CAMBRIDGE, Mass., Feb. 1 /PRNewswire-FirstCall/ -- Vertex
Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated
financial results for the quarter and year ended December 31, 2006.
"2006 was characterized by significant progress across our business,
and in particular by advances in the clinical program for our lead
investigational hepatitis C virus protease inhibitor telaprevir," stated
Joshua Boger, Ph.D., President and Chief Executive Officer of Vertex
Pharmaceuticals. "The initiation of Phase 3 clinical development for
telaprevir is our primary objective for 2007, and we are now positioned to
build Vertex on telaprevir."
"We are investing and building our capabilities in key areas necessary
to support the advancement of the Company - clinical development,
regulatory affairs, quality control, and commercial supply chain
management," continued Dr. Boger. "Our projected investment in these
activities in 2007 is supported by our strong financial profile as we enter
2007."
Full Year Results
For the year ended December 31, 2006, the Company's net loss on a GAAP
basis was $206.9 million, or $1.83 per share. This included stock-based
compensation expense of approximately $39.1 million, restructuring expense
of approximately $3.7 million, loss on exchange of convertible subordinated
notes of $5.2 million, and gains related to an investment of approximately
$11.2 million, and a cumulative effect of a change in accounting principle
of $1.0 million. The net loss on a GAAP basis for the year ended December
31, 2005 was $203.4 million, or $2.28 per share. The 2005 GAAP net loss
includes stock-based compensation expense of approximately $4.6 million,
restructuring expense of approximately $8.1 million, and loss on exchange
of convertible subordinated notes of $48.2 million.
The non-GAAP loss, before certain charges and gains for the year ended
December 31, 2006 was $171.2 million, or $1.51 per share, compared to a
non- GAAP loss, before charges, of $142.4 million, or $1.60 per share for
the year ended December 31, 2005. The increase in the Company's 2006
non-GAAP loss was significantly influenced by, among other things,
increased development investment as the Company continued to advance its
proprietary drug candidates.
Total revenues for the year ended December 31, 2006 were $216.4 million
compared to $160.9 million for 2005. The increase in revenues is primarily
due to revenue recognized from development activities in collaboration with
Janssen Pharmaceutica and Merck, which offsets a decline in revenue from
the Company's research collaborations.
Research and development (R&D) expenses for the year ended December 31,
2006 were $371.7 million, including $32.0 million of stock-based
compensation, compared to $248.5 million, including $3.6 million of
stock-based compensation, for 2005. The increase primarily relates to
development investment to support the global Phase 2b clinical development
program, as well as to the Company's initial commercial inventory
investment for telaprevir (VX-950) and to increased charges for stock-based
compensation compared to the prior year, as a result of the adoption of FAS
123R on January 1, 2006.
Sales, general and administrative (SG&A) expenses for the year ended
December 31, 2006 were $57.9 million, including $7.1 million of stock-based
compensation, compared to $44.0 million, including $1.1 million of
stock-based compensation, for 2005. This increase reflects building of
infrastructure to support the advancement of the business.
Other income, net, for the year ended December 31, 2006 was $15.1
million, compared to other expense, net, of $5.3 million for 2005. This
increase resulted from increased investment balances, and the Company's
reduction of outstanding debt in 2005 and higher investment returns.
At December 31, 2006, Vertex had approximately $761.8 million in cash,
cash equivalents and other investments. This amount includes the up-front
payment of $165.0 million received from Janssen Pharmaceutica in July and
proceeds from the Company's $330.0 million equity financing completed in
September. Vertex ended 2006 with $42.1 million in principal amount of
convertible debt due September 2007 and $59.6 million in principal amount
of convertible debt due February 2011. The 2011 convertible debt has a
conversion price of $14.94 and is callable commencing in February 2007. On
February 2, 2007 Vertex intends to call that debt for redemption in March
2007 in accordance with the terms of the indentures governing the 2011
convertible debt. Vertex expects that the holders of notes evidencing that
debt will choose to convert their notes into common stock at the applicable
conversion rate rather than accept redemption, and that Vertex will
therefore issue an aggregate of approximately 4.0 million shares of common
stock in full satisfaction of its payment obligations under the 2011
convertible notes. Any notes so converted will no longer be outstanding.
