depreciation and amortization of capitalized software and acquired intangible assets, amortization of cloud computing implementation costs, severance expense, acquisition contingent consideration, changes in the fair value of acquisition contingent earn-outs, acquisition-related retained employee compensation, and transaction costs included in GAAP net income or loss for the respective periods.Adjusted EBITDA margin is determined by dividing Adjusted EBITDA by total revenues for the respective periods.Free cash flow is determined by adjusting net cash provided by (used in) operating activities by purchases of property and equipment and capitalized software additions for the respective periods.Free cash flow margin is determined by dividing free cash flow by total revenues for the respective periods. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

 Vertex, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)   As of June 30, As of December 31,(In thousands, except per share data) 2026  2025   (unaudited)   Assets       Current assets:       Cash and cash equivalents $ 230,489  $ 314,009 Funds held for customers   26,497    24,286 Accounts receivable, net of allowance of $12,271 and $11,466, respectively   153,432    183,446 Prepaid expenses and other current assets   81,527    38,966 Total current assets   491,945    560,707 Property and equipment, net of accumulated depreciation   220,471    209,727 Capitalized software, net of accumulated amortization   34,262    35,480 Goodwill and other intangible assets   402,734    396,006 Deferred commissions   29,166    31,907 Deferred income tax asset   127    85 Operating lease right-of-use assets   8,366    9,678 Long-term investment   15,000    15,000 Other assets   8,076    12,245 Total assets $ 1,210,147  $ 1,270,835 Liabilities and Stockholders' Equity      Current liabilities:        Accounts payable $ 37,313  $ 37,557 Accrued expenses   34,549    43,642 Customer funds obligations   24,639    21,802 Accrued salaries and benefits   20,612    23,992 Accrued variable compensation   27,552    34,593 Deferred revenue, current   382,151    382,839 Current portion of operating lease liabilities   4,470    4,283 Current portion of finance lease liabilities   33    55 Purchase commitment and contingent consideration liabilities, current   33,100    25,900 Total current liabilities   564,419    574,663 Deferred revenue, net of current portion   4,750    5,209 Debt, net of current portion   338,605    337,477 Operating lease liabilities, net of current portion   6,776    8,903 Finance lease liabilities, net of current portion   38    54 Purchase commitment and contingent consideration liabilities, net of current portion   40,900    79,600 Deferred income tax liabilities   13,172    5,664 Deferred other liabilities   380    345 Total liabilities   969,040    1,011,915 Stockholders' equity:       Preferred shares, $0.001 par value, 30,000 shares authorized; no shares issued and outstanding   —    — Class A voting common stock, $0.001 par value, 300,000 shares authorized; 79,414 and 77,580 shares issued and outstanding, respectively   79    77 Class B voting common stock, $0.001 par value, 150,000 shares authorized; 82,156 and 82,156 shares issued and outstanding, respectively   82    82 Treasury stock, at cost, 3,888 and 504 shares, respectively   (56,696)   (10,094)Additional paid in capital   347,768    316,327 Accumulated deficit   (39,571)   (46,104)Accumulated other comprehensive loss   (10,555)   (1,368)Total stockholders' equity   241,107    258,920 Total liabilities and stockholders' equity $ 1,210,147  $ 1,270,835         Vertex, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)  Three months ended  Six months ended  June 30,  June 30, (In thousands, except per share data)2026  2025  2026  2025  (unaudited) (unaudited)Revenues:           Software subscriptions$ 174,753  $ 157,844  $ 341,899  $ 308,605 Services  29,217    26,715    58,717    53,016 Total revenues  203,970    184,559    400,616    361,621 Cost of revenues:               Software subscriptions  52,170    44,459    103,346    88,704 Services  20,500    18,900    41,101    38,723 Total cost of revenues  72,670    63,359    144,447    127,427 Gross profit  131,300    121,200    256,169    234,194 Operating expenses:               Research and development  24,805    20,582    49,355    41,468 Selling and marketing  51,899    48,454    104,534    96,609 General and administrative  51,142    43,392    105,481    88,420 Depreciation and amortization  6,720    6,187    13,162    12,067 Change in fair value of acquisition contingent earn-outs  (100)   2,300    (5,838)   (12,400)Other operating expense, net  1,277    4,149    4,524    7,408 Total operating expenses  135,743    125,064    271,218    233,572 Income (loss) from operations  (4,443)   (3,864)   (15,049)   622 Interest income, net  (344)   (1,228)   (1,301)   (2,767)Income (loss) before income taxes  (4,099)   (2,636)   (13,748)   3,389 Income tax benefit  (13,142)   (1,675)   (20,281)   (6,780)Net income (loss)  9,043    (961)   6,533    10,169 Other comprehensive (income) loss:           Foreign currency translation adjustments, net of tax  2,737    (29,734)   9,187    (44,839)Unrealized loss on investments, net of tax  —    —    —    9 Total other comprehensive income (loss), net of tax  2,737    (29,734)   9,187    (44,830)Total comprehensive income (loss)$ 6,306  $ 28,773  $ (2,654) $ 54,999             Net income (loss) per share of Class A and Class B, basic$ 0.06  $ (0.01) $ 0.04  $ 0.06 Net income (loss) per share of Class A and Class B, diluted$ 0.06  $ (0.01) $ 0.04  $ 0.06              Vertex, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)    Six months ended   June 30,(In thousands)  2026 2025   (unaudited)Cash flows from operating activities:       Net income  $6,533  $10,169 Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation and amortization   56,177   45,694 Amortization of cloud computing implementation costs   2,395   2,024 Provision for subscription cancellations and non-renewals   629   (136)Amortization of deferred financing costs   1,361   1,361 Change in fair value of contingent consideration liabilities   (5,838)  (12,200)Stock-based compensation expense   32,270   33,034 Deferred