BOSTON--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated financial results for the quarter ended June 30, 2016 and reviewed recent progress with its approved and investigational cystic fibrosis (CF) medicines.

"Just over a year ago, we received FDA approval for ORKAMBI, marking the most significant step to date in our journey to develop new medicines for potentially all people with CF,” said Jeffrey Leiden, M.D., Ph.D., Chairman, President and Chief Executive Officer of Vertex. "Today, approximately 27,000 people are eligible for a medicine to treat the cause of their CF, and we're making significant progress toward bringing ORKAMBI and KALYDECO to even more patients while also advancing our pipeline of other potential medicines to enhance the future treatment of CF."

Vertex today reviewed recent progress from across its CF program:

ORKAMBI

Supplemental New Drug Application for the treatment of children ages 6 to 11 accepted for Priority Review by the U.S. FDA: In late May 2016, the U.S. Food and Drug Administration (FDA) granted Vertex's request for Priority Review of a supplemental New Drug Application (sNDA) for approval of ORKAMBI for children ages 6 through 11 who have two copies of the F508del mutation. The FDA set a target review date of September 30, 2016 for a decision on the sNDA. There are approximately 2,400 children ages 6 through 11 who have two copies of the F508del mutation in the U.S. The sNDA was based on data from an open label Phase 3 safety study of ORKAMBI. Data from this study were presented at the 39th European Cystic Fibrosis Society (ECFS) conference on June 10, 2016.

Enrollment complete in Phase 3 study in children ages 6 to 11 to support approval in Europe: Vertex has completed enrollment in a six-month Phase 3 efficacy study evaluating ORKAMBI in children ages 6 through 11 who have two copies of the F508del mutation. The primary endpoint is the absolute change in lung clearance index. Pending data from the study, Vertex plans to submit a Marketing Authorization Application variation in the European Union in the first half of 2017. In Europe, there are approximately 3,400 children ages 6 through 11 who have two copies of the F508del mutation.

Initiation of Phase 3 study of ORKAMBI in children ages 2 to 5: Vertex recently initiated a Phase 3 study of ORKAMBI in children ages 2 to 5. Similar to the study of KALYDECO in children in this age group, the first part of the two-part study is evaluating pharmacokinetics and safety to inform dose selection for the second part of the study. The primary endpoint of the second part of the study is safety and tolerability, with multiple efficacy measurements as secondary endpoints.

KALYDECO

Regulatory filing for patients with residual function mutations: In October 2015, Vertex submitted an sNDA for approval of KALYDECO for treatment of people with CF ages 2 and older who have one of 23 residual function mutations and received a Complete Response Letter on this sNDA in February 2016. There are approximately 1,500 people ages 2 and older in the U.S. who have one of the 23 residual function mutations included in the sNDA, and Vertex continues to pursue FDA approval of KALYDECO for these patients as soon as possible.

VX-661 in Combination with Ivacaftor

Data from Phase 3 study in people with two copies of F508del mutation expected in first half of 2017: Vertex today announced that it expects to complete enrollment of a 24-week Phase 3 placebo-controlled study evaluating the investigational combination of VX-661 and ivacaftor in people ages 12 and older who have two copies of the F508del mutation in August 2016. Data from this study are expected in the first half of 2017. The remaining three Phase 3 studies of VX-661 in combination with ivacaftor are proceeding as outlined in the company's April 27, 2016 press release. Vertex plans to submit a New Drug Application (NDA) to the FDA for VX-661 in combination with ivacaftor in the second half of 2017, pending data from the Phase 3 program.

Next-Generation Correctors

Ongoing Phase 1 studies in healthy volunteers: Vertex's two next-generation correctors known as VX-152 and VX-440 are being evaluated alone and as part of a triple combination with VX-661 and ivacaftor in ongoing Phase 1 studies in healthy volunteers. Pending data from the Phase 1 studies, the company expects to begin Phase 2 clinical development in people with CF to evaluate one or both of the next-generation correctors with VX-661 and ivacaftor in the second half of 2016.

