Vertex Pharmaceuticals Reports Third Quarter 2009 Financial Results and Highlights Recent Business and Clinical Progress

http://www.businesswire.com/news/home/20091026006296/en

-Phase 3 registration programs in hepatitis C and cystic fibrosis on track-

-Vertex to present telaprevir SVR data from Study C208 at AASLD meeting this
week-
CAMBRIDGE, Mass.--(Business Wire)--
Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reviewed recent
business and clinical progress and reported consolidated financial results for
the quarter ended September 30, 2009.

"Vertex has made significant advancements across its business and expects to
enter 2010 in a strong financial position that will enable the continued
investment in late-stage development programs in hepatitis C virus infection and
cystic fibrosis," said Matthew Emmens, Chairman, President and Chief Executive
Officer of Vertex Pharmaceuticals. "We remain focused on the completion of the
telaprevir Phase 3 registration program and are on track to submit a telaprevir
New Drug Application in the second half of 2010. In addition, we believe ongoing
clinical trials of telaprevir and of our novel HCV polymerase inhibitor VX-222
will enable the initiation of the first combination trial of these two compounds
in HCV patients in the coming months - underscoring our commitment to improve
patient care in HCV."

Mr. Emmens continued, "Later this week, we expect to present final SVR data from
Study C208 at the AASLD meeting in Boston showing the potential for telaprevir
to be dosed twice-daily as part of a response-guided treatment regimen. Our
confidence in telaprevir`s competitive profile remains high, and we look forward
to the presentation of data from C208 and other clinical trials in the coming
days.

"In cystic fibrosis, we recently completed enrollment in a Phase 2 trial of
VX-809, our novel CFTR corrector compound, and we continue to enroll patients
across the three trials of the Phase 3 registration program for VX-770, our
novel CFTR potentiator. VX-770 and VX-809 aim to address the underlying
defective protein responsible for this orphan disorder, with the goal of
enabling cystic fibrosis patients to live a more normal life," Mr. Emmens said.

Broad Commitment to Hepatitis C

Phase 3 registration program ongoing:ADVANCE, ILLUMINATE and REALIZE trials

* The ADVANCE, ILLUMINATE and REALIZE trials are evaluating telaprevir-based
regimens as part of a global Phase 3 registration program in more than 2,200
genotype 1 treatment-naïve and treatment-failure patients with hepatitis C virus
(HCV) infection.
* Vertex expects sustained viral response (SVR) data to become available from
ADVANCE and ILLUMINATE in the first half of 2010 and from REALIZE in mid-2010.
Vertex plans to submit a New Drug Application (NDA) for telaprevir in the second
half of 2010.
* The Phase 3 ADVANCE trial is evaluating telaprevir, or placebo, as part of a
24-week telaprevir-based response-guided treatment regimen in combination with
pegylated interferon (peg-IFN) and ribavirin (RBV) in more than 1,050
treatment-naïve HCV patients. The response-guided trial design is utilizing
rapid viral response (RVR) criteria to determine which telaprevir patients can
stop all treatment at 24 weeks.
* The Phase 3 ILLUMINATE trial is evaluating response-guided telaprevir-based
regimens, or placebo, in more than 500 treatment-naïve HCV patients. This trial
is designed to supplement SVR data obtained from the pivotal Phase 3 ADVANCE
trial. The aim of the ILLUMINATE trial is to characterize whether there is an
additional benefit to extending treatment from 24 to 48 weeks in treatment-naïve
patients who achieved undetectable virus levels at weeks 4 and 12 of treatment
(eRVR).
* The Phase 3 REALIZE trial is evaluating 48-week telaprevir-based regimens, or
placebo, in more than 650 patients with genotype 1 HCV who did not achieve an
SVR with a previous peg-IFN-based treatment. The REALIZE trial enrolled all
major treatment-failure groups, including null responders.

