Vertex Pharmaceuticals Inc. Reports Operating Results (10-Q)

Vertex Pharmaceuticals Inc. (VRTX, Financial) filed Quarterly Report for the period ended 2010-06-30.

Vertex Pharmaceuticals Inc. has a market cap of $6.98 billion; its shares were traded at around $34.51 with and P/S ratio of 68.4. Vertex Pharmaceuticals Inc. had an annual average earning growth of 16.6% over the past 10 years.VRTX is in the portfolios of Edward Owens of Vanguard Health Care Fund, Pioneer Investments, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

ADVANCE was a 3-arm double-blinded placebo-controlled clinical trial that enrolled approximately 1,095 treatment-naïve patients with genotype 1 HCV infection. ADVANCE had two telaprevir-based treatment arms, one in which patients received 12 weeks of telaprevir-based triple combination therapy and one in which patients received 8 weeks of telaprevir-based triple combination therapy, in each case taking peg-IFN and RBV for a period of time after completing telaprevir dosing. Patients in both of the telaprevir-based treatment arms who met criteria for extended rapid viral response, or eRVR, completed all treatment after 24 weeks, while patients who responded to treatment but did not meet the eRVR criteria continued receiving peg-IFN and RBV for a total of 48 weeks of therapy. To satisfy the eRVR criteria, a patient must have had undetectable HCV RNA levels at the end of week 4 and week 12 after the start of treatment. ADVANCE enrolled patients at 114 clinical trial sites worldwide. Approximately 60% of the patients in ADVANCE were enrolled at trial sites in North America, approximately 20% of the patients in ADVANCE were African American, Black, Hispanic or Latino, and approximately 20% had advanced fibrosis or cirrhosis.

Adverse events leading to discontinuation of all study drugs occurred in 6.9%, 7.7% and 3.6% of patients in the 12-week telaprevir-based treatment arm, the 8-week telaprevir-based treatment arm and the control arm, respectively. Discontinuation of all treatment due to rash was 1.4%, 0.5% and 0.0% in the 12-week telaprevir-based treatment arm, the 8-week telaprevir-based treatment arm and the control arm, respectively, while discontinuation due to anemia was 0.8%, 3.3% and 0.6% in the 12-week telaprevir-based treatment arm, the 8-week telaprevir-based treatment arm and the control arm, respectively.

In ADVANCE, 68%, 66% and 9%, respectively, of patients in the 12-week telaprevir-based treatment arm, the 8-week telaprevir-based treatment arm and the control arm had undetectable HCV RNA levels 4 weeks after the initiation of treatment, which corresponds to rapid viral response, or RVR, as defined by the American Association for the Study of Liver Diseases Practice Guidelines.

In ADVANCE, the viral relapse rate was 8.6%, 9.5% and 28%, respectively, in the 12-week telaprevir-based treatment arm, the 8-week telaprevir-based treatment arm and the control arm. The viral relapse rate is the percentage of patients who had achieved undetectable HCV RNA levels at the completion of all treatment but who relapsed during the post-treatment follow-up period.

Our net loss in the second quarter of 2010 increased by $28.7 million, or 17%, as compared to our net loss in the second quarter of 2009. Our net loss in the first half of 2010 increased by $31.3 million, or 9%, as compared to our net loss in the first half of 2009. The increases in our net losses during the 2010 periods as compared to the 2009 periods resulted from a combination of an increase in our operating expenses related to increased expenses for our commercial organization and increased investment in commercial supplies of telaprevir, partially offset by an increase in our revenues, and an increase in non-cash losses that we incurred in the second quarter of 2010 related to the change in fair value of outstanding derivative instruments.

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