(Reuters) – Vertex Pharmaceuticals Inc reported a net loss for the third quarter on Thursday with results hurt by declining sales of its Incivek hepatitis C drug, as the company turned its attention to developing a next generation of treatments for the serious liver disease.
Vertex posted a net loss of $ 57.5 million, or 27 cents per share, compared with a profit of $ 221.1 million, or $ 1.02 per share, a year ago.
Incivek product revenue fell nearly 23 percent from the previous quarter and 40 percent from a year ago to $ 254.3 million. The company maintained its full-year forecast for Incivek revenue of $ 1.1 billion to $ 1.25 billion.
Results were also affected by a $ 57.6 million charge related to expected future payments under Vertex’s collaboration with Alios BioPharma.
Earlier on Thursday, Vertex announced separate collaborations with GlaxoSmithKline Plc and Johnson & Johnson to test various combinations of its own next-generation hepatitis C medicines with those being developed by GSK and J&J.
Vertex shares closed up 4.6 percent at $ 50.48 on Nasdaq on Thursday, but fell more than 4 percent to $ 48.30 in extended trading after the company released quarterly results.
RBC Capital Markets analyst Michael Yee called the collaboration announcements “a fundamental good positive for Vertex because it gets them moving in the race (for an all oral treatment regimen), albeit one and a half to two years behind Gilead and Abbott.”
The Massachusetts-based biotechnology company reported $ 49 million in revenue from its new cystic fibrosis drug Kalydeco and $ 20 million in royalty revenue from overseas sales of Incivek, known as Incivo in Europe.
Kalydeco currently helps only a small percentage of cystic fibrosis (CF) patients with a specific gene mutation. The company is testing other drugs and combinations with the hope of eventually reaching a larger portion of the CF population.
“In hepatitis C, we are advancing rapidly with our plans to evaluate multiple all-oral regimens of VX-135, both with medicines in our own pipeline and, as we announced earlier today, in collaboration with other companies,” Chief Executive Jeffrey Leiden said in a statement. “We are also advancing toward our goal to help more people with cystic fibrosis.”
Total revenue for Vertex fell to $ 336 million for the quarter from $ 659.2 million a year ago, and was shy of Wall Street estimates of $ 377.1 million.
RBC’s Yee said Kalydeco sales were below Wall Street expectations of about $ 57 million. “The Kalydeco launch looks like it’s reaching a peak penetration in United States and the key for growth here going forward is country by country launches in Europe, and that’s going to take some time over the next six to 12 months,” Yee said.
“What matters here longer term is development of their cystic fibrosis combination program to expand this market from a potential $ 1 billion drug to a $ 3 billion potential program,” Yee added.
Incivek, which was approved in May 2011 to great fanfare as it doubled cure rates and shortened treatment durations compared with older drugs, reached $ 1 billion in sales faster than any drug in pharmaceutical history. But it must still be taken with the older injected drug interferon that causes flu-like symptoms.
As excitement builds for interferon-free, all-oral regimens being pursued by several companies, including Vertex, more patients appear to be delaying treatment, hurting Incivek sales. In addition, hundreds of other potential Incivek patients have been recruited to take part in the many clinical trials of next-generation treatments.
(Reporting by Bill Berkrot in New York; editing by Gary Hill, Matthew Lewis and Carol Bishopric)
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