* Net loss of 35 cents per share in fourth quarter
* Revenue $334 million
* Sees 2013 revenue $1.1 bln to $1.25 bln
* Shares fall 2 percent after-hours
(Adds analyst, company comment, updates share price)
By Bill Berkrot
Jan 29 Vertex Pharmaceuticals Inc on
Tuesday reported a third consecutive quarterly loss as sales of
its hepatitis C drug, Incivek, again fell sharply while research
and development spending rose.
Incivek sales in the fourth quarter fell by half to $222.8
million from $456.8 million in the year-ago period. Vertex
shares were down 2 percent at $45.50 in after-hours trading.
After a first year on the market that saw Incivek sales soar
past $1 billion in record time, sales have steeply declined over
the past few quarters. Many patients have chosen either to wait
for new drugs that promise fewer side effects and shorter
treatment duration, or have signed up for clinical trials
testing new interferon-free options being pursued by several
companies, including Vertex itself.
Incivek was approved in 2011 to great fanfare as it doubled
cure rates for the serious liver disease. But it must be taken
with interferon, which causes miserable flu-like symptoms that
lead many patients to delay or discontinue treatment. New
options are seen as being less than a year away.
Vertex management, on a conference call with analysts and
investors, said Icivek will continue to generate revenue in 2013
from patients motivated to begin treatment before new options
are available and from those whose disease is too far along to
safely wait for new drugs.
The Massachusetts-based biotechnology company reported a net
loss of $76.1 million, or 35 cents per share, compared with a
profit of $158.6 million, or 74 cents per share, a year ago.
The results included a charge of $85.1 million in large part
to account for a reserve against the potential for excess
Sales of Vertex's new cystic fibrosis treatment, Kalydeco,
rose to $58.5 million from $49 million in the third quarter as
the drug was launched in some European markets. Sales growth of
Kalydeco is somewhat limited by the fact that it treats only
about 4 percent of CF patients with a specific gene mutation.
Once it receives a regulatory green light, Vertex expects
this year to begin pivotal trials testing Kalydeco in
combination with an experimental drug, VX-809, aimed at
addressing a far greater portion of CF patients.
"The key for investors and the real upside potential for
Vertex lies in the promise of a Phase III study that will be
starting soon for a combination cystic fibrosis regimen," said
RBC Capital Markets analyst Michael Yee.
If those results are positive, Yee said, "that would support
a massive expansion into at least 30 percent of the cystic
fibrosis population. It could be a $3 billion-plus franchise."
For 2013, Vertex forecast revenue of $1.1 billion to $1.25
billion, in line with Wall Street estimates of $1.14 billion,
according to Thomson Reuters I/B/E/S.
The forecast includes Kalydeco sales of $280 million to $320
million. The Kalydeco sales target assumes completion of
reimbursement discussions in countries outside the United
States, the company said.
Revenue for the fourth quarter was $334 million, exceeding
Wall Street expectations of $318 million.
R&D expenses were $213.1 million, up from $186.4 million a
year ago, as the company pours money into clinical trials for
hepatitis, cystic fibrosis and rheumatoid arthritis.
"Entering 2013, we are committed to advancing key
development programs and to maintaining financial strength to
position the company for sustainable long-term growth," Chief
Executive Jeffrey Leiden said in a statement.
(Reporting by Bill Berkrot in New York; editing by Bernard Orr
and Matthew Lewis)