Key 2006 Achievements and 2007 Objectives
* Broad clinical development program for the hepatitis C virus (HCV)
protease inhibitor telaprevir (VX-950)
* Vertex today announced the initiation of the PROVE 3 clinical trial.
PROVE 3 is a Phase 2b trial of telaprevir that is designed to enroll
440 patients infected with genotype-1 HCV who have not achieved a
sustained viral response (SVR) with a previous interferon-based
treatment. In the trial, patients will be randomized equally across
four treatment arms. The trial is planned for more than 50 centers
in the U.S., Canada and the E.U. The treatment arms include:
* 12 weeks of therapy, with telaprevir dosed at 750 mg every eight
hours (q8h) in combination with standard doses of pegylated
interferon alfa-2a (peg-IFN) and ribavirin (RBV), then continuing
for another 12 weeks with peg-IFN and RBV alone; or
* 24 weeks of therapy, with telaprevir dosed at 750 mg q8h in
combination with standard doses of peg-IFN. Patients in this arm
will not receive RBV; or
* 24 weeks of therapy, with telaprevir dosed at 750 mg q8h in
combination with standard doses of peg-IFN and RBV, then continuing
for another 24 weeks with peg-IFN and RBV alone; or
* A control arm with peg-IFN and RBV dosed for 48 weeks. Patients in
this arm who do not respond to therapy at week four or beyond will
have the option to roll into treatment with telaprevir, peg-IFN and
RBV under a separate protocol.
* Vertex expects to complete enrollment in PROVE 3 by the end of the
second quarter. This will increase to more than 1,000 the number of
patients that have enrolled in telaprevir clinical trials to date.
* The Company expects that clinical data disclosures in 2007 from the
Phase 2b PROVE program will occur principally at medical
conferences, and that the disclosure of any interim information will
be governed in part by the need to maintain the integrity of the
PROVE data to support potential registration activities.
* Vertex expects that it will expand clinical development of
telaprevir into important HCV sub-populations. Vertex's
collaborator Tibotec will undertake clinical development in patients
with genotype 2 and genotype 3 HCV infection. Vertex also
anticipates that it will initiate in 2007 a clinical trial exploring
twice-daily dosing of telaprevir.
* In 2007, Vertex will manufacture registration batches of telaprevir,
and will begin building an inventory of commercial supply.
* Vertex expects to initiate Phase 3 clinical development of
telaprevir in the second half of 2007. Vertex expects that clinical
results from the PROVE 1 and PROVE 2 clinical studies will provide
important information supporting the design and initiation of the
Phase 3 program. The timing of efficacy data availability from the
Phase 3 program is dependent upon a number of factors, including the
trial design, treatment durations, and the time required to enroll
patients into the program.
* The current PROVE clinical program (PROVE 1, 2, and 3) has the
potential to generate sufficient safety and efficacy data in a broad
range of genotype 1 HCV patients, along with safety data from the
Phase 3 program, to support an NDA filing in late 2008. An NDA
filing in that timeframe would also be dependent upon successful
completion of all chemistry, manufacturing and controls (CMC)
requirements for registration. The Company's current registration
plan is based upon these assumptions. If efficacy data from the
Phase 3 program is required for the NDA, the filing may be later than
2008. Discussions with regulatory authorities that are planned for
mid-2007 will define the registration pathways and timelines for
regulatory filings worldwide.
* VX-702 in Phase 2 development for rheumatoid arthritis (RA)
* Vertex today announced the start of a Thorough QTc study of VX-702
under an open investigational new drug (IND) application. A
Thorough QTc study is required for all small molecule drugs prior to
initiation of Phase 3 development.
* In addition, Vertex is conducting a 12-week, 120-patient Phase 2a
clinical trial to evaluate the safety, tolerability and anti-
inflammatory effects of VX-702 dosed on a background of methotrexate
in patients with RA. Depending on results from the QTc study and
the Phase 2a trial, the Company expects to initiate a larger 6-month
Phase 2 trial on a background of methotrexate.