SVR data from telaprevir twice-daily dosing to be presented at AASLD this week

* Vertex expects that final SVR data from Study C208, which is evaluating
twice-daily telaprevir dosing, will be presented at a Presidential Plenary
session at the upcoming Annual Meeting of the American Association for the Study
of Liver Diseases (AASLD), Oct. 30 - Nov. 3 in Boston. The C208 presentation at
AASLD represents the first SVR data for telaprevir-based regimens, including SVR
results from twice-daily dosing of telaprevir, as part of a response-guided
therapy trial design, similar to that being used in the ADVANCE and ILLUMINATE
Phase 3 trials of telaprevir. Study C208 is an exploratory Phase 2, open-label
clinical study conducted by Tibotec in Europe that evaluated a twice-daily
(1125mg q12h) dosing schedule of telaprevir in combination with peg-IFN-alfa-2a
(PEGASYS®) or peg-IFN-alfa-2b (PEGINTRON®) and RBV, as compared to the current
three-times-daily (750mg q8h) telaprevir dosing schedule.

Additional telaprevir clinical studies in patients who failed prior HCV therapy

* Vertex has completed PROVE 3, a Phase 2b clinical trial of telaprevir-based
combination therapy in patients with genotype 1 HCV who did not achieve an SVR
with a previous peg-IFN-based treatment. Final PROVE 3 data, including 48-week
follow-up SVR rates (SVR48), will be presented at AASLD.
* Vertex is also conducting Study 107, an open-label Phase 2 study to evaluate
telaprevir-based combination regimens in patients who did not achieve an SVR in
the 48-week control arms of the PROVE 1, PROVE 2 and PROVE 3 studies. In Study
107, telaprevir was given in combination with peg-IFN and RBV for 12 weeks
followed by peg-IFN and RBV for 12 weeks or 36 weeks depending on the patient`s
antiviral response to telaprevir in Study 107 and whether the patient was a
prior null-responder, partial-responder or relapser.

On track to initiate STAT-C combination trial as early as Q4 2009

* Vertex is seeking to advance HCV therapy through the development of novel
combinations of Specifically-Targeted Antiviral Therapies for hepatitis C
(STAT-Cs).
* Vertex is currently conducting a three-day, multiple-dose viral kinetic study
to evaluate the antiviral activity, safety, tolerability and pharmacokinetics of
the HCV polymerase inhibitor VX-222. In the trial, VX-222 is being administered
at four different doses as a monotherapy in 32 treatment-naïve patients with
genotype 1 HCV infection. Vertex is also currently conducting a drug-drug
interaction study with VX-222 and telaprevir in healthy volunteers.
* Vertex expects to obtain data from these trials in the fourth quarter of 2009,
which could enable the initiation of a combination trial of telaprevir and
VX-222 in patients with genotype 1 HCV as early as the fourth quarter of 2009.
Vertex expects data from this first STAT-C combination study of telaprevir and
VX-222 to become available by mid-2010.

Additional HCV compounds in clinical development

* Vertex is also evaluating additional HCV compounds, including the HCV protease
inhibitors VX-813 and VX-985 as well as the HCV polymerase inhibitor VX-759.
* Vertex also has an NS5A inhibitor program in preclinical development.
* The goal of these programs is to identify compounds that are appropriate for
further development, including combination therapy.

AASLD

* The upcoming AASLD meeting, being held Oct. 30 - Nov. 3 in Boston, is expected
to include three telaprevir-related clinical presentations, including
presentations on SVR results from Study C208, final SVR48 results from PROVE 3
and results from a pooled analysis of PROVE 1 and PROVE 2 in "difficult-to-cure"
patients.

