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Vertex Reports First Quarter 2013 Financial Results and Reviews Recent Progress in Development Programs for Cystic Fibrosis and Hepatitis C
-First quarter 2013 total revenues of
-Cystic fibrosis: Enrollment ongoing in Phase 3 program for VX-809 in combination with ivacaftor for people with two copies of the F508del mutation-
-Hepatitis C: multiple all-oral combination studies ongoing with the nucleotide analogue HCV polymerase inhibitor VX-135-
Vertex reported total first quarter 2013 revenues of
"During the first quarter of the year, we have made significant advances
across our business as we continue to execute on our strategy of
developing new medicines focused on serious diseases in specialty
Development Program Updates
Vertex's strategy in cystic fibrosis (CF) is to provide benefit to as many CF patients as possible, and to maximize the benefit for these patients, with our approved and investigational medicines.
Continued Progression of Label-Expansion Studies for Ivacaftor Monotherapy
- Three Phase 3 label-expansion studies are ongoing for ivacaftor monotherapy, including a study in people with CF ages 6 and older who have at least one copy of the R117H mutation, a study in people with CF ages 6 and older who have at least one non-G551D CFTR gating mutation and a study in children with CF ages 2 to 5 who have a gating mutation. Enrollment of the study of gating mutations is complete, with the first data expected in the second half of 2013. Enrollment is ongoing in the study of children ages 2 to 5 and in the study in people with the R117H mutation. Enrollment is also ongoing in a Phase 2 proof-of-concept study evaluating ivacaftor in people with CF who have clinical evidence of residual CFTR function. Vertex believes that ivacaftor monotherapy may be able to treat between 10% and 15% of the estimated 70,000 CF patients worldwide, pending results of clinical studies.
Initiation of Phase 3 Studies for VX-809 in Combination with Ivacaftor
Vertex recently initiated a Phase 3 program for VX-809 in combination
with ivacaftor that consists of two 24-week Phase 3 studies in people
ages 12 and older with two copies of the most common mutation in the
cystic fibrosis transmembrane conductance regulator (CFTR)
gene, known as F508del. Enrollment in the Phase 3 program is underway.
Worldwide, nearly half of people with CF have two copies of the
F508del mutation. Additional details on the Phase 3 program were
provided in a press release issued
February 26, 2013.
Phase 2 Data for VX-661 in Combination with Ivacaftor
Vertex recently announced data from a Phase 2 study of VX-661 in
combination with ivacaftor in people with two copies of the F508del
mutation. In the study, treatment with a combination of VX-661 and
ivacaftor for 28 days in the two highest dose groups resulted in mean
relative increases in lung function (percent predicted FEV1)
of 9.0% (p=0.01) and 7.5% (p=0.02) versus placebo. In contrast,
patients who received placebo showed a 0.03% mean relative change in
lung function at Day 28 (within-group). In the study, VX-661 was
generally well-tolerated, both as monotherapy and in combination with
ivacaftor, and most adverse events were pulmonary in nature, were mild
to moderate in severity and similar between the treatment groups and
those who received placebo. Additional details on these data were
provided in a press release issued
April 18, 2013.
Vertex's strategy in hepatitis C is to develop new all-oral treatment regimens of 12 weeks or less in duration with a goal of providing a high viral cure rate and improved tolerability.
Multiple Ongoing Studies of VX-135 as Part of All-Oral Treatment Regimens
Vertex is currently evaluating multiple all-oral regimens that include
VX-135, Vertex's nucleotide analogue hepatitis C virus (HCV)
polymerase inhibitor. Ongoing and planned studies include:
- Two Phase 2 studies of VX-135 in combination with ribavirin are currently ongoing in people with genotype 1 HCV infection. Vertex today announced that one of these studies is fully enrolled.
A drug-drug interaction study of VX-135 in combination with
simeprevir is ongoing in healthy volunteers. Simeprevir
(TMC435) is a once-daily investigational hepatitis C protease
inhibitor being jointly developed by
Janssen R&D Irelandand Medivir AB.
Genotypes 1, 2 or 3 and People with Cirrhosis
- Vertex plans to conduct two Phase 2 studies of VX-135 and Bristol-Myers Squibb's NS5A replication complex inhibitor daclatasvir. An initial study in people with genotype 1 HCV infection is planned for the second quarter of 2013. Vertex plans to begin a subsequent study in people infected with genotype 1, 2 or 3 HCV, including those with cirrhosis, in the second half of 2013, pending data from the initial study.