income taxes   6,051   (1,641)Non-cash operating lease costs   2,226   1,595 Other   15   (71)Changes in operating assets and liabilities, net of the effects of business acquisition(s):       Accounts receivable   29,887   22,320 Prepaid expenses and other current assets   (44,994)  (13,406)Deferred commissions   2,741   (258)Accounts payable   (288)  (5,886)Accrued expenses   (9,185)  6,446 Accrued and deferred compensation   (11,333)  (29,766)Deferred revenue   (812)  2,374 Operating lease liabilities   (2,827)  (2,057)Payments for purchase commitment and contingent consideration liabilities in excess of initial fair value   —   (200)Other   3,863   1,412 Net cash provided by operating activities   68,871   60,808 Cash flows from investing activities:       Acquisition of businesses and assets, net of cash acquired   (21,968)  — Long-term investment   —   (15,000)Property and equipment additions   (47,831)  (42,906)Capitalized software additions   (10,648)  (10,565)Purchase of investment securities, available-for-sale   —   (2,398)Proceeds from sales and maturities of investment securities, available-for-sale   —   11,607 Net cash used in investing activities   (80,447)  (59,262)Cash flows from financing activities:       Net increase (decrease) in customer funds obligations   2,838   (3,493)Repurchases of shares   (46,602)  — Proceeds from purchases of stock under ESPP   1,807   1,782 Payments for taxes related to net share settlement of stock-based awards   (7,936)  (26,105)Proceeds from exercise of stock options   441   7,687 Payments for acquisition contingent cash earn-out   (19,600)  — Payments of finance lease liabilities   (39)  (28)Net cash used in financing activities   (69,091)  (20,157)Effect of exchange rate changes on cash, cash equivalents and restricted cash   (642)  3,307 Net decrease in cash, cash equivalents and restricted cash   (81,309)  (15,304)Cash, cash equivalents and restricted cash, beginning of period   338,295   326,066 Cash, cash equivalents and restricted cash, end of period  $256,986  $310,762 Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period:       Cash and cash equivalents  $230,489  $284,386 Restricted cash—funds held for customers   26,497   26,376 Total cash, cash equivalents and restricted cash, end of period  $256,986  $310,762   Summary of Non-GAAP Financial Measures
(Unaudited)   Three months ended Six months ended   June 30, June 30, (Dollars in thousands, except per share data) 2026 2025 2026 2025 Non-GAAP cost of revenues, software subscriptions $29,205 $26,556 $58,550 $52,719 Non-GAAP cost of revenues, services $19,566 $17,876 $38,496 $36,003 Non-GAAP gross profit $155,199 $140,127 $303,570 $272,899 Non-GAAP gross margin  76.1% 75.9% 75.8% 75.5%Non-GAAP research and development expense $22,365 $18,070 $43,049 $34,604 Non-GAAP selling and marketing expense $47,080 $44,648 $93,847 $86,466 Non-GAAP general and administrative expense $34,587 $38,071 $71,631 $74,673 Non-GAAP operating income $44,295 $32,182 $81,916 $63,521 Non-GAAP net income $33,256 $24,891 $61,997 $49,385 Non-GAAP diluted EPS $0.20 $0.15 $0.37 $0.30 Adjusted EBITDA $51,015 $38,369 $95,078 $75,588 Adjusted EBITDA margin  25.0% 20.8% 23.7% 20.9%Free cash flow $2,733 $19,587 $10,392 $7,337 Free cash flow margin  1.3% 10.6% 2.6% 2.0%  Vertex, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)   Three months ended Six months ended   June 30, June 30, (Dollars in thousands) 2026 2025 2026 2025 Non-GAAP Cost of Revenues, Software Subscriptions:             Cost of revenues, software subscriptions $52,170  $44,459  $103,346  $88,704  Stock-based compensation expense  (1,083)  (1,233)  (2,828)  (3,460) Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues  (21,882)  (16,670)  (41,968)  (32,525) Non-GAAP cost of revenues, software subscriptions $29,205  $26,556  $58,550  $52,719                Non-GAAP Cost of Revenues, Services:             Cost of revenues, services $20,500  $18,900  $41,101  $38,723  Stock-based compensation expense  (934)  (1,024)  (2,605)  (2,720) Non-GAAP cost of revenues, services $19,566  $17,876  $38,496  $36,003                Non-GAAP Gross Profit:             Gross profit $131,300  $121,200  $256,169  $234,194  Stock-based compensation expense  2,017   2,257   5,433   6,180  Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues  21,882   16,670   41,968   32,525  Non-GAAP gross profit $155,199  $140,127  $303,570  $272,899                Non-GAAP Gross Margin:             Total Revenues $203,970  $184,559  $400,616  $361,621  Non-GAAP gross margin  76.1 % 75.9 % 75.8 % 75.5 %              Non-GAAP Research and Development Expense:             Research and development expense $24,805  $20,582  $49,355  $41,468  Stock-based compensation expense  (2,440)  (2,512)  (6,306)  (6,864) Non-GAAP research and development expense $22,365  $18,070  $43,049  $34,604                Non-GAAP Selling and Marketing Expense:             Selling and marketing expense $51,899  $48,454  $104,534  $96,609  Stock-based compensation expense  (4,297)  (3,235)  (9,640)  (9,041) Amortization of acquired intangible assets – selling and marketing expense  (522)  (571)  (1,047)  (1,102) Non-GAAP selling and marketing expense $47,080  $44,648  $93,847  $86,466                Non-GAAP General and Administrative Expense:             General and administrative expense $51,142  $43,392  $105,481  $88,420  Stock-based compensation expense  (5,008)  (3,986)  (10,891)  (10,949) Severance expense(1)  (2,689)  (317)  (10,097)  (774) Acquisition-related retained employee compensation(2)  (1,250)  —   (1,667)  —  Transaction costs(3)  (6,250)  —   (8,800)  —  Amortization of cloud computing implementation costs – general and administrative expense  (1,358)  (1,018)  (2,395)  (2,024) Non-GAAP general and administrative expense $34,587  $38,071  $71,631  $74,673    Vertex, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)  Three months ended Six months ended  June 30, June 30, (In thousands, except per share data)2026 2025 2026 2025 Non-GAAP Operating Income:            Income (loss) from operations$(4,443) $(3,864) $(15,049) $622  Stock-based compensation expense 13,762   11,990   32,270   33,034  Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues 21,882   16,670   41,968   32,525  