UPDATE 1-Vertex sells rights to HIV product royalties
(Adds details, company comment, share price)
NEW YORK, June 3 (Reuters) - Vertex Pharmaceuticals Inc(VRTX.O) said on Tuesday it sold the rights to future royalties on two HIV drugs under a license agreement with GlaxoSmithKline (GSK.L) to unnamed financial investors for a one-time cash payment of $160 million.
Vertex, whose shares rose more than 3 percent, will use the capital to help fund development of its promising hepatitis C treatment telaprevir, which began expensive phase 3 trials earlier this year.
Phase 3 is typically the final stage of human testing before a drug is submitted to regulators for an approval decision.
"The sale of this non-core financial asset provides us with significant capital and strengthens our financial position to support investment into key programs and future initiatives for our business," Vertex Chief Financial Officer Ian Smith said in a statement, mentioning in particular the hepatitis C program.
In 2007, Vertex received net HIV royalty revenue of $34.1 million, based on royalties of $48.0 million from Glaxo and $13.9 million in royalty payments made by Vertex to a third party with respect to the license agreement.
As a result of the deal, Vertex will no longer make royalty payments to the third party on the HIV treatments Lexiva and Agenerase.
Vertex shares closed up 98 cents, or 3.4 percent, at $29.53 on Nasdaq. (Reporting by Bill Berkrot)
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