- Vertex expects to obtain the first data from all-oral studies of VX-135 in the second half of 2013, including data from the initial study of VX-135 with daclatasvir and from the studies of VX-135 with ribavirin.
- Genotype 1
Data for ALS-2200 (VX-135) in Genotypes 2, 3 and 4 and in People with Cirrhosis Presented at EASL
At the 48th Annual Meeting of the
European Association for the Study of the Liver(EASL), Vertex announced new data from a 7-day viral kinetic study of ALS-2200 in people with genotypes 2, 3 and 4 HCV and those with cirrhosis. The data showed significant reductions in HCV RNA after seven days of dosing with ALS-2200 (200 mg) once daily and were consistent with previously reported data in people with genotype 1 chronic HCV infection. ALS-2200 was well-tolerated in this study, there were no serious adverse events and no patients discontinued due to adverse events. Additional details on these data were provided in a press release issued April 23, 2013.
Data from CONCISE Study of Telaprevir Presented at EASL
Also at EASL, Vertex announced new data from an interim analysis of
the CONCISE study, which showed that treatment with telaprevir
combination therapy for a total of 12 or 24 weeks resulted in high
viral cure rates in people with genotype 1 HCV with the IL28B CC
genotype who had a rapid viral response and completed at least 12
weeks of treatment. The safety profile of telaprevir combination
therapy observed in the CONCISE study through the time of the interim
analysis was similar to that seen in previously reported clinical
trials. Additional details on these data were provided in a press
April 24, 2013.
Vertex's strategy in autoimmune diseases is to maximize the value of VX-509 across multiple autoimmune diseases globally. The company will evaluate collaborative opportunities that provide funding and capabilities to broaden and accelerate global development of VX-509.
Enrollment Complete in Phase 2b Study of VX-509 in Rheumatoid Arthritis
- Vertex today announced that enrollment is complete in a 24-week Phase 2b study of VX-509, a selective JAK3 inhibitor, in people with moderate to severe rheumatoid arthritis (RA) receiving methotrexate. The primary endpoints of this study will be measured after 12 weeks of treatment, and data from this analysis are expected in the second half of 2013.
First Quarter 2013 Financial Results
Total Revenues: Total revenues for the first quarter of 2013 were
Three Months Ended
|Product revenues||(in millions)|
|INCIVEK revenues, net||$||205.6||$||356.9|
|KALYDECO revenues, net||61.8||18.4|
|Total product revenues, net||267.4||375.4|
|Royalty revenues from INCIVO||39.0||32.9|
|Other royalty revenues||4.6||6.0|
|Total royalty revenues||43.6||39.0|
A table of the components of total revenues for the first quarter of 2013 and each quarter in 2012 is provided following the Condensed Consolidated Statements of Operations Data.
Net Product Revenues from INCIVEK
Vertex's first quarter 2013 net product revenues from INCIVEK were
$205.6 million, compared to $356.9 millionfor the first quarter of 2012. The reduced revenues from INCIVEK were due to fewer HCV patients initiating treatment in the first quarter of 2013 compared to the first quarter of 2012.
Net Product Revenues from KALYDECO
Vertex's first quarter 2013 net product revenues from KALYDECO were
$61.8 million, compared to $18.4 millionfor the first quarter of 2012. The increased revenues, compared to the first quarter of 2012, resulted primarily from the rapid uptake of KALYDECO in the vast majority of eligible patients in the U.S. following FDAapproval in January 2012.
Royalty Revenues from INCIVO®
$39.0 millionin INCIVO royalty revenues for the first quarter of 2013 from our collaborator Janssen, compared to $32.9 millionin INCIVO royalty revenues for the first quarter of 2012. The increase in INCIVO royalties was due to expanded availability of INCIVO in international markets.
