Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated financial results for the third quarter ended September 30, 2020 and revised upward its full-year 2020 financial guidance for product revenues.
"This has been another very strong quarter for Vertex with execution across our CF business and continued earnings and revenue growth," said Reshma Kewalramani, M.D., Chief Executive Officer and President of Vertex. "We are pleased with our progress toward treating all people with cystic fibrosis highlighted by several recent milestones: the early approval and encouraging start of the launch of KAFTRIO in the EU, positive TRIKAFTA data in children ages 6-11, and continued expansion of our medicines' labels as with our recent approval of KALYDECO for infants as young as 4 months of age."
"As we extend our leadership in CF, we are also advancing a broad pipeline of innovative therapies," continued Dr. Kewalramani. "Our R&D strategy contemplates the high-risk nature of drug development and therefore includes a portfolio approach to each of our disease areas of interest. In AATD, while disappointed by the VX-814 outcome, we look forward to the VX-864 Phase 2 proof-of-concept data in the first half of 2021. Our pipeline spans multiple diseases, and multiple important clinical readouts are expected from now through the end of 2021, each of which we expect will hold transformative potential for patients and further growth for Vertex."
Third-Quarter 2020 Financial Highlights
|
Three Months Ended September 30, |
|
% |
||||||||||||||
|
2020 |
|
2019 |
|
Change |
||||||||||||
|
(in millions, except per share amounts) |
||||||||||||||||
Product revenues, net |
$ |
1,536 |
|
|
|
$ |
950 |
|
|
|
62% |
||||||
TRIKAFTA/KAFTRIO |
$ |
960 |
|
|
|
$ |
? |
|
|
|
|
||||||
SYMDEKO/SYMKEVI |
$ |
156 |
|
|
|
$ |
404 |
|
|
|
|
||||||
ORKAMBI |
$ |
226 |
|
|
|
$ |
297 |
|
|
|
|
||||||
KALYDECO |
$ |
194 |
|
|
|
$ |
249 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Operating income |
$ |
672 |
|
|
|
$ |
99 |
|
|
|
577% |
||||||
Non-GAAP Operating income |
$ |
854 |
|
|
|
$ |
403 |
|
|
|
112% |
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Net income |
$ |
667 |
|
|
|
$ |
58 |
|
|
|
1,060% |
||||||
Non-GAAP Net income |
$ |
697 |
|
|
|
$ |
322 |
|
|
|
117% |
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Net income per share - diluted |
$ |
2.53 |
|
|
|
$ |
0.22 |
|
|
|
1,050% |
||||||
Non-GAAP Net income per share - diluted |
$ |
2.64 |
|
|
|
$ |
1.23 |
|
|
|
115% |
Product revenues increased 62% compared to the third quarter of 2019, primarily driven by the uptake of TRIKAFTA in the U.S. and the uptake of our medicines outside the U.S. following the completion of several significant reimbursement agreements.
GAAP and non-GAAP net income increased compared to the third quarter of 2019, largely driven by strong growth in total product revenues.
Cash, cash equivalents and marketable securities as of September 30, 2020 were $6.2 billion, an increase of approximately $2.3 billion compared to $3.8 billion as of December 31, 2019 driven by strong revenue and profitability.
Third-Quarter 2020 Expenses
|
Three Months Ended September 30, |
||||||||||||||
|
2020 |
|
2019 |
||||||||||||
|
(in millions) |
||||||||||||||
Combined GAAP R&D and SG&A expenses |
$ |
678 |
|
|
|
$ |
716 |
|
|
||||||
Combined Non-GAAP R&D and SG&A expenses |
$ |
497 |
|
|
|
$ |
416 |
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
GAAP R&D expense |
$ |
493 |
|
|
|
$ |
556 |
|
|
||||||
Non-GAAP R&D expense |
$ |
350 |
|
|
|
$ |
290 |
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
GAAP SG&A expense |
$ |
185 |
|
|
|
$ |
160 |
|
|
||||||
Non-GAAP SG&A expense |
$ |
147 |
|
|
|
$ |
127 |
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
GAAP income taxes |
$ |
78 |
|
|
|
$ |
13 |
|
|
||||||
Non-GAAP income taxes |
$ |
155 |
|
|
|
$ |
84 |
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
GAAP effective tax rate |
|
11 |
|
% |
|
|
19 |
|
% |
||||||
Non-GAAP effective tax rate |
|
18 |
|
% |
|
|
21 |
|
% |
Combined GAAP R&D and SG&A expenses decreased compared to the third quarter of 2019 due to a decrease in collaboration payments.
