Summary
Vertex Pharmaceuticals (VRTX) has filed an 8-K reporting the deconsolidation of Parion Sciences, Inc.'s financial statements and a significant impairment charge. Effective September 30, 2017, VRTX is deconsolidating Parion due to the full impairment of its pulmonary ENaC platform intangible asset. This impairment, amounting to $255.3 million, is primarily driven by the results of a Phase 2 clinical trial for VX-371, a licensed ENaC inhibitor, which indicated the asset's fair value has dropped to zero. The company also announced its third-quarter 2017 financial results via a press release filed as an exhibit. While the deconsolidation is treated as a disposition of assets, it did not involve any transaction with another party or any consideration. Investors should note that this impairment charge is not expected to result in future cash expenditures. VRTX will be filing pro-forma financial statements reflecting these changes shortly.
Key Highlights
- 1Vertex Pharmaceuticals (VRTX) is deconsolidating Parion Sciences, Inc. (Parion) from its financial statements as of September 30, 2017.
- 2A significant impairment charge of $255.3 million has been recorded for the pulmonary ENaC platform intangible asset.
- 3The impairment is attributed to disappointing results from the Phase 2 clinical trial of VX-371, a key ENaC inhibitor licensed from Parion.
- 4The fair value of the pulmonary ENaC platform intangible asset was determined to be zero as of September 30, 2017.
- 5The deconsolidation is a result of the licensed asset no longer being the most significant activity of Parion and VRTX no longer being the primary beneficiary.
- 6The impairment charge will not result in future cash expenditures.
- 7VRTX announced its Q3 2017 financial results in a press release filed with this 8-K.