8-KMaterial Agreements

VERTEX PHARMACEUTICALS INC / MA 8-K Report, Material Agreement (Mar 23, 2006)

Filed March 23, 2006For Securities:VRTX

Summary

Vertex Pharmaceuticals Inc. (VRTX) filed an 8-K on March 22, 2006, reporting a significant development in its collaboration with the Cystic Fibrosis Foundation Therapeutics Inc. (CFFT). The company entered into a Second Amendment to their existing Research, Development, and Commercialization Agreement, primarily focusing on the advancement of the drug candidate VX-770 for cystic fibrosis treatment. This amendment outlines CFFT's commitment to contribute up to $13.3 million towards specified development costs for VX-770 through the end of 2007. While CFFT has conditional termination rights for its funding obligations on specific dates in 2006 and 2007, Vertex retains worldwide development and commercialization rights for VX-770. The agreement also stipulates royalty payments to CFFT on any future net sales of the drug, indicating a shared interest in the successful commercialization of this important therapy.

Key Highlights

  • 1Vertex Pharmaceuticals amended its agreement with Cystic Fibrosis Foundation Therapeutics (CFFT) regarding the drug candidate VX-770.
  • 2CFFT will contribute up to $13.3 million towards specified development costs for VX-770.
  • 3The funding from CFFT is earmarked for development costs incurred through the fourth quarter of 2007.
  • 4CFFT retains the right to terminate its funding obligation prospectively on December 31, 2006, or June 30, 2007, with 60 days' notice.
  • 5Vertex Pharmaceuticals retains worldwide development and commercialization rights for VX-770.
  • 6Vertex will pay royalties to CFFT on any future net sales of VX-770.

Frequently Asked Questions

The primary purpose of the Second Amendment is to outline the collaborative clinical development of VX-770, a drug candidate for cystic fibrosis, and to secure funding from CFFT for specific development costs.

CFFT is contributing up to $13.3 million towards certain specified VX-770 development costs incurred by Vertex through the fourth quarter of 2007.

Yes, Vertex Pharmaceuticals has the right to develop and commercialize VX-770 worldwide. The agreement also includes provisions for royalty payments to CFFT on future net sales.

Yes, CFFT may terminate its obligation to provide funds on a prospective basis effective December 31, 2006, or June 30, 2007, provided they give Vertex 60 days' notice.