Amortization of acquired intangible assets – selling and marketing expense 522   571   1,047   1,102  Amortization of cloud computing implementation costs – general and administrative expense 1,358   1,018   2,395   2,024  Severance expense(1) 2,689   317   10,097   774  Acquisition contingent consideration —   200   —   200  Change in fair value of acquisition contingent earn-outs (100)  2,300   (5,838)  (12,400) Acquisition-related retained employee compensation(2) 1,250   —   1,667   —  Transaction costs(3) 7,375   2,980   13,359   5,640  Non-GAAP operating income$44,295  $32,182  $81,916  $63,521                            Non-GAAP Net Income:            Net income (loss)$9,043  $(961) $6,533  $10,169  Income tax benefit (13,142)  (1,675)  (20,281)  (6,780) Stock-based compensation expense 13,762   11,990   32,270   33,034  Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues 21,882   16,670   41,968   32,525  Amortization of acquired intangible assets – selling and marketing expense 522   571   1,047   1,102  Amortization of cloud computing implementation costs – general and administrative expense 1,358   1,018   2,395   2,024  Severance expense(1) 2,689   317   10,097   774  Acquisition contingent consideration —   200   —   200  Change in fair value of acquisition contingent earn-outs (100)  2,300   (5,838)  (12,400) Acquisition-related retained employee compensation(2) 1,250   —   1,667   —  Transaction costs(3) 7,375   2,980   13,359   5,640  Non-GAAP income before income taxes 44,639   33,410   83,217   66,288  Income tax adjustment at statutory rate(4) (11,383)  (8,519)  (21,220)  (16,903) Non-GAAP net income$33,256  $24,891  $61,997  $49,385               Non-GAAP Diluted EPS:            Non-GAAP net income$33,256  $24,891  $61,997  $49,385  Interest expense (net of tax), convertible senior notes(5) 903   903   1,806   1,806  Non-GAAP net income used in dilutive per share computation$34,159  $25,794  $63,803  $51,191               Weighted average Class A and B common stock, diluted 161,392   162,589   161,337   162,656  Dilutive effect of convertible senior notes(5) 9,498   9,498   9,498   9,498  Total average Class A and B shares used in dilutive per share computation 170,890   172,087   170,835   172,154  Non-GAAP diluted EPS$0.20  $0.15  $0.37  $0.30  (1)  The three and six months ended June 30, 2026 periods include $1,713 and $7,883, respectively, in severance costs related to the Value Creation Plan. (2)  The acquisition-related compensation expenses recorded for the three and six months ended June 30, 2026 are related to the additional cash consideration payments of $10,000 to the sellers (the “Additional Cash Consideration”) in connection with the acquisition of Finta Inc. and its subsidiaries (“Brinta”). (3)  The three and six months ended June 30, 2026 periods include $6,250 and $8,800, respectively, in costs incurred to support the execution of our Value Creation Plan, recorded in general and administrative expense. Amounts also include legal expenses associated with pending litigation related to claims the Company has made against a competitor. (4)  Non-GAAP income before income taxes is adjusted for income taxes using the respective statutory tax rates for applicable jurisdictions, which for purposes of this determination were assumed to be 25.5%. (5)  We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. Interest expense and additional dilutive shares related to the notes are added back to the calculation when their impact is dilutive. In periods when the impact is anti-dilutive, there is no add-back of interest expense or additional dilutive shares related to the notes.   Vertex, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
(Unaudited)  Three months ended Six months ended  June 30, June 30, (Dollars in thousands)2026 2025 2026 2025 Adjusted EBITDA:            Net income (loss)$9,043  $(961) $6,533  $10,169  Interest income, net (344)  (1,228)  (1,301)  (2,767) Income tax benefit (13,142)  (1,675)  (20,281)  (6,780) Depreciation and amortization – property and equipment 6,720   6,187   13,162   12,067  Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues 21,882   16,670   41,968   32,525  Amortization of acquired intangible assets – selling and marketing expense 522   571   1,047   1,102  Amortization of cloud computing implementation costs – general and administrative expense 1,358   1,018   2,395   2,024  Stock-based compensation expense 13,762   11,990   32,270   33,034  Severance expense(1) 2,689   317   10,097   774  Acquisition contingent consideration —   200   —   200  Change in fair value of acquisition contingent earn-outs (100)  2,300   (5,838)  (12,400) Acquisition-related retained employee compensation(2) 1,250   —   1,667   —  Transaction costs(3) 7,375   2,980   13,359   5,640  Adjusted EBITDA$51,015  $38,369  $95,078  $75,588               Adjusted EBITDA Margin:            Total revenues$203,970  $184,559  $400,616  $361,621  Adjusted EBITDA margin 25.0 % 20.8 % 23.7 % 20.9 %(1)The three and six months ended June 30, 2026 periods include $1,713 and $7,883, respectively, in severance costs related to the Value Creation Plan.(2)The acquisition-related compensation expenses recorded for the three and six months ended June 30, 2026 are related to the Additional Cash Consideration obligation associated with the acquisition of Brinta.(3)The three and six months ended June 30, 2026 periods include $6,250 and $8,800, respectively, in costs incurred to support the execution of our Value Creation Plan. Amounts also include legal expenses associated with pending litigation related to claims the Company has made against a competitor.   Three months ended Six months ended   June 30, June 30, (Dollars in thousands) 2026 2025 2026 2025 Free Cash Flow:             Cash provided by operating activities $30,896  $46,003  $68,871  $60,808  Property and equipment additions  (23,171)  (21,512)  (47,831)  (42,906) Capitalized software additions  (4,992)  (4,904)  (10,648)  (10,565) Free cash flow $2,733  $19,587  $10,392  $7,337                Free Cash Flow Margin:             Total revenues $203,970  $184,559  $400,616  $361,621  Free cash flow margin  1.3 % 10.6 % 2.6 % 2.0 % Investor Relations Contact:
Joe Crivelli
Vertex, Inc.
[email protected]