Broad Program Targeting Cystic Fibrosis

Potentiator compound VX-770 in Phase 3 registration program

* Vertex is currently conducting the ENDEAVOR Phase 3 registration program of
VX-770, an investigational Cystic Fibrosis Transmembrane Conductance Regulator
(CFTR) potentiator compound for the treatment of cystic fibrosis (CF). The
program consists of three ongoing clinical trials, known as STRIVE, ENVISION and
DISCOVER, and is designed to evaluate the utility of VX-770 across different age
groups and genotypes, including children as young as six years of age.
* The Phase 3 STRIVE trial is designed to enroll a minimum of 80 patients aged
12 years and older who carry the G551D mutation on at least one allele. Patients
will receive either VX-770 or placebo for 48 weeks in the STRIVE trial. The
Company expects to complete enrollment in STRIVE in the first quarter of 2010.
* The Phase 3 ENVISION trial is a two-part trial of VX-770 in patients with CF
aged 6 to 11 years with the G551D mutation on at least one allele. Part 1 of the
trial is a single-dose pharmacokinetic study that is expected to enroll
approximately 10 patients. Part 2 of the trial is expected to enroll
approximately 30 patients who will receive either VX-770 or placebo for 48
weeks.
* The Phase 2 DISCOVER trial is an exploratory trial designed to enroll
approximately 120 patients aged 12 years and older who are homozygous for the
F508del mutation. Patients will receive either VX-770 or placebo for 16 weeks.
* The primary endpoint for patients with the G551D mutation (STRIVE and ENVISION
trials) is change in forced expiratory volume in one second (FEV1), which will
be measured at 24 weeks. Additional FEV1 measurements will be taken at 48 weeks
as a secondary endpoint to assess durability of any observed response. Patients
in the STRIVE and ENVISION trials will receive either VX-770 or placebo for 48
weeks to gain additional safety data in G551D patients. For patients with the
F508del mutations (DISCOVER trial), the primary endpoints are safety and change
in FEV1, which will be measured at 16 weeks. Additional secondary endpoints,
including sweat chloride, will be measured in each trial to evaluate the effect
of VX-770 on improving the function of the defective CFTR protein.

Phase 2a trial of corrector compound VX-809 completes enrollment

* Vertex recently completed enrollment of approximately 90 patients in a Phase
2a trial of VX-809, an investigational CFTR corrector compound for the treatment
of CF. The trial is designed primarily to evaluate the safety and tolerability
of multiple doses of VX-809 in patients homozygous for the F508del CFTR
mutation, the most common mutation in patients with CF. In addition to safety,
the trial provides the first opportunity to evaluate the potential effect of
VX-809 on measures of CFTR function, including sweat chloride and nasal
potential difference. The trial will also evaluate whether VX-809 has an effect
on FEV1. Vertex expects to obtain data from the trial in the first quarter of
2010.

Potential to Combine VX-770 and VX-809

* VX-770 and VX-809 have been shown to have an additive effect when combined in
in vitro studies, providing a rationale to explore the clinical potential for
combining these compounds in patients with CF, which could begin in the second
half of 2010.

Additional Pipeline Progress - VX-509 (JAK3 inhibitor)

* Vertex recently announced that it plans to initiate a Phase 2 proof-of-concept
clinical trial of VX-509 in patients with moderate to severe rheumatoid
arthritis. Vertex plans to initiate the trial in the first quarter of 2010,
which the company believes will result in interim clinical data, including
measurements of safety, tolerability and clinical activity, being available in
the second half of 2010.
* Vertex plans to pursue collaborative opportunities for VX-509 with major
pharmaceutical companies and expects that any ongoing or future out-licensing
activities for VX-509 will conclude after the receipt of clinical data from the
Phase 2 trial.
* VX-509 may have broad potential for the treatment of multiple immune-mediated
inflammatory diseases.

Business Development Activities Completed in Third Quarter add $260M to Cash
Position

* Vertex added $260 million to its cash position as a result of
previously-announced business development activities completed in the third
quarter. These activities included the receipt of $155 million in cash related
to future telaprevir milestone payments and a $105 million payment received from
Mitsubishi Tanabe Pharma Corporation related to an amended agreement for the
development and commercialization of telaprevir in Japan and certain Far East
countries.

