VERTEX PHARMACEUTICALS INC / MA Quarterly Report for Q1 Ended Mar 31, 2015

Summary

Vertex Pharmaceuticals Inc. reported a net loss of $198.6 million for the first quarter of 2015, an improvement from the $232.5 million net loss in the same period last year. This reduction in loss was driven by a 17% increase in total revenues, primarily due to a 26% surge in product revenues, largely from KALYDECO (ivacaftor). While R&D expenses decreased year-over-year, Sales, General & Administrative (SG&A) expenses saw an increase, reflecting preparations for the potential launch of ORKAMBI (lumacaftor in combination with ivacaftor). The company's cash position remains strong, with $1.18 billion in cash, cash equivalents, and marketable securities as of March 31, 2015. The key focus for investors remains the anticipated approval and commercialization of ORKAMBI, with a PDUFA date of July 5, 2015, for the U.S. market. The company expects ORKAMBI to be a significant driver of future revenue growth. Management believes existing liquidity is sufficient for the next twelve months, but future capital needs will depend on the success of KALYDECO, ORKAMBI, and other pipeline developments.

Key Highlights

• 1Total revenues increased by 17% to $138.5 million in Q1 2015 compared to Q1 2014.
• 2Product revenues, driven by KALYDECO, grew by 26% to $130.9 million in Q1 2015.
• 3Net loss attributable to Vertex narrowed to $198.6 million from $232.5 million year-over-year.
• 4Research and Development (R&D) expenses decreased by 10% to $215.6 million, while Sales, General & Administrative (SG&A) expenses increased by 16% to $85.9 million.
• 5The company expects a U.S. regulatory decision for ORKAMBI (lumacaftor/ivacaftor) by July 5, 2015, with potential U.S. launch in mid-2015.
• 6Cash, cash equivalents, and marketable securities stood at $1.18 billion as of March 31, 2015.
• 7The company's significant ongoing investment in R&D continues, with a focus on cystic fibrosis and other specialty markets.

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