Media Contact:
Simone Sonnier
Vertex, Inc.
[email protected]

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VANCOUVER, British Columbia--(BUSINESS WIRE)---- $ABCL--AbCellera Announces Collaboration with Vertex to Discover Multispecific T-Cell Engagers for Autoimmune Diseases and Other Conditions.

Vertex Pharmaceuticals (VRTX 0.07%) 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.

Image source: The Motley Fool.

A new acquisition could move the needle On July 6, Vertex Pharmaceuticals announced it was acquiring Crinetics Pharmaceuticals (CRNX 0.06%), a biotech focused on developing medicines for endocrine diseases, for $10 billion in cash. The buyout will grant Vertex Pharmaceuticals access to Palsonify, a medicine approved to treat acromegaly, a rare condition caused by a benign pituitary tumor that produces too much growth hormone, causing abnormal growth of bones, organs, and other tissues.

The U.S. Food and Drug Administration approved Palsonify in 2025. Beyond this marketed product, Crinetics Pharmaceuticals boasts several interesting pipeline candidates that Vertex will inherit. For instance, Crinetics is developing atumelnant, an investigational therapy for congenital adrenal hyperplasia (CAH), a group of rare genetic disorders that can be dangerous, even life-threatening, for newborns in severe cases.

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Vertex Pharmaceuticals believes that Crinetics Pharmaceuticals' Palsonify and phase 3 assets have a combined peak revenue potential of about $5 billion. That's a meaningful amount for a company that generated $12 billion in revenue last year. That's why this acquisition -- and the clinical and commercial progress Vertex could make thanks to it -- is worth keeping an eye on for investors.

Vertex Pharmaceuticals' strong outlook Vertex Pharmaceuticals has already made good progress in diversifying its lineup and pipeline. The company's approved portfolio includes Journavx, a medicine for acute pain, and Casgevy, a gene editing therapy for two rare blood-related disorders. It could also get regulatory approval for povetacicept, an investigational medicine for IgA nephropathy, by the end of November. It boasts several other pipeline programs as well and should earn additional approvals and label expansions over the next few years.

In the meantime, Vertex Pharmaceuticals' core business should continue driving strong financial results. In other words, the company's long-term prospects look increasingly strong, as it rides the success of its CF business and launches new products. The bottom line: Vertex is a top biotech stock to buy.

When a company acquires another business, there's often going to be a premium involved, especially if it's in good shape or has some promising assets in its portfolio. But normally, you don't see a company pay double what its current valuation is.

That's what Vertex Pharmaceuticals (VRTX 1.00%) recently did when it announced a $10 billion purchase of Crinetics Pharmaceuticals (CRNX +0.10%), a company that specializes in endocrine disorders and diseases. Vertex agreed to pay a 102% premium for the stock, slightly more than double its valuation. While it was great news for Crinetics investors, it didn't sit all that well with Vertex investors, and the stock proceeded to fall sharply on the news.

Why did Vertex pay so much for the healthcare company?

Image source: Getty Images.