Third Quarter Results

For the quarter ended September 30, 2009, the Company`s GAAP net loss was $149.6
million, or $0.84 per share, including stock-based compensation and executive
transition expenses of $21.9 million and restructuring expenses of $0.8 million,
compared to a GAAP net loss for the quarter ended September 30, 2008 of $130.0
million, or $0.93 per share, including stock-based compensation expense of $14.5
million and restructuring expenses of $0.9 million.

The non-GAAP loss, before stock-based compensation and executive transition
expenses and restructuring expenses, for the quarter ended September 30, 2009
was $126.9 million, or $0.71 per share, compared to $114.7 million, or $0.82 per
share, for the quarter ended September 30, 2008. The increase in the Company`s
2009 non-GAAP loss was principally attributable to a decrease in collaborative
revenues and increased costs related to the building of capabilities, including
an increase in the number of employees and our commercial investments, to
support advancement of telaprevir toward potential launch.

Total revenues for the quarter ended September 30, 2009 were $25.0 million,
compared to $31.6 million for the third quarter of 2008.

Research and development (R&D) expenses for the quarter ended September 30, 2009
were $132.1 million, compared to $131.7 million for the third quarter of 2008.

Sales, general and administrative (SG&A) expenses for the quarter ended
September 30, 2009 were $36.6 million, compared to $25.4 million for the third
quarter of 2008. This increase primarily reflects building of capabilities,
including an increase in the number of employees and our commercial investments,
to support advancement of telaprevir toward potential launch.

Interest expense, net, for the quarter ended September 30, 2009 was $1.3
million, compared to interest income, net, of $0.6 million for the third quarter
of 2008. This decrease resulted primarily from a lower level of investment
portfolio yields reflecting the broader economic environment.

At September 30, 2009, Vertex had $856.6 million in cash, cash equivalents and
marketable securities. This includes proceeds of $227.2 million received in the
third quarter of 2009 from the completion of business development activities. As
part of these business development activities, an additional $32.8 million was
received on October 1, 2009, which is not reflected in Vertex`s September 30,
2009 cash position. Vertex has $144.0 million of remaining 2013 convertible
notes outstanding, with a conversion price of $23.14 per share. The 2013
convertible notes are callable on or after February 15, 2010.

Full Year 2009 Financial Guidance

This section contains forward-looking guidance about the financial outlook for
Vertex Pharmaceuticals.

The Company is today reiterating its guidance for 2009 year-end cash, cash
equivalents and marketable securities and for non-GAAP and GAAP net loss, as
provided on September 30, 2009.

Non-GAAP Financial Measures

In this press release, Vertex`s financial results are provided both in
accordance with accounting principles generally accepted in the United States
(GAAP) and using certain non-GAAP financial measures. In particular, Vertex
provides its third quarter 2009 and 2008 loss, and guidance for its projected
2009 loss, excluding restructuring expense, acquisition-related expenses,
executive transition expenses, stock-based compensation expense, and loss on
exchange of convertible subordinated notes. These results are provided as a
complement to results provided in accordance with GAAP because management
believes these non-GAAP financial measures help indicate underlying trends in
the Company`s business, are important in comparing current results with prior
period results and provide additional information regarding its financial
position. Management also uses these non-GAAP financial measures to establish
budgets and operational goals that are communicated internally and externally,
and to manage the Company`s business and to evaluate its performance. A
reconciliation of the other non-GAAP financial results to GAAP financial results
is included in the attached financial statements.

About Vertex

Vertex Pharmaceuticals Incorporated is a global biotechnology company committed
to the discovery and development of breakthrough small molecule drugs for
serious diseases. The Company`s strategy is to commercialize its products both
independently and in collaboration with major pharmaceutical companies. Vertex`s
product pipeline is focused on viral diseases, cystic fibrosis, inflammation,
autoimmune diseases, cancer and pain. Vertex co-discovered the HIV protease
inhibitor, Lexiva, with GlaxoSmithKline.