* VX-770 advancing to Phase 2 development in cystic fibrosis (CF)
* Vertex is on track to begin in the second quarter of 2007 a Phase 2
clinical trial of VX-770 in patients with CF.
* VX-680 (MK-0457) Phase 2 trial underway in treatment-resistant
leukemias
* Vertex's collaborator Merck is conducting a Phase 2 clinical trial
with VX-680 (MK-0457) in patients with treatment-resistant chronic
myelogenous leukemia (CML) and Philadelphia chromosome-positive
acute lymphocytic leukemia (PH+ ALL) containing the T315I BCR-ABL
mutation. The trial is expected to enroll 270 patients at sites in
the United States, the European Union, and several other countries.
The trial has been designed to demonstrate the effectiveness of VX-
680 in one or more cancer indications for which there is currently
little or no effective treatment.
* VX-883, a novel investigational antibiotic active against multi-
resistant strains, advancing in 2007
* Vertex expects to advance VX-883 in preclinical development in 2007.
VX-883 is a novel dual-mechanism investigational antibiotic with in
vitro activity against a broad spectrum of bacterial pathogens,
including multi-drug resistant strains. Upon completion of certain
preclinical activities, the Company plans to initiate a Phase 1
clinical trial of VX-883 in 2007.
Full Year 2007 Financial Guidance
This section contains forward-looking guidance about the financial
outlook for Vertex Pharmaceuticals.
"In 2007, we are focused on maintaining a strong financial profile that
will enable us to continue to invest in late-stage development and
commercial activities for telaprevir," said Ian Smith, Executive Vice
President and Chief Financial Officer of Vertex. "Our increased 2007 loss
guidance compared to 2006 is primarily due to our need to significantly
invest in commercial supply to support markets where we expect to launch
telaprevir. We remain committed to managing our capital and resources,
commensurate with the risk and advancement of telaprevir."
Loss: Vertex anticipates a non-GAAP loss for 2007, excluding
restructuring charges and stock-based compensation expense, in the range of
$300 to $330 million. Vertex expects that the full year 2007 GAAP net loss
will be in the range of $360 to $390 million. The 2007 GAAP net loss
includes an estimate of stock-based compensation expense of approximately
$55 million, and restructuring expense of approximately $5 million as a
result of imputed interest charges relating to the restructuring accrual.
Revenues: Vertex expects that full year 2007 total revenue will be in
the range of $280 to $320 million. This includes:
* HIV product royalties of approximately $45 million
* Approximately $200 to $240 million of revenues from collaborative R&D
funding and milestones from existing collaborations. It is expected
that up to $80 million of milestone revenue could be achieved primarily
based on clinical advancement of telaprevir.
* Approximately $35 million of revenues from potential new collaborations
Research and Development (R&D) Expense: The Company expects that R&D
expense will be in the range of $560 to $600 million for 2007, inclusive of
approximately $45 million of stock-based compensation expense. This R&D
expense includes approximately $110 to $130 million of commercial supply
investment for telaprevir, which is considered an expense due to
telaprevir's stage of development.
Sales, General and Administrative (SG&A) Expense: Vertex expects SG&A
expense to be in the range of $80 to $90 million in 2007, inclusive of
approximately $10.0 million of stock-based compensation expense.
Cash, Cash Equivalents and Other Investments: Vertex expects cash, cash
equivalents and available for sale securities to be in excess of $450
million at the end of 2007. In 2007, Vertex expects to continue to seek to
manage its convertible debt obligations.
Non-GAAP Financial Measures
In this press release, Vertex's financial results are provided both in
accordance with accounting principles generally accepted in the United
States (GAAP) and using certain non-GAAP financial measures. In particular,
Vertex provides its full year 2006 and 2005 loss and guidance for 2007 loss
excluding, in each case, restructuring charges, stock-based compensation
expense, loss on exchange of convertible subordinated notes and net gains
related to an investment, which in each case results in a non-GAAP
financial measure. These results are provided as a complement to results
provided in accordance with GAAP because management believes these non-GAAP
financial measures help indicate underlying trends in the Company's
business and are important in comparing current results with prior period
results. Management also uses these non-GAAP financial measures to
establish budgets and operational goals that are communicated internally
and externally, and to manage the Company's business and to evaluate its
performance. A reconciliation of non-GAAP financial results to GAAP
financial results is included in the attached financial statements.