Management was "floored" by this one drug Vertex expects the assets it gets from Crinetics to add as much as $5 billion in revenue. And what really stood out to management was a particularly attractive drug: atumelnant. The drug isn't approved yet, but Vertex executives were thrilled with its progress in clinical trials as a treatment for congenital adrenal hyperplasia (CAH).

Atumelnant is a once-daily pill that has been well-tolerated in trials without serious adverse events and which helped bring patients' hormone levels back down to near normal levels. It has the potential to be a leading therapy for CAH, assuming it obtains approval.

"When we saw that data, we were floored. That is very, very important to this field."

"We are also excited by the significant potential of atumelnant to transform the treatment landscape for CAH, setting a new standard of care where patients do not have to choose between managing their excess adrenal androgens and enduring the side effects of high-dose steroids."

- Dr. Reshma Kewalramani, Vertex CEO

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Vertex remains a top growth stock to own The high price tag that Vertex paid for Crinetics stock may have alarmed investors, as shares of Vertex fell sharply on the news. Prior to the announcement on July 6, the stock was trading near its 52-week high at around $530, but would end up falling to just over $485 as of the end of last week. While it's not a huge sell-off, it does indicate that investors had a bit of initial apprehension when it was announced.

If, however, management is correct in assessing the value of the drugs it acquired and they do generate significant revenue and profit growth for Vertex, buying the stock today could prove to be a good move in the long run. Paying top dollar for quality assets can be necessary, and the good news here is that Vertex didn't have to take on debt to do the deal and is funding it via cash.

Overall, it looks like a good low-risk move for Vertex to make, reinforcing why it's an excellent growth stock to hold for the long run, as it's always looking for ways to expand.

Vertex’s Crinetics Deal Balances Growth with Integration RiskVertex Pharmaceuticals NASDAQ: VRTX said it has entered into a definitive agreement to acquire Crinetics Pharmaceuticals for $85 per share in cash, a transaction Vertex executives described as a strategic expansion into specialty endocrinology.

On a conference call announcing the deal, Vertex CEO and President Dr. Reshma Kewalramani said the transaction has a total equity value of about $10 billion, or $8.8 billion net of estimated cash acquired. She said Crinetics brings two lead endocrine assets that Vertex believes could generate more than $5 billion in combined peak annual sales: PALSONIFY, an approved oral therapy for acromegaly, and atumelnant, an investigational therapy in pivotal development for congenital adrenal hyperplasia, or CAH.

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CRISPR Therapeutics Gains After Earnings as Pipeline Hope Grows“Crinetics is an excellent strategic fit for Vertex,” Kewalramani said, citing the company’s focus on serious diseases, specialty markets, well-understood biology and potentially best-in-class medicines.

PALSONIFY Seen as Blockbuster Opportunity Kewalramani said PALSONIFY is the first and only once-daily oral therapy for adults with acromegaly, a rare hormonal disorder caused by excess growth hormone. She said the drug was launched in the U.S. in October 2025 and was more recently approved by the European Medicines Agency.

How Royalty Pharma Prints Cash Without Biotech's Biggest RisksVertex executives emphasized that many patients with acromegaly continue to need lifelong medical therapy after surgery. Kewalramani said current injectable somatostatin receptor ligands can be inconvenient, painful and associated with low patient compliance.

In Phase 3 data discussed on the call, Kewalramani said 83% of patients switching from injectable therapies maintained IGF-1 levels within the normal range on PALSONIFY, compared with 4% on placebo. In a separate study that included treatment-naive patients and others who had stopped prior treatment, 56% of PALSONIFY-treated patients achieved IGF-1 normalization, compared with 5% on placebo.

Duncan McKechnie, Vertex’s executive vice president and chief commercial officer, said PALSONIFY generated $10.3 million in net product revenue in the first quarter of 2026, based on data previously disclosed by Crinetics. He said the product achieved a 40% to 50% share of new-to-brand prescriptions in its second quarter of launch, with uptake across pituitary centers and community endocrinologists.

McKechnie said payer coverage currently stands at 60% through formal coverage or medical exceptions, and Crinetics has indicated it is on track to reach 75% coverage by the third quarter of 2026.

Atumelnant Positioned for CAH and Cushing’s Syndrome Vertex also highlighted atumelnant, a once-daily oral ACTH receptor antagonist currently enrolling patients in a Phase 3 CAH study. Kewalramani said classic CAH affects about 17,000 people in the U.S. and more than 15,000 outside the U.S.

She said patients with CAH require lifelong glucocorticoid therapy, often at high doses, to manage androgen excess. That creates what Vertex described as a dual burden: androgen-related complications and the long-term consequences of supraphysiologic glucocorticoid exposure.

McKechnie said Phase 2 data from the TouCAHn study showed a 67% reduction from baseline in mean A4 androgen levels, even as glucocorticoid dosing was tapered. He said 87% of patients achieved physiologic glucocorticoid dosing while A4 reduction was maintained.

“We believe atumelnant achieves the previously unattainable holy grail of CAH management,” McKechnie said, describing the ability to normalize androgen levels while allowing physiologic glucocorticoid dosing.

Kewalramani also pointed to potential use in ACTH-dependent Cushing’s syndrome, where atumelnant is in Phase 2 development. She said early study data showed rapid lowering of urine-free cortisol, including normalization in five of six patients in an 80 mg cohort while on physiologic glucocorticoid doses.