Lexiva is a registered trademark of the GlaxoSmithKline group of companies.

PEGASYS® is a registered trademark of Hoffman La Roche.

PEGINTRON® is a registered trademark of Schering Corporation.

Special Note Regarding Forward-looking Statements

This press release contains forward-looking statements, including statements
regarding (i) the Company`s Phase 3 registration programs in hepatitis C and CF
being on track; (ii) the plan to present final SVR data from Study C208, and
data from other clinical trials of telaprevir, at AASLD; (iii) the expectation
that the Company will enter 2010 in a strong financial position that will enable
the continued investment in late-stage development programs in hepatitis C and
CF; (iv) the Company being on track to submit a New Drug Application for
telaprevir in the second half of 2010; (v) the belief that ongoing clinical
trials of telaprevir and of the novel HCV polymerase inhibitor VX-222 will
enable the initiation of the first combination trial of these two compounds in
HCV patients in the coming months; (vi) the potential for telaprevir to be dosed
twice-daily as part of a response-guided treatment regimen; (vii) the Company`s
confidence in telaprevir`s competitive profile remaining high; (viii) VX-770 and
VX-809 aiming to address the underlying defective protein responsible for CF,
with the goal of enabling CF patients to live a more normal life; (ix)
expectations regarding when sustained viral response data will be available from
the Company`s ADVANCE, ILLUMINATE and REALIZE clinical trials; (x) the aim of
the ILLUMINATE clinical trial being to characterize whether there is an
additional benefit to extending treatment from 24 weeks to 48 weeks in
treatment-naïve patients who achieve eRVR; (xi) seeking to advance HCV therapy
through the development of novel combinations of Specifically-Targeted Antiviral
Therapies for hepatitis C (STAT-Cs); (xii) the expectation that the Company will
obtain data from ongoing clinical trials of VX-222 in the fourth quarter of
2009, which could enable the initiation of a combination trial of telaprevir and
VX-222 in patients with genotype 1 HCV as early as the fourth quarter of 2009;
(xiii) the expectation that data from the first STAT-C combination study of
telaprevir and VX-222 will become available by mid-2010; (xiv) the ENDEAVOR
registration program being designed to evaluate the utility of VX-770 across
different age groups and genotypes, (xv) the clinical trial designs, including
expected numbers of patients, primary and secondary endpoints and the treatment
durations, for the STRIVE, ENVISION and DISCOVER clinical trials; (xvi) the
expectation that STRIVE will complete enrollment in the first quarter of 2010;
(xvii) the expectation that the Company will obtain data from the ongoing
clinical trial of VX-809 in the first quarter of 2010; (xviii) in vitro data
providing a rationale to explore the clinical potential for combining VX-770 and
VX-809 in patients with CF and that a clinical trial evaluating this combination
could begin in the second half of 2010; (xix) the plan to initiate a Phase 2
proof-of-concept clinical trial of VX-509 in patients with moderate to severe
rheumatoid arthritis in the first quarter of 2010; (xx) the belief that the
planned VX-509 clinical trial will result in interim clinical data, including
measurements of safety, tolerability and clinical activity, being available in
the second half of 2010; (xxi) the plan to pursue collaborative opportunities
for VX-509 with major pharmaceutical companies and the expectation that any
ongoing or future out-licensing activities for VX-509 will conclude after the
receipt of clinical data from the planned Phase 2 clinical trial; (xxii) the
possibility that VX-509 may have broad potential for the treatment of multiple
immune-mediated inflammatory diseases; and (xxiii) the Company's guidance that
its 2009 year-end cash, cash equivalents and marketable securities position and
its 2009 non-GAAP and GAAP net losses will be as provided on September 30, 2009.
While the Company believes the forward-looking statements contained in this
press release are accurate, there are a number of factors that could cause
actual events or results to differ materially from those indicated by such
forward-looking statements. Those risks and uncertainties include, among other
things, that the outcomes for each of its planned clinical trials and studies,
and in particular its planned clinical trials of telaprevir, may not be
favorable, that regulatory authorities may require supplemental clinical trials
in order to support registration of telaprevir in any particular indication,
that there may be varying interpretations of data produced by one or more of our
clinical trials, that enrollment may be more difficult or slower than we
currently anticipate or that planned clinical trials may not start when planned,
that regulatory authorities will require more extensive data for a telaprevir
NDA filing than currently expected, that the Company may not be able to
successfully develop combination therapies involving telaprevir and VX-222 or
VX-770 and VX-809, that the Company may not complete additional business
development and outlicensing activities, that one or more of the Company's
assumptions underlying its revenue expectations or its expense expectations --
including estimates of the variables that go into determining stock-based
compensation expenses -- will not be realized, or that the Company will be
unable to realize one or more of its financial objectives for 2009 due to
unexpected and costly program delays, or any number of other financial,
technical or collaboration considerations, that unexpected costs associated with
one or more of the Company's programs will necessitate a reduction in its
investment in other programs or a change in the Company's financial projections,
that future competitive or other market factors may adversely affect the
commercial potential for the Company's product candidates in HCV or other
potential indications, that due to scientific, medical or technical
developments, the Company's drug discovery efforts will not ultimately result in
commercial products or assets that can generate revenue, that the Company will
be unable to enter into new collaborative relationships on acceptable terms, and
other risks listed under Risk Factors in Vertex's annual report and quarterly
reports filed with the Securities and Exchange Commission and available through
the Company's website at www.vrtx.com. The Company disclaims any obligation to
update the information contained in this press release as new information
becomes available.