Cost of Product Revenues: Cost of product revenues was
Research and Development (R&D) Expenses: R&D expenses were
Sales, General and Administrative (SG&A) Expenses: SG&A
GAAP Net Income (Loss) Attributable to Vertex: Vertex's first
quarter 2013 GAAP net loss was
Non-GAAP Net Income Attributable to Vertex: Vertex's first
quarter 2013 non-GAAP net income was
Cash Position: As of
Convertible Debt: As of
2013 Financial Guidance
This section contains forward-looking guidance about the financial
Vertex today updated its financial guidance for full-year 2013 KALYDECO
net revenues. The company now expects full-year 2013 KALYDECO net
revenues to be in the range of
The company today reiterated its financial guidance for total 2013
revenues to be in the range of
Non-GAAP Financial Measures
In this press release, Vertex's financial results and financial guidance
are provided in accordance with accounting principles generally accepted
|First Quarter Results|
|Condensed Consolidated Statements of Operations Data|
|(in thousands, except per share amounts)|
Three Months Ended
|Product revenues, net||$||267,381||$||375,375|
|Costs and expenses:|
|Cost of product revenues||30,955||25,918|
|Research and development expenses (R&D)||218,095||196,371|
|Sales, general and administrative expenses (SG&A)||92,879||111,146|
Intangible asset impairment charge (Note 1)
|Total costs and expenses||766,656||347,088|
|Income (loss) from operations||(438,288||)||91,649|
|Other income (expense), net||(4,652||)||(3,741||)|
|Income (loss) before provision for (benefit from) income taxes||(442,940||)||87,908|
|Provision for (benefit from) income taxes (Note 1)||(130,313||)||32|
|Net income (loss)||(312,627||)||87,876|
|Net loss attributable to noncontrolling interest (Note 2)||4,611||3,714|
|Net income (loss) attributable to Vertex||$||(308,016||)||$||91,590|
|Net income (loss) per share attributable to Vertex common shareholders:|
|Shares used in per share calculations:|
|Three Months Ended|
|INCIVEK revenues, net||$||205.6||$||222.8||$||254.3||$||327.7||$||356.9|
|KALYDECO revenues, net||61.8||58.5||49.2||45.5||18.4|
|Total product revenues, net||267.4||281.3||303.5||373.3||375.4|
|Royalty revenues from INCIVO||39.0||36.8||20.0||28.0||32.9|
|Other royalty revenues||4.6||6.7||5.6||5.5||6.0|
|Total royalty revenues||43.6||43.5||25.6||33.5||39.0|
Reconciliation of GAAP to
|(in thousands, except per share amounts)|
Three Months Ended
|Income (loss) from operations||$||(438,288||)||$||5,289||$||31,152||$||412,900||$||39||$||11,092|
|Other income (expense), net||(4,652||)||8||—||—||—||(4,644||)|
|Income (loss) before provision for (benefit from) income taxes||(442,940||)||5,297||31,152||412,900||39||6,448|
|Provision for (benefit from) income taxes||(130,313||)||3,426||—||127,586||—||699|
|Net income (loss)||(312,627||)||1,871||31,152||285,314||39||5,749|
|Net loss (income) attributable to noncontrolling interest (Alios)||4,611||(4,611||)||—||—||—||—|
|Net income (loss) attributable to Vertex||$||(308,016||)||$||(2,740||)||$||31,152||$||285,314||$||39||$||5,749|
|Net income (loss) per diluted share attributable to Vertex common shareholders (Note 3)||$||(1.43||)||$||0.03|
Three Months Ended
|Income (loss) from operations||$||91,649||$||5,086||$||27,627||$||—||$||360||$||124,722|
|Other income (expense), net||(3,741||)||(62||)||—||—||—||(3,803||)|
|Income (loss) before provision for (benefit from) income taxes||87,908||5,024||27,627||—||360||120,919|
|Provision for (benefit from) income taxes||32||2,280||—||—||—||2,312|
|Net income (loss)||87,876||2,744||27,627||—||360||118,607|
|Net loss (income) attributable to noncontrolling interest (Alios)||3,714||(3,714||)||—||—||—||—|
|Net income (loss) attributable to Vertex||$||91,590||$||(970||)||$||27,627||$||—||$||360||$||118,607|
|Net income (loss) per diluted share attributable to Vertex common shareholders (Note 3)||$||0.43||$||0.55|
Three Months Ended
|GAAP operating costs and expenses||$||766,656||$||347,088|
|Cost of product revenues||(30,955||)||(25,918||)|
|Stock-based compensation expense||(31,152||)||(27,627||)|
|Intangible asset impairment charge||(412,900||)||—|
|Non-GAAP operating costs and expenses||$||274,533||$||274,804|
|GAAP research and development expenses||$||218,095||$||196,371|
|Stock-based compensation expense||(19,273||)||(17,161||)|
|Non-GAAP research and development expenses||$||194,774||$||175,250|
|GAAP sales, general, and administrative expenses||$||92,879||$||111,146|
|Stock-based compensation expense||(11,879||)||(10,466||)|
|Non-GAAP sales, general, and administrative expenses||$||79,759||$||99,554|
|Condensed Consolidated Balance Sheets Data|