New Collaboration to Advance Future Treatment of CF

Collaboration with Moderna Therapeutics focused on mRNA Therapeutics for CF: In early July, Vertex entered into an exclusive research collaboration and licensing agreement with Moderna Therapeutics aimed at the discovery and development of messenger Ribosomal Nucleic Acid (mRNA) therapies for the treatment of CF. The collaboration will focus on the use of mRNA therapies to treat the underlying cause of CF by enabling cells in the lungs to produce functional copies of the cystic fibrosis transmembrane conductance regulator (CFTR) protein, which is known to be defective in people with CF. As part of the collaboration, Vertex made an up-front payment of $20 million to Moderna as well as a $20 million equity investment. The investment will provide Vertex with an ownership stake in Moderna. Vertex will also pay Moderna future development and regulatory milestones of up to $275 million, including $220 million in approval and reimbursement milestones, as well as tiered royalty payments on future sales.

Second Quarter 2016 Financial Highlights

Revenues:

• Net product revenues from ORKAMBI were $245.5 million. ORKAMBI was launched in the U.S. in July 2015.
• Net product revenues from KALYDECO were $180.2 million, compared to $154.9 million for the second quarter of 2015.

Expenses:

• GAAP operating expenses were $428.3 million compared to $337.2 million for the second quarter of 2015. Non-GAAP operating expenses (combined non-GAAP R&D and SG&A) were $306.3 million compared to $253.9 million for the second quarter of 2015. The increases were primarily driven by increased costs related to the progression of our CF pipeline and to increased investment in global commercial support for the launch of ORKAMBI.
• GAAP R&D expenses were $271.0 million compared to $223.9 million for the second quarter of 2015. Non-GAAP R&D expenses were $217.7 million compared to $181.9 million for the second quarter of 2015. The increases were primarily driven by increased investment to progress our portfolio of CF medicines.
• GAAP SG&A expenses were $111.7 million compared to $94.4 million for the second quarter of 2015. Non-GAAP SG&A expenses were $88.6 million compared to $72.0 million for the second quarter of 2015. The increases were primarily driven by increased investment to support the global launch of ORKAMBI.

Net Income (Loss) Attributable to Vertex:

• GAAP net loss was $(64.5) million, or $(0.26) per diluted share, compared to GAAP net loss of $(188.8) million, or $(0.78) per diluted share, for the second quarter of 2015. Non-GAAP net income was $58.0 million, or $0.24 per diluted share, compared to a non-GAAP net loss of $(130.7) million, or $(0.54) per diluted share, for the second quarter of 2015.

Cash Position:

• As of June 30, 2016, Vertex had $1.07 billion in cash, cash equivalents and marketable securities compared to $1.04 billion in cash, cash equivalents and marketable securities as of December 31, 2015.
• As of June 30, 2016, Vertex had $300 million outstanding from a credit agreement, repayable by the end of the third quarter of 2017.

2016 Financial Guidance:

Vertex today reiterated its 2016 revenue guidance for ORKAMBI and KALYDECO. The company also reiterated guidance for its 2016 combined non-GAAP R&D and SG&A expenses. The guidance is summarized below:

• ORKAMBI: The company continues to expect total 2016 product revenues for ORKAMBI of $1.0 to $1.1 billion. As of June 30, 2016, approximately 6,000 patients had initiated treatment with ORKAMBI in the U.S. In addition to revenues from the use of ORKAMBI in patients ages 12 and older in the U.S., the 2016 ORKAMBI guidance also reflects potential revenues from the anticipated use of ORKAMBI in the U.S. for the treatment of people ages 6 to 11 who have two copies of the F508del mutation in the fourth quarter of 2016, pending FDA approval, and revenues from sales of ORKAMBI outside the U.S., primarily in Germany.
• KALYDECO: The company continues to expect total 2016 product revenues for KALYDECO of $685 to $705 million. 2016 guidance for KALYDECO currently excludes any revenues related to the potential approval of KALYDECO for people in the U.S. who have residual function mutations.
• Operating Expenses (Combined Non-GAAP R&D and SG&A Expenses): Vertex continues to expect that its combined non-GAAP R&D and SG&A expenses in 2016 will be in the range of $1.18 to $1.23 billion. Vertex's expected non-GAAP R&D and SG&A expenses exclude stock-based compensation expense and certain other expenses.

About Vertex

Vertex is a global biotechnology company that aims to discover, develop and commercialize innovative medicines so people with serious diseases can lead better lives. In addition to our clinical development programs focused on cystic fibrosis, Vertex has more than a dozen ongoing research programs aimed at other serious and life-threatening diseases.

Founded in 1989 in Cambridge, Mass., Vertex today has research and development sites and commercial offices in the United States, Europe, Canada and Australia. For six years in a row, Science magazine has named Vertex one of its Top Employers in the life sciences. For additional information and the latest updates from the company, please visitwww.vrtx.com.