Combined Non-GAAP R&D and SG&A expenses increased compared to the third quarter of 2019, primarily due to the incremental investment to support the global use of Vertex's medicines and the expansion of Vertex's pipeline in CF and other disease areas.
GAAP and Non-GAAP income taxes increased compared to the third quarter of 2019 primarily due to Vertex's increased operating income. Refer to the "Supplemental Income Tax Information" section for discussion of the cash versus non-cash components of Vertex's provision for income taxes.
Full-Year 2020 Financial Guidance
Vertex today revised upward its guidance for full-year 2020 product revenues. The company also adjusted its expectation for combined GAAP R&D and SG&A expenses and non-GAAP effective tax rate. Vertex's guidance is summarized below:
|
|
Current FY 2020 |
Previous FY 2020 |
|
||||||
|
|
|
|
|
||||||
TOTAL product revenues |
|
$6.0 to 6.2 billion |
$5.7 to 5.9 billion |
|
||||||
|
|
|
|
|
||||||
Combined GAAP R&D and SG&A expenses (1) |
|
$2.5 to 2.6 billion |
$2.4 to 2.55 billion |
|
||||||
Combined Non-GAAP R&D and SG&A expenses |
|
Unchanged |
$1.95 to 2.0 billion |
|
||||||
Non-GAAP effective tax rate (1) |
|
20% to 21% |
21% to 22% |
|
Key Business Highlights:
Cystic Fibrosis (CF) R&D pipeline:
Vertex expects to increase the number of CF patients eligible to take our medicines and thereby continue to grow our CF business. Important progress has been made in supporting the extension of the eligible patient population and expansion to additional geographies and age groups.
TRIKAFTA/KAFTRIO (elexacaftor, tezacaftor and ivacaftor)
SYMDEKO/SYMKEVI (tezacaftor and ivacaftor)
KALYDECO (ivacaftor)
Genetic therapies
R&D pipeline outside of CF:
Vertex continues to progress a broad pipeline of potentially transformative small molecule, cell and genetic therapies aimed at serious diseases. Recent and anticipated progress for key pipeline programs is noted below:
Beta Thalassemia and Sickle Cell Disease:
Alpha-1 Antitrypsin (AAT) Deficiency:
APOL1-mediated Kidney Diseases:
Type 1 Diabetes (T1D):
Non-GAAP Financial Measures
In this press release, Vertex's financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results and guidance exclude from Vertex's pre-tax income (i) stock-based compensation expense, (ii) revenues and expenses related to collaboration agreements, (iii) gains or losses related to the fair value of the company's strategic investments, (iv) increases or decreases in the fair value of contingent consideration, (v) acquisition-related costs and (vi) other adjustments. The company's non-GAAP financial results also exclude from its provision for income taxes the estimated tax impact related to its non-GAAP adjustments to pre-tax income described above and certain discrete items. These results should not be viewed as a substitute for the company's GAAP results and are provided as a complement to results provided in accordance with GAAP. 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 the company's financial position that the company believes is helpful to an understanding of its ongoing business. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally, to manage the company's business and to evaluate its performance. The company adjusts, where appropriate, for both revenues and expenses in order to reflect the company's operations. The company's calculation of non-GAAP financial measures likely differs from the calculations used by other companies. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.
The company provides guidance regarding combined R&D and SG&A expenses and effective tax rate on a non-GAAP basis. The guidance regarding combined GAAP R&D and SG&A expenses does not include estimates associated with any potential future business development activities. The company does not provide forward-looking reconciliations of these measures to the most directly comparable GAAP financial measures because it is unable, without unreasonable efforts, to calculate these GAAP measures with reasonable certainty.