Financial Terms and Closing Timeline Charles Wagner, Vertex’s executive vice president and chief operating and financial officer, said Vertex expects to finance the acquisition with cash on hand and debt supported by $4.5 billion of fully committed bridge financing.

The transaction is subject to customary closing conditions, including approval by Crinetics shareholders and regulatory approvals. Vertex currently expects the deal to close in the third quarter of 2026.

Wagner said the acquisition is expected to have a modest impact on 2026 revenue and non-GAAP operating expenses, assuming the anticipated closing timeline. Vertex plans to provide updated 2026 guidance at closing. He added that the transaction is expected to be accretive to non-GAAP operating income in 2029.

Wagner said endocrinology will become Vertex’s fifth disease-area pillar, alongside cystic fibrosis, heme, acute pain and renal disease. He cited Vertex’s current marketed and pipeline products, including ALYFTREK, TRIKAFTA, CASGEVY, JOURNAVX and povetacicept, while saying Crinetics adds an on-market endocrine product and a pivotal-stage program.

Executives Address Deal Premium and Development Risks During the question-and-answer portion of the call, analysts asked about the transaction price, the peak sales outlook and safety considerations for atumelnant.

In response to a question from Michael Yee of UBS about the acquisition premium, Wagner said Vertex sees “a lot of intrinsic value” in Crinetics, pointing to the potential for best-in-class products and more than $5 billion in peak sales. He said the valuation was roughly 2 times peak sales, which he described as in line with other deals involving high-quality commercial or near-commercial assets.

Asked about liver safety for atumelnant, Kewalramani said Vertex reviewed the available data across CAH and ACTH-dependent Cushing’s syndrome. She said the company saw a handful of minor liver function test elevations, with no cases involving both liver function tests and bilirubin, and that most resolved without intervention while patients continued therapy.

Vertex executives said they do not expect the acquisition to change the company’s capital allocation strategy, which remains focused on internal and external innovation. Kewalramani said the timing of the deal reflects the availability of the company, the maturity of the data and Vertex’s view that it can support PALSONIFY’s global launch and prepare for atumelnant’s potential commercialization.

About Vertex Pharmaceuticals NASDAQ: VRTXVertex Pharmaceuticals Inc is a Boston-based biotechnology company focused on the discovery, development and commercialization of therapies for serious diseases. Founded in 1989, Vertex built its reputation on research-driven drug development and is best known for its work in cystic fibrosis (CF), where its portfolio of small-molecule CFTR modulators transformed standards of care for many people with the disease. The company operates research and development, manufacturing and commercial organizations and serves patients and healthcare systems in multiple international markets.

Vertex's marketed products center on CFTR modulators that target the underlying cause of cystic fibrosis rather than just treating symptoms.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Should You Invest $1,000 in Vertex Pharmaceuticals Right Now?Before you consider Vertex Pharmaceuticals, you'll want to hear this.

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On Monday, Crinetics and Vertex entered into a definitive agreement under which Vertex will acquire Crinetics for $85 per share in cash, representing a total equity value of approximately $10 billion.

Don’t forget to check out our premarket coverage here

Liz Young Thomas, SoFi’s head of investment strategy, recommended Vanguard Real Estate Index Fund ETF Shares (NYSE:VNQ).

Joseph M. Terranova, senior managing director for Virtus Investment Partners, picked NVIDIA Corporation (NASDAQ:NVDA).

Nvidia shares gained Wednesday following reports suggesting China will let the top AI firms buy a limited amount of Nvidia H200 chips.

Price Action Vertex shares fell 4.6% to close at $498.43 on Wednesday. Roundhill Memory ETF rose 2.4% during the session. Nvidia shares gained 3.7% to close at $204.12 on Wednesday. Vanguard Real Estate Index Fund ETF Shares fell 1.6% during the session. Photo via Shutterstock

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In the latest big-ticket deal in the pharmaceutical industry, Vertex Pharmaceuticals (VRTX 1.31%) and Crinetics Pharmaceuticals (CRNX +98.74%) announced in a joint press release that Vertex is acquiring Crinetics. This won’t come cheap, to put it mildly; it’s a premium-priced deal that will cost billions of dollars. Here’s a look at whether that’s likely to be capital well spent.

Quite a pricey premiumVertex is paying $85 per share to acquire Crinetics, to be paid entirely in cash. This values the latter pharmaceutical company at approximately $10 billion, or roughly $8.8 billion when accounting for the cash and short-term investments Crinetics has on hand. As for the per-share price, $85 is slightly more than double the level at which Crinetics closed on Monday.

Image source: Getty Images.

The boards of directors at both companies have unanimously approved the deal, which is expected to close in the third calendar quarter of this year.

Vertex is buying a company that recently earned its first Food and Drug Administration (FDA) approval. This was for its Palsonify, a treatment for the rare endocrine disorder acromegaly (characterized by excessive growth hormone production). This medication was greenlit by the regulator last September for adult use, and since it’s currently the only approved acromegaly treatment administered as a once-daily pill (as opposed to a monthly injection), it has quite a strong position in the market — in its first full quarter following approval, the drug brought in $10.7 million in revenue.

Palsonify was also approved for the same indication by the 27-country European Union’s European Commission at the end of this past April.

