|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2018
|
|
or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
FOR THE TRANSITION PERIOD FROM
TO
|
Massachusetts
|
04-3039129
|
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
50 Northern Avenue, Boston, Massachusetts
|
02210
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
|
|
|
Emerging growth company
o
|
(Do not check if a smaller reporting company)
|
Common Stock, par value $0.01 per share
|
255,559,939
|
Class
|
Outstanding at July 20, 2018
|
|
|
|
Page
|
|
||
|
||
|
Condensed Consolidated Statements of Operations - Three and Six Months Ended June 30, 2018 and 2017
|
|
|
Condensed Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2018 and 2017
|
|
|
Condensed Consolidated Balance Sheets - June 30, 2018 and December 31, 2017
|
|
|
Condensed Consolidated Statements of Shareholders' Equity and Noncontrolling Interest - Six Months Ended June 30, 2018 and 2017
|
|
|
Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2018 and 2017
|
|
|
||
|
||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product revenues, net
|
$
|
749,912
|
|
|
$
|
513,988
|
|
|
$
|
1,387,641
|
|
|
$
|
994,610
|
|
Royalty revenues
|
1,085
|
|
|
2,861
|
|
|
2,441
|
|
|
4,412
|
|
||||
Collaborative revenues
|
1,160
|
|
|
27,286
|
|
|
2,874
|
|
|
259,831
|
|
||||
Total revenues
|
752,157
|
|
|
544,135
|
|
|
1,392,956
|
|
|
1,258,853
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
104,382
|
|
|
71,205
|
|
|
175,995
|
|
|
118,193
|
|
||||
Research and development expenses
|
337,532
|
|
|
289,451
|
|
|
648,085
|
|
|
563,014
|
|
||||
Sales, general and administrative expenses
|
137,303
|
|
|
127,249
|
|
|
267,111
|
|
|
240,575
|
|
||||
Restructuring expenses (income)
|
62
|
|
|
3,523
|
|
|
(14
|
)
|
|
13,522
|
|
||||
Total costs and expenses
|
579,279
|
|
|
491,428
|
|
|
1,091,177
|
|
|
935,304
|
|
||||
Income from operations
|
172,878
|
|
|
52,707
|
|
|
301,779
|
|
|
323,549
|
|
||||
Interest expense, net
|
(10,106
|
)
|
|
(14,664
|
)
|
|
(21,203
|
)
|
|
(31,429
|
)
|
||||
Other income (expense), net
|
53,819
|
|
|
(2,537
|
)
|
|
150,657
|
|
|
(3,081
|
)
|
||||
Income before provision for (benefit from) income taxes
|
216,591
|
|
|
35,506
|
|
|
431,233
|
|
|
289,039
|
|
||||
Provision for (benefit from) income taxes
|
10,341
|
|
|
4,337
|
|
|
(2,318
|
)
|
|
8,322
|
|
||||
Net income
|
206,250
|
|
|
31,169
|
|
|
433,551
|
|
|
280,717
|
|
||||
Loss (income) attributable to noncontrolling interest
|
1,110
|
|
|
(13,173
|
)
|
|
(15,928
|
)
|
|
(14,965
|
)
|
||||
Net income attributable to Vertex
|
$
|
207,360
|
|
|
$
|
17,996
|
|
|
$
|
417,623
|
|
|
$
|
265,752
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts per share attributable to Vertex common shareholders:
|
|
|
|
|
|
|
|
||||||||
Net income:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.82
|
|
|
$
|
0.07
|
|
|
$
|
1.65
|
|
|
$
|
1.08
|
|
Diluted
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
$
|
1.61
|
|
|
$
|
1.06
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
254,135
|
|
|
247,521
|
|
|
253,685
|
|
|
246,782
|
|
||||
Diluted
|
258,584
|
|
|
251,635
|
|
|
258,557
|
|
|
250,199
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
206,250
|
|
|
$
|
31,169
|
|
|
$
|
433,551
|
|
|
$
|
280,717
|
|
Changes in other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) on marketable securities, net of tax of zero, $1.0 million, zero and zero, respectively
|
373
|
|
|
(17,281
|
)
|
|
(87
|
)
|
|
(13,747
|
)
|
||||
Unrealized gains (losses) on foreign currency forward contracts, net of tax of $0.2 million, $1.1 million, $0.5 million and $2.0 million, respectively
|
25,895
|
|
|
(15,245
|
)
|
|
25,033
|
|
|
(21,926
|
)
|
||||
Foreign currency translation adjustment
|
8,870
|
|
|
(5,252
|
)
|
|
6,141
|
|
|
(7,253
|
)
|
||||
Total changes in other comprehensive income (loss)
|
35,138
|
|
|
(37,778
|
)
|
|
31,087
|
|
|
(42,926
|
)
|
||||
Comprehensive income (loss)
|
241,388
|
|
|
(6,609
|
)
|
|
464,638
|
|
|
237,791
|
|
||||
Comprehensive loss (income) attributable to noncontrolling interest
|
1,110
|
|
|
(13,173
|
)
|
|
(15,928
|
)
|
|
(14,965
|
)
|
||||
Comprehensive income (loss) attributable to Vertex
|
$
|
242,498
|
|
|
$
|
(19,782
|
)
|
|
$
|
448,710
|
|
|
$
|
222,826
|
|
|
