Summary
Vertex Pharmaceuticals Inc. (VRTX) announced on September 30, 2009, significant financing transactions that brought in an aggregate of $155 million in cash. These transactions are directly tied to potential future milestone payments from Janssen Pharmaceutica related to the development and launch of the drug telaprevir in the European Union. The company issued secured notes due 2012 with a face value of $155 million, receiving $122.2 million in cash for these notes, which are secured by the rights to $155 million in future telaprevir milestone payments. Additionally, Vertex sold rights to $95 million of potential future launch milestone payments for telaprevir in the EU, receiving $32.8 million in cash. Importantly, the company is not obligated to repay the $32.8 million if these specific launch milestones are not achieved, which mitigates some of the financial risk associated with this portion of the deal. These transactions provide Vertex with immediate capital while leveraging its future revenue streams related to telaprevir's EU success.
Key Highlights
- 1Vertex Pharmaceuticals raised a total of $155 million in cash through two financing transactions on September 30, 2009.
- 2The financing is linked to future milestone payments from Janssen Pharmaceutica for the drug telaprevir in the European Union.
- 3Issued $155 million in aggregate principal amount of secured notes due 2012 for $122.2 million in cash, secured by $155 million in future telaprevir milestone payments.
- 4Sold rights to $95 million in potential future telaprevir launch milestone payments in the EU for $32.8 million in cash.
- 5The $32.8 million received for the launch milestone rights is non-recourse if the milestones are not achieved, reducing risk for Vertex.
- 6The 2012 Notes were issued at a discount and do not pay current interest, with maturity on October 31, 2012.
- 7Kurt Graves, Executive Vice President and Chief Commercial Officer, is departing the company in October 2009.