Vertex Pharmaceuticals Incorporated
2009 Third Quarter and Nine Month Results
Consolidated Statements of Operations Data
(in thousands, except per share amounts)
(unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Revenues:
Royalty revenues (Note 6) $7,834 $7,763 $19,891 $28,355
Collaborative and other R&D revenues 17,123 23,846 48,109 114,338

Total revenues 24,957 31,609 68,000 142,693

Costs and expenses:
Royalty expenses (Note 6) 3,712 4,194 10,555 11,471
Research and development expenses (R&D) (Note 7) 132,132 131,728 415,044 377,574
Sales, general & administrative expenses (SG&A) (Note 7) 36,572 25,430 97,618 71,810
Restructuring expense (Note 3) 774 885 4,283 2,683
Acquisition-related expenses (Note 2) --- --- 7,793 ---

Total costs and expenses 173,190 162,237 535,293 463,538

Loss from operations (148,233) (130,628) (467,293) (320,845)

Net interest income (expense) (Note 5) (1,332) 584 (3,947) 3,326
Loss on exchange of convertible subordinated notes (Note 5) --- --- (12,294) ---
Net loss $(149,565) $(130,044) $ (483,534) $ (317,519)

Basic and diluted net loss per common share $ (0.84) $ (0.93) $ (2.86) $ (2.30)

Basic and diluted weighted-average number of common shares outstanding 178,735 140,109 169,137 137,788

Non-GAAP Loss and Loss per Common Share Reconciliation Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
GAAP Net Loss $(149,565) $(130,044) $ (483,534) $ (317,519)
Pro Forma Adjustments:
Stock-based compensation and executive transition expenses included in R&D (Note 7): $13,509 $11,423 $54,244 $35,392
Stock-based compensation and executive transition expenses included in SG&A (Note 7) 8,365 3,062 19,985 8,758

Total stock-based compensation and executive transition expenses $21,874 $14,485 $74,229 $44,150

Loss on exchange of convertible subordinated notes (Note 5) --- --- 12,294 ---
Restructuring expense (Note 3) 774 885 4,283 2,683
Acquisition-related expenses (Note 2) --- --- 7,793 ---