About Vertex
Vertex Pharmaceuticals Incorporated is a global biotechnology company
committed to the discovery and development of breakthrough small molecule
drugs for serious diseases. The Company's strategy is to commercialize its
products both independently and in collaboration with major pharmaceutical
companies. Vertex's product pipeline is focused on viral diseases,
inflammation, autoimmune diseases, cancer, pain and bacterial infection.
Vertex co-discovered the HIV protease inhibitor, Lexiva, with
GlaxoSmithKline.
Lexiva is a registered trademark of the GlaxoSmithKline group of
companies.
Special Note Regarding Forward-looking Statements
This press release contains forward-looking statements, including
statements that Vertex expects that (i) it is positioned to build the
Company on telaprevir; (ii) initiation of Phase 3 clinical trials for
telaprevir will be its primary objective for 2007; (iii) it will invest and
build capabilities in clinical development, regulatory affairs, quality
control and commercial supply chain management to support advancement of
the Company, and that projected investments in these activities in 2007
will be supported by a strong financial profile as the Company enters 2007;
(iv) on February 2, 2007, it will call the outstanding Convertible Senior
Subordinated Notes due 2011 for redemption in March 2007; (v) holders of
2011 Notes will choose to convert their 2011 Notes into common stock rather
than accept redemption, and the Company will issue approximately 4.0
million shares of common stock upon conversion of the 2011 Notes; (vi)
PROVE 3 will be enrolled and conducted as described; (vii) PROVE 3 will
increase to more than 1,000 the number of patients enrolled in telaprevir
clinical trials; (viii) it will complete enrollment in PROVE 3 by the end
of the second quarter of 2007; (ix) clinical results from the global Phase
2b PROVE program will provide important information supporting the design
and initiation of Phase 3 clinical trials of telaprevir in the second half
of 2007; (x) clinical data disclosures in 2007 from the Phase 2b PROVE
program will occur principally at medical conferences; (xi) it will expand
clinical development of telaprevir into important HCV sub- populations, and
that its collaborator Tibotec will undertake clinical development in
patients with genotype 2 and genotype 3 HCV infection; (xii) it will
initiate in 2007 a clinical trial exploring twice-daily dosing of
telaprevir; (xiii) in 2007, it will manufacture registration batches of
telaprevir and will begin building an inventory of commercial supply; (xiv)
the current PROVE clinical program has the potential to generate sufficient
safety and efficacy data in a broad range of genotype 1 HCV patients, along
with safety data from the Phase 3 program, to support an NDA filing for
telaprevir in 2008; (xv) discussions with regulatory authorities that are
planned for mid-2007 will define the registration pathways and timelines
for regulatory filings for telaprevir worldwide; (xvi) depending on results
from the Thorough QTc study and Phase 2a clinical trial of VX-702, it will
initiate a larger 6-month Phase 2 clinical trial of VX-702 on a background
of methotrexate; (xvii) the Phase 2 clinical trial for VX-680 will enroll
270 patients; (xviii) it will advance VX-883 in preclinical development and
initiate a Phase 1 clinical trial of VX-883 in 2007; (xix) it will be able
to invest in late-stage development and commercial activities for
telaprevir; (xx) the Company's projected 2007 annual loss, revenues, R&D
expense, commercial supply investment, SG&A expense and cash position, will
be within the ranges stated above in the Company's financial guidance; and
(xxi) the Company's estimates of its stock-based compensation expenses will
be as stated above. While the Company 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 outcomes for each of
its planned clinical trials and studies, and in particular its planned
clinical trials of telaprevir, may not be favorable, that regulatory
authorities may not allow the Company's planned trials to proceed as
designed, due to varying interpretations of existing and expected data or
disagreements over trial design or for other reasons, that the Company's
current plans are to build its organization based on telaprevir, which is
an investigational drug candidate in Phase 2b clinical trials, that
enrollment may be more difficult or slower than the Company currently
anticipates or that planned clinical trials may not start when planned due
to regulatory issues, site startup delays, availability of clinical trial
material or other reasons, that regulatory authorities will require more
extensive data for a telaprevir NDA filing thus delaying the filing, that
one or more of the Company's assumptions underlying its revenue
expectations -- including clinical and scientific progress that could lead
to milestone payments under existing collaboration agreements or other
payments under new collaborations -- or its expense expectations --
