Summary
Vertex Pharmaceuticals Inc. reported strong financial performance for the second quarter and first half of 2018, driven primarily by significant growth in cystic fibrosis (CF) product revenues. Total revenues increased by 38% in the quarter and 11% year-to-date, reaching $752.2 million and $1.39 billion, respectively. Net income attributable to Vertex surged to $207.4 million ($0.80/diluted share) in Q2 2018, a substantial increase from $18.0 million ($0.07/diluted share) in Q2 2017. For the first half of 2018, net income was $417.6 million ($1.61/diluted share), up from $265.8 million ($1.06/diluted share) in the prior year. This growth was propelled by the successful launch and uptake of SYMDEKO, along with continued strong performance from KALYDECO. While ORKAMBI sales saw a slight decrease due to patients switching to SYMDEKO, the overall CF franchise demonstrated robust expansion. The company also highlighted the positive impact of adopting new revenue recognition standards (ASC 606) and changes in accounting for equity investments, which contributed to increased reported revenues and other income respectively.
Financial Highlights
50 data points| Revenue | $752.16M |
| Cost of Revenue | $104.38M |
| Gross Profit | $647.77M |
| R&D Expenses | $337.53M |
| SG&A Expenses | $137.30M |
| Operating Expenses | $579.28M |
| Operating Income | $172.88M |
| Interest Expense | $18.16M |
| Net Income | $207.36M |
| EPS (Basic) | $0.82 |
| EPS (Diluted) | $0.80 |
| Shares Outstanding (Basic) | 254.13M |
| Shares Outstanding (Diluted) | 258.58M |
Key Highlights
- 1Product revenues from cystic fibrosis (CF) treatments increased significantly, up 46% in Q2 and 40% year-to-date, reaching $749.9 million and $1.39 billion respectively.
- 2SYMDEKO, launched in February 2018, generated $185.6 million in Q2 and $219.7 million in the first half of 2018, indicating strong initial market adoption.
- 3Net income attributable to Vertex saw a dramatic increase, growing to $207.4 million in Q2 2018 (vs. $18.0 million in Q2 2017) and $417.6 million for the first half (vs. $265.8 million).
- 4Diluted EPS rose to $0.80 in Q2 2018 (vs. $0.07 in Q2 2017) and $1.61 for the first half (vs. $1.06).
- 5Research and development expenses increased by 17% in Q2 and 15% year-to-date, reflecting continued investment in pipeline development, including next-generation CFTR correctors.
- 6The company adopted new accounting standard ASC 606 for revenue recognition, with a minor cumulative impact and slight adjustments to revenue and expenses reported.
- 7Other income (expense), net, showed a significant positive swing due to a $53.9 million unrealized gain on equity investments in Q2 2018, driven by the new accounting guidance for equity investments.