Non-GAAP Loss $(126,917) $(114,674) $ (384,935) $ (270,686)

Basic and diluted non-GAAP loss per common share $ (0.71) $ (0.82) $ (2.28) $ (1.96)

Note 1: On September 30, 2009, the Company entered into two financing
transactions that resulted in aggregate payments to the Company of $155.0
million. These financing transactions related to future milestone payments
pursuant to the Company`s collaboration with Janssen Pharmaceutica, N.V.
("Janssen"). In the first transaction, the Company issued notes which are
secured by $155.0 million in future telaprevir milestone payments that the
Company is eligible to receive from Janssen for the filing, approval and launch
of telaprevir in the European Union (the "2012 Notes"). The 2012 Notes have a
face value of $155.0 million, were issued at a discount and do not carry an
explicit interest rate. The 2012 Notes mature on October 31, 2012, subject to
earlier mandatory redemption to the extent milestone events are achieved prior
to October 31, 2012. In the second transaction, the Company sold rights to $95.0
million of potential future milestone payments that the Company is eligible to
receive from Janssen for the launch of telaprevir in the European Union. The
Company received $122.2 million of the $155.0 million on September 30, 2009 and
the remainder on October 1, 2009.

Note 2: On March 12, 2009, the Company acquired ViroChem Pharma Inc.
("ViroChem"), a biotechnology company based in Canada. The Company paid an
aggregate purchase price of $100.0 million in cash and 10,733,527 shares of the
Company`s common stock in order to acquire ViroChem. All of the assets acquired
and liabilities assumed in the transaction are recognized at their
acquisition-date fair values, while transaction costs and restructuring costs
associated with the transaction are expensed as incurred.

The $390.6 million purchase price for ViroChem is based on the acquisition-date
fair value of the consideration transferred, which was calculated based on the
opening price of the Company`s common stock of $27.07 per share on March 12,
2009. The difference between the aggregate purchase price and the fair value of
assets acquired and liabilities assumed is allocated to goodwill.

Note 3: The Company recorded restructuring expense of $0.8 million for the three
months ended September 30, 2009 compared to $0.9 million for the three months
ended September 30, 2008. The Company recorded restructuring expense of $4.3
million for the nine months ended September 30, 2009 compared to $2.7 million
for the nine months ended September 30, 2008. The restructuring expense in all
periods included imputed interest cost related to the restructuring liability.
The increase in restructuring expense for the nine months ended September 30,
2009 compared to the nine months ended September 30, 2008 was primarily the
result of a revision, in the first quarter of 2009, of certain key estimates and
assumptions about facility operating costs for the remaining period of the lease
commitment, for which there was no corresponding revision in the nine months
ended September 30, 2008. The lease restructuring liability was $33.4 million as
of September 30, 2009. The expense and the related liability are reviewed
quarterly for changes in circumstances.

Note 4: In February 2009, the Company completed a public offering of 10,000,000
shares of common stock, at a price of $32.00 per share. This transaction
resulted in net proceeds of $313.3 million to the Company.

In September 2008, the Company completed a public offering of 8,625,000 shares
of common stock, at a price of $25.50 per share. This transaction resulted in
net proceeds of $217.4 million to the Company.

In February 2008, the Company completed a public offering of 6,900,000 shares of
common stock at a price of $17.14 per share. This transaction resulted in net
proceeds of $112.7 million to the Company.

Note 5: In February 2008, the Company completed an offering of $287.5 million
aggregate principal amount of 4.75% convertible senior subordinated notes due
February 2013 (the "2013 Notes"). The 2013 Notes are convertible, at the option
of the holder, into common stock at a price equal to approximately $23.14 per
share, subject to adjustment under certain circumstances. The 2013 Notes bear
interest at the rate of 4.75% per year, and the Company is required to make
semi-annual interest payments on the outstanding principal balance of the notes
on February 15 and August 15 of each year. This transaction resulted in net
proceeds of $278.6 million to the Company.

