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The Cambridge, Massachusetts-based company reported a net loss for the third quarter of $149.57 million or $0.89 per share, compared to a loss of $130.04 million or $0.93 per share in the year-ago quarter.
Results for the third quarter of 2009 included stock-based compensation and executive transition expenses of $21.9 million and restructuring expenses of $0.80 million. The prior-year results included stock-based compensation expense of $14.5 million and restructuring expenses of $0.9 million.
Excluding items, non-GAAP net loss for the quarter widened to $126.92 million or $0.71 per share from a loss of $114.67 million $0.82 per share in the same quarter last year.
The company said that the wider non-GAAP loss was due to a decrease in collaborative revenues and increased costs related to the building of capabilities, including an increase in the number of employees and commercial investments, to support advancement of telaprevir toward potential launch.
On average, nineteen analysts polled by Thomson Reuters expected the company to report a loss of $0.81 per share for the quarter. Analysts estimates typically exclude special items.
In the preceding second quarter, Vertex's net loss widened to $171.3 million or $0.99 per share from $91.3 million or $0.66 per share a year ago. On a non-GAAP basis, net loss for the quarter was $129.3 million or $0.75 per share, compared to $73.6 million or $0.53 per share a year earlier.
Total revenues for the quarter decreased to $24.96 million from $31.61 million in the prior-year quarter. Nineteen analysts had a revenue consensus of $30.02 million for the fourth quarter.
Segment wise, Royalty revenues for the quarter increased marginally to $7.83 million from $7.76 million last year, while Collaborative and other R&D revenues declined to $17.12 million from $23.85 million a year ago.
Research and development expenses for the quarter were $132.1 million, up from $131.7 million for the third quarter of 2008. Sales, general and administrative expenses for the quarter rose to $36.6 million from $25.4 million for the similar quarter of 2008, reflecting building of capabilities, including an increase in the number of employees and commercial investments, to support advancement of telaprevir toward potential launch.
Interest expense, net, for the third quarter grew to $1.3 million from $0.6 million for the third quarter of previous year, primarily the result of lower level of investment portfolio yields reflecting the broader economic environment.
Matthew Emmens, Chairman, president and chief executive officer of Vertex said, "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."
Among the others in the industry, drug maker Schering-Plough Corp. (SGP | Quote | Chart | News | PowerRating) posted third-quarter net income of $477 million or $0.29 per share down from the previous year, reflecting weak sales of the cholesterol drugs it sells with its joint venture partner Merck, as well as the unfavorable impact of foreign exchange. The company's quarterly net sales dropped 2% to $4.499 billion from the previous year.
Bristol-Myers Squibb Co. (BMY | Quote | Chart | News | PowerRating) reported net income attributable to the company dropped to $966 million or $0.48 per share from the year-ago period, mainly due to the absence of a substantial one-time gain recorded in the prior-year quarter from the sales of ConvaTec wound-care business. Sales for the quarter improved 4% to $5.49 billion from the prior-year.
For the nine-month period, the company's net loss widened to $483.53 million or $2.86 per share from $317.52 million or $2.30 per share in the similar period last year.
Non-GAAP loss for the nine-month period widened to $384.34 million or $2.28 per share from $270.39 million or $1.96 per share in year-ago period.
Total revenue for the period declined to $68.00 million from $142.69 million in the prior-year period.
Looking ahead to fiscal 2009, the company reiterated 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.
The company expects non-GAAP loss for the year 2009 to be about $535 million and GAAP loss to be about $650 million.
Analysts currently expect a loss of $3.60 per share for fiscal 2009.
On September 30, the company revised its financial guidance for 2009, due to the decision to retain VX-509 for Phase 2 clinical development. The guidance,however, did not anticipate further contribution of cash or revenue from new business development or out-licensing activities in 2009.
Vertex noted that the GAAP guidance included an estimate of about $115 million in restructuring expense, acquisition-related expenses, executive transition expenses, stock-based compensation expense and loss on exchange of convertible subordinated notes.
VRTX closed Monday's regular trading on the Nasdaq at $32.11, down $0.39 or 1.29%. In the past 52-week period, Vertex stock traded in the range of $18.43 - $38.50, with an average 3-month volume of 1.63 million shares.
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