including estimates of the variables that go into determining stock-based
compensation expenses -- will not be realized, or that Vertex will be
unable to realize one or more of its financial objectives for 2007 due to
unexpected and costly program delays or any number of other financial,
technical or collaboration considerations, that unexpected costs associated
with one or more of the Company's programs will necessitate a reduction in
its investment in other programs or a change in the Company's financial
projections, that future competitive or other market factors may adversely
affect the commercial potential for the Company's product candidates in HCV
or other potential indications, that due to scientific, medical or
technical developments, the Company's drug discovery efforts will not
ultimately result in commercial products or assets that can generate
revenue, that Vertex will be unable to enter into new collaborative
relationships on acceptable terms, and other risks listed under Risk
Factors in Vertex's annual report and quarterly reports filed with the
Securities and Exchange Commission and available through the Company's
website at http://www.vrtx.com. Vertex disclaims any obligation to update the
information contained in this press release as new data become available.
Vertex Pharmaceuticals Incorporated
2006 Fourth Quarter and Twelve Month Results
Consolidated Statements of Operations Data
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------- --------- ---------- ----------
2006 2005 2006 2005
--------- --------- ---------- ----------
Revenues:
Royalties $12,122 $9,743 $41,208 $32,829
Collaborative and other
R&D revenues 82,132 54,013 175,148 128,061
--------- --------- ---------- ----------
Total revenues $94,254 $63,756 $216,356 $160,890
--------- --------- ---------- ----------
Costs and expenses:
Royalty payments 3,177 2,783 12,170 10,098
Research and development 109,146 68,158 371,713 248,540
Sales, general &
administrative 15,838 12,811 57,860 43,990
Restructuring expense 1,026 6,398 3,651 8,134
--------- --------- ---------- ----------
Total costs and expenses 129,187 90,150 445,394 310,762
--------- --------- ---------- ----------
Loss from operations $(34,933) $(26,394) $(229,038) $(149,872)
========= ========= ========== ==========
Other income (expense), net 8,319 152 15,069 (5,332)
Gain (loss) related to an
investment (730) --- 11,183 ---
Loss on exchange of
convertible subordinated
notes --- (11,889) (5,151) (48,213)
--------- --------- ---------- ----------
Loss from continuing
operations before
cumulative effect of a
change in accounting
principle - FAS 123R $(27,344) $(38,131) $(207,937) $(203,417)
--------- --------- ---------- ----------
Cumulative effect of
a change in accounting
principle - FAS 123R --- --- 1,046 ---
--------- --------- ---------- ----------
Net loss $(27,344) $(38,131) $(206,891) $(203,417)
========= ========= ========== ==========
Basic and diluted loss
per common share before
cumulative effect of a
change in accounting
principle - FAS 123R $(0.22) $(0.38) $(1.84) $(2.28)
Cumulative effect of a change
in accounting principle -
basic and diluted --- --- $0.01 ---
Basic and diluted net loss
per share $(0.22) $(0.38) $(1.83) $(2.28)
========= ========= ========== ==========
Basic and diluted weighted
average number of common
shares outstanding 123,942 100,535 113,221 89,241
Non-GAAP Loss Reconciliation (Note 1)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------- --------- ---------- ----------
2006 2005 2006 2005
--------- --------- ---------- ----------
GAAP Net Loss $(27,344) $(38,131) $(206,891) $(203,417)
Pro Forma Adjustments:
Stock-based compensation
expense included in
R&D (Note 2): $8,287 $1,052 $32,002 $3,567
Stock-based compensation
expense included in
SG&A (Note 2): 1,804 505 7,135 1,065
--------- --------- ---------- ----------
Total stock-based
compensation expense $10,091 $1,557 $39,137 $4,632
Gain (loss) related to
an investment (Note 6) 730 --- (11,183) ---
Loss on exchange of
convertible subordinated
notes (Note 5) --- 11,889 5,151 48,213
Restructuring
expense (Note 4) 1,026 6,398 3,651 8,134
Cumulative effect of
a change in
accounting principle
- FAS 123R (Note 3) --- --- $(1,046) ---
--------- --------- ---------- ----------
Non-GAAP loss $(15,497) $(18,287) $(171,181) $(142,438)
Basic and diluted
non-GAAP loss
per share $(0.13) $(0.18) $(1.51) $(1.60)
Note 1: Financial results are provided both in accordance with generally
accepted accounting principles (GAAP) in the United States and using
certain non-GAAP financial measures. These results are provided as a
complement to the results in accordance with GAAP because management
believes these non-GAAP measures help indicate underlying trends in the
Company's business, and uses these non-GAAP financial measures to
establish budgets and operational goals that are communicated internally
and externally, to manage the Company's business and to evaluate its
performance.
