Vertex Loss Narrows - TheStreet

Vertex Loss Narrows

Fourth-quarter revenue rises year over year.
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Vertex Pharmaceuticals

(VRTX) - Get Report

said Thursday it will spend much of 2007 advancing several experimental products to higher stages of clinical trials.

The most significant goal is moving telaprevir, also known as VX-950, into the third and final stage of clinical testing before the hepatitis C drug is submitted to regulators.

The company is starting another phase II test of telaprevir, and it hopes to start a phase III trial during the second half of the year. This late-stage trial "is our primary objective for 2007," said Joshua Boger, president and CEO. "We are now positioned to build Vertex on telaprevir."

The research goals were announced as the Cambridge, Mass.-based company unveiled results for 2006 and offered predictions for this year.

Vertex lost $15.5 million, or 13 cents a share, excluding one-time items, on revenue of $94.3 million for the fourth quarter. That's better than the 38-cent loss and $85 million in revenue forecast of analysts polled by Thomson First Call.

Including items, Vertex lost $27.3 million, or 22 cents a share, vs. a loss of $38.1 million, or 38 cents a share, on revenue of $63.8 million for the year-ago quarter.

Vertex's revenue comes from product royalties, collaboration agreements and milestone payments. As of Dec. 31, Vertex had approximately $761.8 million in cash, cash equivalents and other investments.

In 2007, Vertex expects to lose $300 million to $330 million, excluding special items. The Wall Street consensus is $228.5 million. The higher losses will be caused primarily by "our need to significantly invest in commercial supply to support markets where we expect to launch telaprevir," said Ian Smith, the chief financial officer.

Vertex predicts that this year's revenue will be $280 million to $320 million. Analysts were anticipating $290 million.

The company is conducting a heartbeat-related study of VX-702, which just completed phase II testing as a treatment for rheumatoid arthritis. The company said this study is required of certain drugs before they can enter a phase III trial.

Vertex also said VX-770 will move to phase II testing during the second quarter as a treatment for cystic fibrosis. The antibiotic VX-883 could begin the first stage of clinical testing later this year "upon completion of certain preclinical activities," the company said.