|Cash, cash equivalents and marketable securities||$||1,239,354||$||1,321,215|
|Restricted cash and cash equivalents (Alios) (Note 2)||63,008||69,983|
|Accounts receivable, net||194,054||143,250|
|Other current assets||47,835||24,673|
|Property and equipment, net||504,232||433,609|
|Intangible assets (Note 1)||250,600||663,500|
|Other non-current assets||8,693||9,668|
|Liabilities and Shareholders' Equity|
|Accrued restructuring expense||22,459||23,328|
|Deferred tax liability (Note 1)||151,664||280,367|
|Construction financing lease obligation||316,821||268,031|
|Convertible notes (due 2015)||400,000||400,000|
|Noncontrolling interest (Alios) (Note 2)||230,717||235,202|
|Shareholders' equity (Vertex)||746,115||999,180|
|Total liabilities and shareholders' equity||$||2,392,234||$||2,759,288|
|Common shares outstanding||218,652||217,287|
Note 1: As of
In the first quarter of 2013, the company determined that the value of
VX-222 had become impaired and that the fair value of VX-222 was zero as
Note 2: The company has consolidated the financial statements of
its collaborator Alios as of
Note 3: Shares used in non-GAAP net income per diluted share
attributable to Vertex common shareholders were 218,317,000 and
219,264,000 for the three months ended
Indication and Important Safety Information for KALYDECOTM (ivacaftor)
Ivacaftor (150mg tablets) is indicated for the treatment of cystic fibrosis (CF) in patients age 6 years and older who have a G551D mutation in the CFTR gene.
Ivacaftor is not for use in people with CF due to other mutations in the CFTR gene. It is not effective in CF patients with two copies of the F508del mutation (F508del/F508del) in the CFTR gene. The efficacy and safety of ivacaftor in children younger than 6 years of age have not been evaluated.
High liver enzymes (transaminases, ALT and AST) have been reported in patients receiving ivacaftor. It is recommended that ALT and AST be assessed prior to initiating ivacaftor, every 3 months during the first year of treatment, and annually thereafter. Patients who develop increased transaminase levels should be closely monitored until the abnormalities resolve. Dosing should be interrupted in patients with ALT or AST of greater than 5 times the upper limit of normal. Following resolution of transaminase elevations, consider the benefits and risks of resuming ivacaftor dosing. Moderate transaminase elevations are common in subjects with CF. Overall, the incidence and clinical features of transaminase elevations in clinical trials was similar between subjects in the ivacaftor and placebo treatment groups. In the subset of patients with a medical history of elevated transaminases, increased ALT or AST have been reported more frequently in patients receiving ivacaftor compared to placebo.
Use of ivacaftor with medicines that are strong CYP3A inducers such as the antibiotics rifampin and rifabutin; seizure medications (phenobarbital, carbamazepine, or phenytoin); and the herbal supplement St. John's Wort substantially decreases exposure of ivacaftor, which may diminish effectiveness. Therefore, co-administration is not recommended.
The dose of ivacaftor must be adjusted when concomitantly used with potent and moderate CYP3A inhibitors. The dose of ivacaftor must be adjusted when used in patients with moderate or severe hepatic disease.
Ivacaftor can cause serious adverse reactions including abdominal pain and high liver enzymes in the blood. The most common side effects associated with ivacaftor include headache; upper respiratory tract infection (the common cold), including sore throat, nasal or sinus congestion, and runny nose; stomach (abdominal) pain; diarrhea; rash; and dizziness. These are not all the possible side effects of ivacaftor. A list of the adverse reactions can be found in the full product labeling for each country where ivacaftor is approved. Patients should tell their healthcare providers about any side effect that bothers them or doesn't go away.
Please see full U.S. Prescribing Information for KALYDECO at www.KALYDECO.com, the EU Summary of Product Characteristics for KALYDECO at http://goo.gl/N3Tz4, and the KALYDECO Canadian Product Monograph at www.vrtx.ca.
Indication and Important Safety Information for INCIVEK (telaprevir)
INCIVEK® (telaprevir) is a prescription medicine used with the medicines peginterferon alfa and ribavirin to treat chronic (lasting a long time) hepatitis C genotype 1 infection in adults with stable liver problems, who have not been treated before or who have failed previous treatment. It is not known if INCIVEK is safe and effective in children under 18 years of age.