Vertex Pharmaceuticals Incorporated |
||||||||||||||||
Third-Quarter Results |
||||||||||||||||
Consolidated Statements of Operations |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Product revenues, net |
$ |
1,536,271 |
|
|
$ |
949,828 |
|
|
$ |
4,575,863 |
|
|
$ |
2,747,461 |
|
|
Collaboration and royalty revenues |
2,000 |
|
|
? |
|
|
2,000 |
|
|
2,095 |
|
|||||
Total revenues |
1,538,271 |
|
|
949,828 |
|
|
4,577,863 |
|
|
2,749,556 |
|
|||||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||
Cost of sales |
186,182 |
|
|
131,914 |
|
|
533,199 |
|
|
362,746 |
|
|||||
Research and development expenses |
493,497 |
|
|
555,948 |
|
|
1,362,953 |
|
|
1,274,529 |
|
|||||
Sales, general and administrative expenses |
184,551 |
|
|
159,674 |
|
|
558,613 |
|
|
463,221 |
|
|||||
Change in fair value of contingent consideration |
1,800 |
|
|
2,959 |
|
|
12,600 |
|
|
2,959 |
|
|||||
Total costs and expenses |
866,030 |
|
|
850,495 |
|
|
2,467,365 |
|
|
2,103,455 |
|
|||||
Income from operations |
672,241 |
|
|
99,333 |
|
|
2,110,498 |
|
|
646,101 |
|
|||||
Interest income |
3,100 |
|
|
17,628 |
|
|
19,919 |
|
|
51,319 |
|
|||||
Interest expense |
(13,856) |
|
|
(14,548) |
|
|
(41,863) |
|
|
(44,253) |
|
|||||
Other income (expense), net (2) |
84,386 |
|
|
(31,747) |
|
|
139,621 |
|
|
64,802 |
|
|||||
Income before provision for income taxes |
745,871 |
|
|
70,666 |
|
|
2,228,175 |
|
|
717,969 |
|
|||||
Provision for income taxes |
78,437 |
|
|
13,148 |
|
|
120,718 |
|
|
124,393 |
|
|||||
Net income |
$ |
667,434 |
|
|
$ |
57,518 |
|
|
$ |
2,107,457 |
|
|
$ |
593,576 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income per common share: |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
2.56 |
|
|
$ |
0.22 |
|
|
$ |
8.10 |
|
|
$ |
2.32 |
|
|
Diluted |
$ |
2.53 |
|
|
$ |
0.22 |
|
|
$ |
7.98 |
|
|
$ |
2.28 |
|
|
Shares used in per share calculations: |
|
|
|
|
|
|
|
|||||||||
Basic |
260,392 |
|
|
256,946 |
|
|
260,313 |
|
|
256,289 |
|
|||||
Diluted |
264,079 |
|
|
260,473 |
|
|
264,031 |
|
|
260,182 |
|
Reconciliation of GAAP to Non-GAAP Net Income |
||||||||||||||||
Third-Quarter Results |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
GAAP net income |
$ |
667,434 |
|
|
$ |
57,518 |
|
|
$ |
2,107,457 |
|
|
$ |
593,576 |
|
|
Stock-based compensation expense |
99,539 |
|
|
85,420 |
|
|
332,434 |
|
|
268,898 |
|
|||||
(Increase) decrease in fair value of strategic investments (2) |
(75,750) |
|
|
31,216 |
|
|
(140,866) |
|
|
(68,862) |
|
|||||
Increase in fair value of contingent consideration (3) |
1,800 |
|
|
2,959 |
|
|
12,600 |
|
|
2,959 |
|
|||||
Collaborative revenues and expenses (4) |
78,050 |
|
|
203,777 |
|
|
141,300 |
|
|
262,286 |
|
|||||
Acquisition-related costs (5) |
2,523 |
|
|
11,459 |
|
|
7,862 |
|
|
12,690 |
|
|||||
Total non-GAAP adjustments to pre-tax income |
106,162 |
|
|
334,831 |
|
|
353,330 |
|
|
477,971 |
|
|||||
Tax adjustments (6) |
(76,250) |
|
|
(70,849) |
|
|
(402,183) |
|
|
(126,951) |
|
|||||
Non-GAAP net income |
$ |
697,346 |
|
|
$ |
321,500 |
|
|
$ |
2,058,604 |
|
|
$ |
944,596 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income per diluted common share: |
|
|
|
|
|
|
|
|||||||||
GAAP |
$ |
2.53 |
|