Note 2: For the three and twelve months ended December 31, 2006, the
Company incurred $10.1 million and $39.1 million, respectively, in stock
compensation expense of which $8.3 million and $32.0 million,
respectively, is included in research and development expenses and $1.8
million and $7.1 million, respectively, is included in sales, general and
administrative expenses. Stock compensation expense includes costs
associated with restricted stock, stock option awards, and employee stock
purchase shares, which were recorded in connection with provisions of FAS
123R, "Share-Based Payment." FAS 123R requires companies to record
stock-based payments in the financial statements using a fair value
method. The Company adopted FAS 123R on a modified prospective basis
beginning January 1, 2006. For the three and twelve months ended December
31, 2005, the Company recorded $1.6 million and $4.6 million,
respectively, of stock compensation expense relating to restricted stock
awards.
Note 3: FAS 123R requires the Company to recognize expense only for
shares expected to vest, and this results in the Company being required to
estimate forfeitures on grant date. During the twelve months ended
December 31, 2006 the Company recorded a $1.0 million benefit due to the
cumulative effect of estimating forfeitures on the grant date rather than
recording them as they occur.
Note 4: For the three and twelve months ended December 31, 2006, the
Company incurred restructuring expense charges of $1.0 million and $3.7
million, respectively. These charges are primarily a result of the imputed
interest charge related to the restructuring liability.
For the three and twelve months ended December 31, 2005, the Company
incurred restructuring charges. The charge for the three months ended
December 31, 2005 was $6.4 million, which includes estimated incremental
net ongoing lease obligations as well as an imputed interest cost relating
to the restructuring accrual. For the twelve months ended December 31,
2005, the Company recorded $8.1 million of net restructuring expense which
includes a credit for reversing a portion of the restructuring liability
related to the space that Vertex decided to occupy, offset by estimated
incremental net ongoing lease obligations for the remainder of the space
and imputed interest costs on the restructuring liability.
The expense and the related liability have been estimated in accordance
with FASB 146 "Accounting for Costs Associated with Exit or Disposal
Activities" and are reviewed quarterly for changes in circumstances.
Note 5: In the third quarter 2006, the Company exchanged approximately 4.1
million shares of the Company's common stock for approximately $58.3
million in aggregate principal amount of outstanding 5.75% Convertible
Senior Subordinated Notes due 2011, plus accrued interest. As a result of
the exchange, the Company incurred a non-cash charge of approximately $5.2
million related to the incremental shares issued in the transaction over
the number that would have been issued upon the conversion of the notes
under the original terms.
In the fourth quarter 2005, holders of 5.75% Convertible Subordinated
Notes due 2011 exchanged $114.5 million in aggregate principal amount plus
accrued interest, for approximately 8.1 million shares of common stock. As
a result of the exchange, a non-cash charge of approximately $11.9 million
was incurred. This charge is related to the incremental shares issued in
the transaction over the number that would have been issued upon
conversion of the notes under the original terms.