Important Safety Information
INCIVEK® (telaprevir) should always be used in combination with peginterferon alfa and ribavirin. INCIVEK combination treatment may cause serious side effects including skin rash and serious skin reactions, anemia (low red blood cell count) that can be severe, and birth defects or death of an unborn baby.
Skin rashes are common with INCIVEK combination treatment. Sometimes these skin rashes and other skin reactions can become serious, require treatment in a hospital, and may lead to death. Patients should call their healthcare provider right away if they develop any skin changes during treatment with INCIVEK. Their healthcare provider will decide if they need treatment or if they need to stop INCIVEK or any of their other medicines. Patients should not stop taking INCIVEK combination treatment without talking with their healthcare provider first.
Patients' healthcare providers will do blood tests regularly to check for anemia. If anemia is severe, the healthcare providers may tell them to stop taking INCIVEK.
INCIVEK combined with peginterferon alfa and ribavirin may cause birth defects or death of an unborn baby. Therefore, a patient should not take INCIVEK combination treatment if she is pregnant or may become pregnant, or if he is a man with a sexual partner who is pregnant. Females who can become pregnant and females whose male partner takes these medicines must have a negative pregnancy test before starting treatment, every month during treatment, and for 6 months after treatment ends. Patients must use two forms of effective birth control during treatment and for 6 months after all treatment has ended. These two forms of birth control should not contain hormones, as these may not work during treatment with INCIVEK.
INCIVEK and other medicines can affect each other and can also cause side effects that can be serious or life-threatening. There are certain medicines patients cannot take with INCIVEK combination treatment. Patients should tell their healthcare providers about all the medicines they take, including prescription and non-prescription medicines, vitamins and herbal supplements.
The most common side effects of INCIVEK combination treatment include itching, nausea, diarrhea, vomiting, anal or rectal problems (including hemorrhoids, discomfort, burning or itching around or near the anus), taste changes and tiredness. There are other possible side effects of INCIVEK, and side effects associated with peginterferon alfa and ribavirin also apply to INCIVEK combination treatment. Patients should tell their healthcare provider about any side effect that bothers them or doesn't go away.
Please see full Prescribing Information including Boxed Warning, and the Medication Guide for INCIVEK available at www.INCIVEK.com.
Vertex creates new possibilities in medicine. Our team discovers, develops and commercializes innovative therapies so people with serious diseases can lead better lives.
Vertex scientists and our collaborators are working on new medicines to cure or significantly advance the treatment of hepatitis C, cystic fibrosis, rheumatoid arthritis and other life-threatening diseases.
Founded more than 20 years ago in
Special Note Regarding Forward-looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, Dr. Leiden's statements in the third paragraph of the press release, the information provided in the section captioned "2013 Financial Guidance" and statements regarding (i) Vertex's strategies in cystic fibrosis, HCV and autoimmune diseases; (ii) the potential timing of clinical data from ongoing clinical trials; (iii) the percentage of patients that Vertex may be able to treat with ivacaftor monotherapy; (iv) ongoing and planned studies involving VX-135; and (v) potential collaborative opportunities that could providing funding and capabilities to broaden and accelerate global development of VX-509. While Vertex believes the forward-looking statements contained in this press release are accurate, there are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements. Those risks and uncertainties include, among other things, that the company's expectations regarding its 2013 total revenues and/or operating expenses may be incorrect (including because one or more of the company's assumptions underlying its revenue or expense expectations may not be realized), that the outcomes of Vertex's ongoing and planned clinical studies may not be favorable, that the initiation of planned studies may be delayed or prevented, and other risks listed under Risk Factors in Vertex's annual report and quarterly reports filed with the
Conference Call and Webcast
Vertex will host a conference call and webcast today, April 30, 2013 at 5:00 p.m. ET to review financial results and recent developments. The conference call will be webcast live, and a link to the webcast may be accessed from the ‘Vertex Events' page of Vertex's website at www.vrtx.com.
To listen to the live call on the telephone, dial 1-866-501-1537 (United States and Canada) or 1-720-545-0001 (International). To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast.
The conference ID number for the live call and replay is 30435497.
The call will be available for replay via telephone commencing
Following the live webcast, an archived version will be available on Vertex's website until 5:00 p.m. ET on May 7, 2013. Vertex is also providing a podcast MP3 file available for download on the Vertex website at www.vrtx.com.
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