Vertex GAAP net loss increases to $77.7 million

By Jennifer Lanning Drey

Eugene, Ore., July 26 - Vertex Pharmaceuticals reported a $77.7 million, or $0.72 per share, GAAP net loss on revenues of $29.7 million for the second quarter, according to a company news release.

The GAAP net loss for the same period in 2005 was $41.0 million, or $0.50 per share, on revenues of $32.3 million, according to the release.

The loss in 2006 included stock-based compensation expenses of $11.6 million and restructuring expense of $0.4 million, according to the release.

"Our second quarter performance was marked by continued advancement of VX-950," said Lynne Brum, vice president of corporate communications, during a company conference call held Wednesday.

During the second quarter, Vertex started a phase 2b global development program for VX-950, its investigational oral hepatitis C protease inhibitor, and the company expects to have the first data from the study before the end of the year.

Vertex also announced on Wednesday that Mitsubishi Pharma Corp. has begun the first phase 1 clinical trial of VX-950 in the Far East.

In addition, Vertex entered into an agreement with Janssen Pharmaceutica, a Johnson & Johnson company, during the second quarter. Under the agreement, the two companies will develop and commercialize VX-950 in Europe, South America, the Middle East, Africa and Australia.

In July, Vertex received an upfront payment of $165 million following the signing of the contract.

As a result, the company began the third quarter with nearly $480 million in cash, cash equivalents and available for sale securities, according to Ian Smith, chief financial officer of Vertex.

At June 30, Vertex had approximately $315.9 in cash, cash equivalents and available for sale securities.

"Combining these development-phase revenues with continuing HIV product royalties, we expect to continue to receive significant funding that will provide support to our R&D investments, said Smith during Wednesday's call.

Vertex could also receive as much as $545 million in upfront license and milestone payments from the agreement with Janssen, according to the release.

"With a strong cash position, we can focus on maximizing the opportunity with VX-950 by increasing our investment into the development and manufacture of 950 to advance the program as rapidly as possible," Smith said.

He also said the company expects to end the year in a stronger cash position than previously guided. The company now expects to have $400 million cash, cash equivalents and available for sale securities, up from $300 million, which the company guided toward in February.

Beyond VX-950

Vertex also saw milestones among its other product candidates in clinical development, including VX-770 for cystic fibrosis and VX-680 for cancer treatment, according to John Alam, vice president of clinical development for Vertex.

"Our clinical activities across our programs are robust. We are in execution mode across our clinical pipeline," Alam said during Wednesday's call.

Vertex has completed dosing in the first two cohorts of volunteers in a phase 1 clinical trial for VX-770 and is preparing to evaluate multiple doses of the drug in healthy volunteers. In addition, the company will study single doses of VX-770 in patients with cystic fibrosis in the second half of 2006.

Vertex also said Merck & Co. has begun patient enrollment in a phase 2 clinical study of VX-680 targeting aurora kinase in patients with advanced colorectal cancer.

A phase 2 clinical trial of the drug in patients with hematologic cancers is ongoing.

Vertex also said Wednesday it revised its development plans for VX-702 an anti-cytokine for rheumatoid arthritis, in order to manage its resources and focus on VX-950. The company now plans to start a phase 2 clinical trial of VX-702 for rheumatoid arthritis in 2007, according to the release.

Vertex is a biotechnology company located in Cambridge, Mass., specializing in small molecule drugs.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.