|
$ |
0.22 |
|
|
$ |
7.98 |
|
|
$ |
2.28 |
|
|
Non-GAAP |
$ |
2.64 |
|
|
$ |
1.23 |
|
|
$ |
7.80 |
|
|
$ |
3.63 |
|
|
Shares used in diluted per share calculations: |
|
|
|
|
|
|
|
|||||||||
GAAP and Non-GAAP |
264,079 |
|
|
260,473 |
|
|
264,031 |
|
|
260,182 |
|
Reconciliation of GAAP to Non-GAAP Revenues and Expenses |
||||||||||||||||
Third-Quarter Results |
||||||||||||||||
(in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
GAAP total revenues |
$ |
1,538,271 |
|
|
$ |
949,828 |
|
|
$ |
4,577,863 |
|
|
$ |
2,749,556 |
|
|
Collaborative revenues |
(2,000) |
|
|
? |
|
|
(2,000) |
|
|
(158) |
|
|||||
Non-GAAP total revenues |
$ |
1,536,271 |
|
|
$ |
949,828 |
|
|
$ |
4,575,863 |
|
|
$ |
2,749,398 |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
GAAP cost of sales |
$ |
186,182 |
|
|
$ |
131,914 |
|
|
$ |
533,199 |
|
|
$ |
362,746 |
|
|
Stock-based compensation expense |
(1,250) |
|
|
(1,337) |
|
|
(3,998) |
|
|
(4,178) |
|
|||||
Non-GAAP cost of sales |
$ |
184,932 |
|
|
$ |
130,577 |
|
|
$ |
529,201 |
|
|
$ |
358,568 |
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP research and development expenses |
$ |
493,497 |
|
|
$ |
555,948 |
|
|
$ |
1,362,953 |
|
|
$ |
1,274,529 |
|
|
Stock-based compensation expense |
(60,770) |
|
|
(52,504) |
|
|
(203,732) |
|
|
(167,851) |
|
|||||
Collaborative expenses (4) |
(80,050) |
|
|
(203,777) |
|
|
(143,300) |
|
|
(262,444) |
|
|||||
Acquisition-related costs (5) |
(2,523) |
|
|
(10,122) |
|
|
(7,409) |
|
|
(10,122) |
|
|||||
Non-GAAP research and development expenses |
$ |
350,154 |
|
|
$ |
289,545 |
|
|
$ |
1,008,512 |
|
|
$ |
834,112 |
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP sales, general and administrative expenses |
$ |
184,551 |
|
|
$ |
159,674 |
|
|
$ |
558,613 |
|
|
$ |
463,221 |
|
|
Stock-based compensation expense |
(37,519) |
|
|
(31,579) |
|
|
(124,704) |
|
|
(96,869) |
|
|||||
Acquisition-related costs (5) |
? |
|
|
(1,337) |
|
|
(453) |
|
|
(2,568) |
|
|||||
Non-GAAP sales, general and administrative expenses |
$ |
147,032 |
|
|
$ |
126,758 |
|
|
$ |
433,456 |
|
|
$ |
363,784 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Combined non-GAAP R&D and SG&A expenses |
$ |
497,186 |
|
|
$ |
416,303 |
|
|
$ |
1,441,968 |
|
|
$ |
1,197,896 |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
GAAP other income (expense), net |
$ |
84,386 |
|
|
$ |
(31,747) |
|
|
$ |
139,621 |
|
|
$ |
64,802 |
|
|
(Increase) decrease in fair value of strategic investments (2) |
(75,750) |
|
|
31,216 |
|
|
(140,866) |
|
|
(68,862) |
|
|||||
Non-GAAP other income (expense), net |
$ |
8,636 |
|
|
$ |
(531) |
|
|
$ |
(1,245) |
|
|
$ |
(4,060) |
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP provision for income taxes |
$ |
78,437 |
|
|
$ |
13,148 |
|
|
$ |
120,718 |
|
|
$ |
124,393 |
|
|
Tax adjustments (6) |
76,250 |
|
|
70,849 |
|
|
402,183 |
|
|
126,951 |
|
|||||
Non-GAAP provision for income taxes (7) |
$ |
154,687 |
|
|
$ |
83,997 |
|
|
$ |
522,901 |
|
|
$ |
251,344 |
|
Condensed Consolidated Balance Sheets |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
|
September 30, 2020 |
|
December 31, 2019 |
|||||
Assets |
|
|
|
|||||
Cash, cash equivalents and marketable securities |