In the third quarter 2005, holders of 5% Convertible Subordinated Notes
due 2007 exchanged $40.5 million in aggregate principal amount plus
accrued interest, for approximately 2.5 million shares of common stock. As
a result of the exchange, a non-cash charge of approximately $36.3 million
was incurred. This charge is related to the incremental shares issued in
the transaction over the number that would have been issued upon
conversion of the notes under the original terms.
Note 6: In the third quarter 2006, the Company owned warrants to purchase
shares of Altus common stock. In accordance with FAS 133, "Accounting for
Derivative Instruments and Hedging Activities," the Company recorded the
warrants on the balance sheets at a fair market value of $19.1 million and
recorded an unrealized gain on the fair market value of the warrants of
$4.3 million. In October 2006, the Company sold warrants for
approximately $18.3 million, resulting in a realized loss of $0.7 million.
In the third quarter of 2006, the Company sold 817,749 shares of Altus
Pharmaceuticals common stock for approximately $11.7 million, resulting in
a realized gain of approximately $7.7 million.
Note 7: In the third quarter 2006, the Company completed a public offering
of 10,000,000 shares of common stock, including the underwriters'
allotment of 900,000 shares, at a price of $33.00 per share. This
transaction resulted in net proceeds of approximately $313.3 million. The
net proceeds include an underwriting discount of approximately $15.7
million and other expenses that were recorded as an offset to additional
paid-in-capital.
Vertex Pharmaceuticals Incorporated
2006 Fourth Quarter Results
Condensed Consolidated Balance Sheets Data
(In thousands)
(Unaudited)
December 31, December 31,
2006 2005
------------ ------------
Assets
Cash, cash equivalents and other investments $761,752 $407,510
Other current assets 66,780 23,898
Property, plant and equipment, net 61,535 54,533
Restricted cash 30,258 41,482
Other noncurrent assets 1,254 21,575
------------ ------------
Total assets $921,579 $548,998
============ ============
Liabilities and Equity
Other liabilities $110,640 $54,443
Accrued restructuring expense 33,073 42,982
Deferred revenue 150,184 32,300
Collaborator development loan (due 2008) 19,997 19,997
Convertible notes (due 2007) 42,102 42,102
Convertible notes (due 2011) 59,648 117,998
Stockholders' Equity 505,935 239,176
------------ ------------
Total liabilities and equity $921,579 $548,998
============ ============
Common shares outstanding (Note 7) 126,121 108,153
Conference Call and Webcast: Full Year 2006 Financial Results:
Vertex Pharmaceuticals will host a conference call today, February 1,
2007 at 5:00 p.m. ET to review financial results and recent developments.
This call will be broadcast via the Internet at http://www.vrtx.com in the
investor center. Alternatively, to listen to the call on the telephone,
dial (800) 374-0296 (U.S. and Canada) or (706) 634-2224 (International).
Vertex is also providing a podcast MP3 file available for download on the
Vertex website, http://www.vrtx.com.
The call will be available for replay via telephone commencing February
1, 2007 at 8:00 p.m. ET running through 5:00 p.m. ET on February 8, 2007.
The replay phone number for the U.S. and Canada is (800) 642-1687. The
international replay number is (706) 645-9291 and the conference ID number
is 6562724. Following the live webcast, an archived version will be
available on Vertex's website until 5:00 p.m. ET on February 15, 2007.
Vertex's press releases are available at http://www.vrtx.com.
Vertex Contacts:
Lynne H. Brum, Vice President, Strategic Communications, (617) 444-6614
Michael Partridge, Director, Corporate Communications, (617) 444-6108
Lora Pike, Manager, Investor Relations, (617) 444-6755
SOURCE Vertex Pharmaceuticals Incorporated
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CONTACT:
Lynne H. Brum, Vice President, Strategic
Communications, +1-617-444-6614, Michael Partridge, Director,
Corporate Communications, +1-617-444-6108, or Lora Pike, Manager,
Investor Relations, +1-617-444-6755, all of Vertex
Pharmaceuticals Incorporated
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