Crinetics also has a pipeline distinguished by one standout drug candidate in particular. This is atumelnant, which targets the most severe form of congenital adrenal hyperplasia (CAH), an affliction of the adrenal glands. While this disorder is rarer than acromegaly, it has a significant unmet medical need — meaning that if it comes to market, it’ll have excellent sales potential from the start. That might not be too far in the future, as the drug is currently in late Phase 3 clinical development.

Other pipeline drugs in Crinetics lab target afflictions such as hyperparathyroidism, Graves’ disease, diabetes, and obesity, with the latter a durably hot segment of the pharmaceutical market.

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Immediate return on investmentIn the press release, the two companies quoted Vertex CEO Reshma Kewalramani as saying that his company “can build on the strong momentum of the Palsonify launch by applying our experience in commercializing medicines for rare genetic diseases.”

He added that “we are also excited by the significant potential of atumelnant to transform the treatment landscape for CAH.”

His company clearly believes owning Crinetics will produce immediate results thanks to the latter company’s already-popular commercialized drug. It described atumelnant as a product with multi-billion dollar potential if it can also earn approval for another affliction, Cushing’s syndrome (a hormonal disorder that arises from over-exposure to cortisol). So we can assume management feels that $10 billion is a reasonable price for the investigational drug alone.

Together, Palsonify and the potentially dual-indication atumelnant could bring in $5 billion in annual sales for the Crinetics-owning Vertex.

Future blockbusters?In short, Vertex could eventually have in its portfolio not one but two blockbuster drugs (i.e., those that generate at least $1 billion in annual sales). It’s got plenty of cash in its coffers, with over $5.5 billion in greenbacks as of the end of March. It’s also secured a $4.5 billion bridge loan from lenders Bank of America (BAC 0.07%) and Morgan Stanley (MS 0.03%).

I think this is a bold and impressive move by Vertex, which gives the company, at the very least, an already-strong commercialized product with Palsonify, despite the fairly limited size of the product’s addressable market. So far, it looks like atumelnant has similar potential and could even be the company’s No. 1 if it’s ultimately approved for both desired indications. This deal is definitely worth it, in my view, despite the gasp-inducing price tag and monster premium to Crinetics’ share price.

BOSTON--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) will report its second quarter 2026 financial results on Monday, August 3, 2026, after the financial markets close. The company will host a conference call and webcast at 4:30 p.m. ET. To access the call, please dial (833) 630-2124 (U.S.) or +1 (412) 317-0651 (International) and reference the “Vertex Pharmaceuticals Second Quarter 2026 Earnings Call.”

The conference call will be webcast live and a link to the webcast can be accessed through Vertex's website at www.vrtx.com in the "Investors" section. To ensure a timely connection, it is recommended that participants register at least 15 minutes prior to the scheduled webcast. An archived webcast will be available on the company's website.

About Vertex

Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases and conditions. The company has approved therapies for cystic fibrosis, sickle cell disease, transfusion-dependent beta thalassemia and acute pain, and it continues to advance clinical and research programs in these areas. Vertex also has a robust clinical pipeline of investigational therapies across a range of modalities in other serious diseases where it has deep insight into causal human biology, including IgA nephropathy, neuropathic pain, APOL1-mediated kidney disease, primary membranous nephropathy, autosomal dominant polycystic kidney disease, type 1 diabetes, generalized myasthenia gravis, and myotonic dystrophy type 1.

Vertex was founded in 1989 and has its global headquarters in Boston, with international headquarters in London. Additionally, the company has research and development sites and commercial offices in North America, Europe, Australia, Latin America and the Middle East. Vertex is consistently recognized as one of the industry's top places to work, including 16 consecutive years on Science magazine's Top Employers list and one of Fortune’s 100 Best Companies to Work For. For company updates and to learn more about Vertex's history of innovation, visit www.vrtx.com or follow us on LinkedIn, Facebook, Instagram, YouTube and X.

(VRTX-WEB)

Source: Vertex Pharmaceuticals Incorporated

Vertex expects to finance the acquisition using a combination of cash on hand and debt, supported by $4.5 billion of fully committed bridge financing.

Vertex’s cash, cash equivalents, and total marketable securities as of March 31, 2026, were $13.0 billion.

The transaction was approved by both the Vertex and Crinetics Boards of Directors and is anticipated to close in the third quarter of 2026.

Palsonify And Atumelnant Expand Vertex’s Rare Disease Portfolio"Crinetics is an excellent strategic fit for Vertex," said Reshma Kewalramani, CEO and President of Vertex.

Crinetics’ marketed medicine, Palsonify (paltusotine), received FDA approval in September 2025.

The European Medicines Agency recently approved Palsonify.

It is the first and only once-daily oral therapy for adults with acromegaly, a rare and debilitating condition caused by a pituitary tumor that secretes excess growth hormone, which affects an estimated 20,000 diagnosed people in the U.S.

Crinetics’ most advanced pipeline candidate, atumelnant, is a once-daily oral adrenocorticotropic hormone (ACTH) receptor antagonist currently in Phase 3 development for congenital adrenal hyperplasia (CAH).

Classic CAH, the most severe form of the disease, with 17,000 addressable patients in the U.S., is a rare, chronic genetic condition affecting the adrenal glands.

In Phase 2 studies, patients taking atumelnant were able to achieve near normalization of excess androgen levels on physiologic replacement doses of glucocorticoids.

