Vertex’s $950 Million Bet That Could Pay Off Big-Time for Investors

If you’re familiar with Vertex Pharmaceuticals (NASDAQ:VRTX), probably the first thing that comes to mind when you think about the big biotech is cystic fibrosis (CF). That’s understandable, considering Vertex’s tremendous success so far has been due to its CF franchise.

However, Vertex is also working to expand its horizons well beyond CF. The company’s pipeline programs are targeting several other rare genetic diseases as well as pain. Perhaps the most intriguing area of focus now, though, is Vertex’s type 1 diabetes program. Vertex has made a $950 million bet that it can actually cure type 1 diabetes. And that’s a bet that could pay off big-time for investors.

The path to a cure

Vertex announced in September 2019 that it was acquiring privately held Semma Therapeutics for $950 million in cash. Semma was cofounded in 2014 by Harvard University professor Douglas Melton, who had conducted research that demonstrated the potential for pluripotent stem cells to be converted into pancreatic beta cells that produce insulin.

This approach seemed to be ideal for type 1 diabetes (T1D). With T1D, the body’s immune system attacks pancreatic beta cells. As a result, the body doesn’t produce enough insulin, a hormone that regulates blood sugar levels.

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