$ |
6,151,058 |
|
|
$ |
3,808,294 |
|
|
Accounts receivable, net |
791,917 |
|
|
633,518 |
|
|||
Inventories |
245,460 |
|
|
167,502 |
|
|||
Property and equipment, net |
920,913 |
|
|
745,080 |
|
|||
Goodwill and intangible assets |
1,402,158 |
|
|
1,402,158 |
|
|||
Deferred tax assets |
1,147,816 |
|
|
1,190,815 |
|
|||
Other assets |
642,311 |
|
|
371,098 |
|
|||
Total assets |
$ |
11,301,633 |
|
|
$ |
8,318,465 |
|
|
|
|
|
|
|||||
Liabilities and Shareholders' Equity |
|
|
|
|||||
Accounts payable and accrued expenses |
$ |
1,811,485 |
|
|
$ |
1,204,522 |
|
|
Finance lease liabilities |
587,772 |
|
|
577,371 |
|
|||
Contingent consideration |
189,100 |
|
|
176,500 |
|
|||
Other liabilities |
579,803 |
|
|
274,828 |
|
|||
Shareholders' equity |
8,133,473 |
|
|
6,085,244 |
|
|||
Total liabilities and shareholders' equity |
$ |
11,301,633 |
|
|
$ |
8,318,465 |
|
|
|
|
|
|
|||||
Common shares outstanding |
260,174 |
|
|
258,993 |
|
Supplemental Income Tax Information |
||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Components of provision for income taxes related to: |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash paid or accrued for income taxes |
$ |
(2,249) |
|
|
$ |
12,961 |
|
|
$ |
45,347 |
|
|
$ |
22,953 |
|
|
Benefits from income taxes due to discrete tax items (5) |
(60,244) |
|
|
? |
|
|
(297,599) |
|
|
? |
|
|||||
Provision for income taxes offset by net operating losses and credits (6) |
140,930 |
|
|
187 |
|
|
372,970 |
|
|
101,440 |
|
|||||
GAAP provision for income taxes (7) |
$ |
78,437 |
|
|
$ |
13,148 |
|
|
$ |
120,718 |
|
|
$ |
124,393 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash paid or accrued for income taxes |
$ |
(2,249) |
|
|
$ |
12,961 |
|
|
$ |
45,347 |
|
|
$ |
22,953 |
|
|
Adjustments to pre-tax income |
16,006 |
|
|
70,849 |
|
|
104,584 |
|
|
126,951 |
|
|||||
Provision for income taxes offset by net operating losses and credits (6) |
140,930 |
|
|
187 |
|
|
372,970 |
|
|
101,440 |
|
|||||
Non-GAAP provision for income taxes (7) |
$ |
154,687 |
|
|
$ |
83,997 |
|
|
$ |
522,901 |
|
|
$ |
251,344 |
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate reconciliation: |
|
|
|
|
|
|
|
|||||||||
GAAP effective tax rate |
11 |
% |
|
19 |
% |
|
5 |
% |
|
17 |
% |
|||||
Impact of GAAP to Non-GAAP adjustments |
7 |
% |
|
2 |
% |
|
15 |
% |
|
4 |
% |
|||||
Non-GAAP effective tax rate |
18 |
% |
|
21 |
% |
|
20 |
% |
|
21 |
% |
Notes and Explanations
1: The company's increased combined GAAP R&D and SG&A expense guidance reflects the effect of a new collaboration agreement in the third quarter of 2020. The company's adjusted non-GAAP effective tax rate guidance includes a change in the utilization of certain tax assets.
2: "Other income (expense), net" includes gains and losses related to changes in the fair value of the company's strategic investments.
3: During the three and nine months ended September 30, 2020 and 2019, the increase in the fair value of contingent consideration relates to potential payments to Exonics' former equity holders.
4: "Collaborative revenues and expenses" in the three and nine months ended September 30, 2020 and 2019 primarily related to collaborative upfront and milestone payments.