Vertex Expects Revenue And Profit Growth From AcquisitionThe transaction is expected to contribute immediately to Vertex’s revenue growth via the ongoing launch of Palsonify, which has blockbuster potential in acromegaly.

Longer term, atumelnant has the potential to be a multi-billion-dollar opportunity in CAH, with additional upside from its potential in Cushing’s syndrome.

At peak, these assets have the potential to deliver more than $5 billion in combined annual revenue, which will further Vertex’s goal of delivering sustained double-digit revenue growth, in addition to operating margins.

The transaction is expected to become accretive to adjusted operating income in 2029.

Analyst Sees UpsideWilliam Blair on Monday wrote, "…it is the first time we have heard of a multi-billion dollar sales potential for a CAH product."

Analyst Myles Minter further added that the deal is on the higher side on a stock price premium basis, but views this as reasonable if the peak sales number can be achieved.

William Blair also wrote, "Based on management commentary, we believe significantly more of the >$5 billion peak sales potential is weighted toward the atumelnant opportunity, which carries more risk given the late-clinical-stage nature of the ACTH receptor antagonist."

Price Action: Crinetics Pharmaceuticals shares were up 98.88% at $83.59, and Vertex Pharmaceuticals shares were down 0.30% at $528.00 during premarket trading on Tuesday, according to Benzinga Pro data.

Photo: courtesy of Vertex

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The acquisition would add to Vertex's pipeline and potentially grow its annual revenue by $5 billion with the addition of Crinetics-developed drugs Palsonify and Atumelnant, the company said.

BOSTON & SAN DIEGO--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) and Crinetics Pharmaceuticals, Inc. (Nasdaq: CRNX), a global pharmaceutical company focused on the discovery, development and commercialization of novel therapeutics for endocrine diseases, today announced that the companies have entered into a definitive agreement under which Vertex will acquire Crinetics for $85.00 per share in cash, for a total equity value of approximately $10.0 billion, or approximately.

Key Takeaways Vertex gained FDA approval to expand Casgevy to patients aged two and older with SCD or TDT.VRTX's Casgevy is the first genetic therapy approved for children as young as two with both disorders.VRTX said label expansion applications remain under review in the United Kingdom and Saudi Arabia. Vertex Pharmaceuticals (VRTX - Free Report) announced that the FDA has approved its one-shot gene therapy, Casgevy (exagamglogene autotemcel), for the treatment of individuals aged two years and older with either sickle cell disease (SCD) with recurrent vaso-occlusive crises (VOCs) or transfusion-dependent beta thalassemia (TDT).

Following the latest nod, Casgevy became the first and only genetic therapy to be approved for treating children as young as two years for both severe SCD and TDT, both inherited blood disorders.

Regulatory filings seeking approval for the label expansion of Casgevy are currently under review in the United Kingdom and the Kingdom of Saudi Arabia for the given indication.

Casgevy was previously approved for treating SCD and TDT in patients aged 12 years and older.

VRTX’s Price PerformanceYear to date, shares of Vertex have rallied 9.8% compared with the industry’s increase of 7%.

Image Source: Zacks Investment Research

More on VRTX’s Ongoing Activities With CasgevyWe remind investors that Vertex leads the global development and commercialization of Casgevy under the terms of the 2021 agreement, with support from CRISPR Therapeutics (CRSP - Free Report) .

Per the collaboration agreement, Vertex splits the program costs and profits in a 60:40 ratio with CRISPR Therapeutics.

In the first quarter of 2026, Casgevy’s sales were $42.9 million, down from $54.3 million recorded in the fourth quarter of 2025 due to quarter-to-quarter variability in Casgevy infusions.

Nonetheless, Casgevy’s launch metrics look positive with growing cell collections and product infusions. Vertex is also making rapid progress in the drug’s access and reimbursement.

In May 2026, Vertex signed a reimbursement agreement with Germany’s GKV-Spitzenverband for Casgevy, ensuring sustainable patient access for eligible individuals aged 12 years and older with severe SCD or TDT.

In 2026, Vertex expects continued quarter-to-quarter variability in Casgevy infusions, which the company expects will smooth out in 2027 and beyond. If commercialization of Casgevy ramps up successfully over the next few years, Vertex Pharmaceuticals believes the therapy has multibillion-dollar commercial potential.

VRTX Zacks Rank & Stocks to ConsiderVertex currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Immunocore (IMCR - Free Report) and Liquidia Corporation (LQDA - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Immunocore’s 2026 bottom line have improved from a loss of 88 cents per share to earnings of 6 cents. Over the same period, EPS estimates for 2027 have risen from 24 cents to 87 cents. IMCR stock has lost 8.8% year to date.

Immunocore’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 46.66%.

Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $1.50 to $3.02, while estimates for 2027 have increased from $2.91 to $4.92 during the same time. LQDA shares have surged 130% year to date.

Liquidia’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 54.40%.

BOSTON--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) announced today that the U.S. Food and Drug Administration (FDA) has approved expanded use of CASGEVY® (exagamglogene autotemcel) for the treatment of people ages 2 years and older with either sickle cell disease (SCD) with recurrent vaso-occlusive crises (VOCs) or transfusion-dependent beta thalassemia (TDT). CASGEVY is the first approved genetic therapy indicated for children as young as 2 years for both SCD and TDT.