In June 2009, holders of the 2013 Notes exchanged $143.5 million in aggregate
principal amount of the 2013 Notes, plus interest, for 6.6 million shares of
newly issued common stock. As a result of this exchange, the Company incurred a
non-cash charge of $12.3 million in the second quarter of 2009. The charge
corresponds to the value of additional shares issued in the transactions over
the number of shares that would have been issued upon conversion of the 2013
Notes at the conversion prices set forth therein.

Note 6: In the first quarter of 2008, the Company recognized royalty revenues
based on actual and estimated net sales of Lexiva/Telzir and Agenerase by
GlaxoSmithKline plc under the Company`s 1993 license agreement with
GlaxoSmithKline plc. In the second quarter of 2008, the Company sold the
Company`s right to receive future royalty payments, net of sub-royalty payments
due to a third party, arising from sales of Lexiva/Telzir and Agenerase under
the Company`s license agreement with GlaxoSmithKline plc in return for a
one-time cash payment of $160.0 million. After the sale of the Company`s right
to receive future royalty payments, the Company recognizes deferred revenues
relating to the $160.0 million one-time cash payment from the purchaser over the
term of our agreement with GlaxoSmithKline plc.

Note 7: Certain amounts in prior year`s financial statements have been
reclassified to conform to the current presentation. The reclassifications had
no effect on the reported net loss.

Condensed Consolidated Balance Sheets Data

(in thousands)

(unaudited)

September 30, December 31,
2009 2008
Assets
Cash, cash equivalents and marketable securities $856,610 $832,101
Receivable related to milestone transactions (Note 1) 32,783 ---
Other current assets 24,673 35,480
Property and equipment, net 62,444 68,331
Restricted cash 30,313 30,258
Intangible assets (Note 2) 525,900 ---
Goodwill (Note 2) 26,102 ---
Other non-current assets (Note 5) 14,666 14,309
Total assets $1,573,491 $980,479

Liabilities and Stockholders` Equity
Other current liabilities $150,350 $172,567
Accrued restructuring expense (Note 3) 33,358 34,064
Deferred tax liability (Note 2) 162,503 ---
Deferred revenues (Note 6) 319,536 247,474
Convertible notes (due 2013)(Note 5) 144,000 287,500
Liability related to milestone transactions (Note 1) 155,000 ---
Stockholders` equity (Notes 2, 4 & 5) 608,744 238,874
Total liabilities and stockholders` equity $1,573,491 $980,479
Common shares outstanding (Notes 2, 4 & 5) 180,899 151,245

Conference Call and Webcast: Third Quarter Financial Results:

Vertex Pharmaceuticals will host a conference call and webcast today, Monday,
October 26, 2009 at 5:00 p.m. ET to review financial results and recent
developments. This call and webcast will be broadcast via the Internet at
www.vrtx.com. It is suggested that webcast participants go to the web site at
least 10 minutes in advance of the call to ensure that they can access the
slides. The link to the webcast is available on the Events and Presentations
button on the home page.

To listen to the call on the telephone, dial (888) 219-1459 (U.S. and Canada)
(913) 312-0695 (International). Vertex is also providing a podcast MP3 file
available for download on the Vertex website at www.vrtx.com.

The call will be available for replay via telephone commencing October 26, 2009
at 8:00 p.m. ET running through 5:00 p.m. ET on November 2, 2009. The replay
phone number for the U.S. and Canada is (888) 203-1112. The international replay
number is (719) 457-0820 and the conference ID number is 7430858. Following the
live webcast, an archived version will be available on Vertex`s website until
5:00 p.m. EDT on November 9, 2009.

Vertex`s press releases are available at www.vrtx.com.

(VRTX-GEN)

Vertex Contacts:
Investors
Michael Partridge, 617-444-6108
or
Lora Pike, 617-444-6755
or
Media
Zachry Barber, 617-444-6470

Copyright Business Wire 2009