5: "Acquisition-related costs" in the three and nine months ended September 30, 2020 and 2019 related to costs associated with the company's acquisitions of Semma and Exonics.
6: In the three and nine months ended September 30, 2020 and 2019, "Tax adjustments" primarily related to the estimated income taxes related to non-GAAP adjustments to pre-tax income including (i) stock-based compensation (including an adjustment for excess tax benefits related to stock-based compensation), (ii) increases or decreases in the fair value of the company's strategic investments and (iii) collaborative payments. In the three and nine months ended September 30, 2020, "Tax adjustments" also included non-recurring discrete benefits to the company's provision for income taxes of approximately $60.2 million and $297.6 million, respectively, that the company excluded from its Non-GAAP measures.
7: The company records a provision for income taxes on its pre-tax income using an effective tax rate approximating statutory rates. Since the company released its valuation allowance on the majority of its net operating losses and other deferred tax assets as of December 31, 2018, its tax provision has included a significant non-cash charge due to the company's ability to offset its pre-tax income against previously benefited net operating losses and credits. As of December 31, 2019, the company's federal net operating losses and credits that were available to offset future pre-tax income were approximately $3.5 billion. The company expects to utilize its remaining federal net operating losses in 2020. As a result, a larger portion of the company's tax provision will represent a cash expense in future periods, subject to continued utilization of certain tax credits.
About Vertex
Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases. The company has multiple approved medicines that treat the underlying cause of cystic fibrosis (CF) ? a rare, life-threatening genetic disease ? and has several ongoing clinical and research programs in CF. Beyond CF, Vertex has a robust pipeline of investigational small molecule medicines in other serious diseases where it has deep insight into causal human biology, including pain, alpha-1 antitrypsin deficiency and APOL1-mediated kidney diseases. In addition, Vertex has a rapidly expanding pipeline of genetic and cell therapies for diseases such as sickle cell disease, beta thalassemia, Duchenne muscular dystrophy and type 1 diabetes mellitus.
Founded in 1989 in Cambridge, Mass., Vertex's global headquarters is now located in Boston's Innovation District and its international headquarters is in London. Additionally, the company has research and development sites and commercial offices in North America,?Europe,?Australia?and?Latin America. Vertex is consistently recognized as one of the industry's top places to work, including 11 consecutive years on Science magazine's Top Employers list and a best place to work for LGBTQ equality by the Human Rights Campaign. For company updates and to learn more about Vertex's history of innovation, visit www.vrtx.com or follow us on Facebook, Twitter, LinkedIn, YouTube and Instagram.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, Dr. Kewalramani's statements in this press release, the information provided regarding future financial performance, the section captioned "Full-Year 2020 Financial Guidance" and statements regarding (i) regulatory filings and data submissions, (ii) anticipated future label expansions, (iii) the expectations, development plans and anticipated timelines for the company's medicines, drug candidates and pipeline programs, including collaborations with third parties, and (iv) expectations for the collaborations with Moderna. While Vertex believes the forward-looking statements contained in this press release are accurate, these forward-looking statements represent the company's beliefs only as of the date of this press release and there are a number of risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by such forward-looking statements. Those risks and uncertainties include, among other things, that the company's expectations regarding its 2020 product revenues, expenses and effective tax rates may be incorrect (including because one or more of the company's assumptions underlying its expectations may not be realized), that COVID-19 may have different or more significant impacts on the company's business or operations than the company currently expects, that data from the company's development programs may not support registration or further development of its potential medicines in a timely manner, or at all, due to safety, efficacy or other reasons, and other risks listed under Risk Factors in Vertex's annual report and subsequent quarterly reports filed with the Securities and Exchange Commission and available through the company's website at www.vrtx.com. Vertex disclaims any obligation to update the information contained in this press release as new information becomes available.
Conference Call and Webcast
The company will host a conference call and webcast today at 4:30 p.m. ET. To access the call, please dial (866) 501-1537 (U.S.) or +1 (720) 545-0001 (International). The conference call will be webcast live and a link to the webcast can be accessed through Vertex's website at www.vrtx.com in the "Investors" section under "Events and Presentations." To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast. An archived webcast will be available on the company's website.
(VRTX-E)
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