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Jul 24 2007, 4:01 PM EST

Vertex Pharmaceuticals Reports Second Quarter 2007 Financial Results and Provides Development Pipeline Update

News source: Business Wire

Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated financial results for the quarter ended June 30, 2007, and the Company provided a pipeline update.

"Vertex achieved its major development pipeline milestones in the first half of 2007," stated Joshua Boger, Ph.D., President and Chief Executive Officer of Vertex Pharmaceuticals. "In particular, with telaprevir, our investigational hepatitis C protease inhibitor, we are continuing to receive informative data from the global Phase 2b PROVE clinical development program. We also advanced our manufacturing activities for telaprevir by expanding our manufacturing capacity and have now begun production of validation batches. In addition, we are also conducting Phase 2 clinical trials with additional investigational drug candidates, including VX-770 for cystic fibrosis, VX-702 for rheumatoid arthritis, and MK-0457 (VX-680) through our collaborator Merck for treatment-resistant leukemias."

"The transition to Phase 3 development for telaprevir is Vertex's top priority," continued Dr. Boger. "In the near-term, we are focused on evaluating the data generated to date in the PROVE clinical program with regulatory authorities. Subsequently, we are targeting further interactions and discussions that will enable the initiation of Phase 3."

Second Quarter Results

For the quarter ended June 30, 2007, the Company's net loss was $117.8 million, or $0.91 per share. The net loss for the quarter ended June 30, 2006 was $77.7 million, or $0.72 per share. The increase in the Company's 2007 net loss was principally driven by an increase in development investment as Vertex advances its product candidates.

The non-GAAP loss, before certain charges, for the quarter ended June 30, 2007 was $95.4 million, or $0.74 per share, compared to the non-GAAP loss, before certain charges, of $65.6 million, or $0.60 per share, for the quarter ended June 30, 2006.

Total revenues for the quarter ended June 30, 2007 were $38.2 million, compared to $29.7 million for the second quarter of 2006. The increase is primarily due to revenue recognized from development activities in collaboration with Janssen Pharmaceutica.

Research and development (R&D) expenses for the quarter ended June 30, 2007 were $136.2 million, including $18.8 million of commercial supply investment, compared to $91.3 million in R&D expenses for the second quarter of 2006. The increase primarily relates to development investment to support the global Phase 2b clinical development program for telaprevir, as well as the investment in building the commercial supply chain for telaprevir.

Sales, general and administrative (SG&A) expenses for the quarter ended June 30, 2007 were $23.3 million compared to $14.4 million for the second quarter of 2006. This increase reflects building of infrastructure, including an increase in the number of employees to support the advancement of the business.

Other income, net, for the quarter ended June 30, 2007 was $7.9 million, compared to $1.6 million for the second quarter of 2006. This increase principally resulted from increased investment balances and the Company's reduction of outstanding debt in 2006 and in the first quarter of 2007.

At June 30, 2007, Vertex had approximately $617.2 million in cash, cash equivalents and marketable securities. Vertex ended the second quarter of 2007 with $42.1 million in principal amount of convertible debt due September 2007.

Recent Achievements and 2007 Objectives

-- Relapse rate data from PROVE 1

 -- Vertex announced today that it received preliminary data from a
       planned interim analysis of arm C of the PROVE 1 trial, which
       evaluated treatment-naive genotype 1 HCV patients treated with
       telaprev




	
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