June 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,145,359
|
|
|
$
|
1,665,412
|
|
Marketable securities
|
622,396
|
|
|
423,254
|
|
||
Restricted cash and cash equivalents (VIE)
|
8,510
|
|
|
1,489
|
|
||
Accounts receivable, net
|
393,439
|
|
|
281,343
|
|
||
Inventories
|
115,025
|
|
|
111,830
|
|
||
Prepaid expenses and other current assets
|
122,694
|
|
|
165,635
|
|
||
Total current assets
|
3,407,423
|
|
|
2,648,963
|
|
||
Property and equipment, net
|
815,928
|
|
|
789,437
|
|
||
Intangible assets
|
29,000
|
|
|
29,000
|
|
||
Goodwill
|
50,384
|
|
|
50,384
|
|
||
Other assets
|
32,651
|
|
|
28,230
|
|
||
Total assets
|
$
|
4,335,386
|
|
|
$
|
3,546,014
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
83,034
|
|
|
$
|
73,994
|
|
Accrued expenses
|
479,120
|
|
|
443,961
|
|
||
Capital lease obligations, current portion
|
15,060
|
|
|
22,531
|
|
||
Early access sales accrual
|
290,457
|
|
|
232,401
|
|
||
Other liabilities, current portion
|
59,629
|
|
|
34,373
|
|
||
Total current liabilities
|
927,300
|
|
|
807,260
|
|
||
Capital lease obligations, excluding current portion
|
15,030
|
|
|
20,496
|
|
||
Deferred tax liability
|
9,335
|
|
|
6,341
|
|
||
Construction financing lease obligation, excluding current portion
|
562,645
|
|
|
563,406
|
|
||
Advance from collaborator, excluding current portion
|
80,602
|
|
|
78,431
|
|
||
Other liabilities, excluding current portion
|
25,591
|
|
|
27,774
|
|
||
Total liabilities
|
1,620,503
|
|
|
1,503,708
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 500,000,000 shares authorized, 254,882,837 and 253,253,362 shares issued and outstanding, respectively
|
2,542
|
|
|
2,512
|
|
||
Additional paid-in capital
|
7,357,042
|
|
|
7,157,362
|
|
||
Accumulated other comprehensive loss
|
(4,605
|
)
|
|
(11,572
|
)
|
||
Accumulated deficit
|
(4,668,751
|
)
|
|
(5,119,723
|
)
|
||
Total Vertex shareholders’ equity
|
2,686,228
|
|
|
2,028,579
|
|
||
Noncontrolling interest
|
28,655
|
|
|
13,727
|
|
||
Total shareholders’ equity
|
2,714,883
|
|
|
2,042,306
|
|
||
Total liabilities and shareholders’ equity
|
$
|
4,335,386
|
|
|
$
|
3,546,014
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated Deficit
|
|
Total Vertex
Shareholders’ Equity |
|
Noncontrolling
Interest |
|
Total
Shareholders’ Equity |
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2016
|
248,301
|
|
|
$
|
2,450
|
|
|
$
|
6,506,795
|
|
|
$
|
21,173
|
|
|
$
|
(5,373,836
|
)
|
|
$
|
1,156,582
|
|
|
$
|
181,609
|
|
|
$
|
1,338,191
|
|
Cumulative effect adjustment for adoption of new accounting guidance
|
—
|
|
|
—
|
|
|
9,371
|
|
|
—
|
|
|
(9,371
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,926
|
)
|
|
—
|
|
|
(42,926
|
)
|
|
—
|
|
|
(42,926
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
265,752
|
|
|
265,752
|
|
|
14,965
|
|
|
280,717
|
|
|||||||
Issuance of common stock under benefit plans
|
2,469
|
|
|
29
|
|
|
147,979
|
|
|
—
|
|
|
—
|
|
|
148,008
|
|
|
—
|
|
|
148,008
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
143,857
|
|
|
—
|
|
|
—
|
|
|
143,857
|
|
|
—
|
|
|
143,857
|
|
|||||||
Other VIE activity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(616
|
)
|
|
(616
|
)
|
|||||||
Balance at June 30, 2017
|
250,770
|
|
|
$
|
2,479
|
|
|
$
|
6,808,002
|
|
|
$
|
(21,753
|
)
|
|
$
|
(5,117,455
|
)
|
|
$
|
1,671,273
|
|
|
$
|
195,958
|
|
|
$
|
1,867,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2017
|
253,253
|
|
|
$
|
2,512
|
|
|
$
|
7,157,362
|
|
|
$
|
(11,572
|
)
|
|
$
|
(5,119,723
|
)
|
|
$
|
2,028,579
|
|
|
$
|
13,727
|
|
|
$
|
2,042,306
|
|
Cumulative effect adjustment for adoption of new accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,120
|
)
|
|
33,349
|
|
|
9,229
|
|
|
—
|
|
|
9,229
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
31,087
|
|
|
—
|
|
|
31,087
|
|
|
—
|
|
|
31,087
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
417,623
|
|
|
417,623
|
|
|
15,928
|
|
|
433,551
|
|
|||||||
Repurchases of common stock
|
(768
|
)
|
|
(8
|
)
|
|
(119,026
|
)
|
|
—
|
|
|
—
|
|
|
(119,034
|
)
|
|
—
|
|
|
(119,034
|
)
|
|||||||
Issuance of common stock under benefit plans
|
2,398
|
|
|
38
|
|
|
157,589
|
|
|
—
|
|
|
—
|
|
|
157,627
|
|
|
—
|
|
|
157,627
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
161,117
|
|
|
—
|
|
|
—
|
|
|
161,117
|
|
|
—
|
|
|
161,117
|
|
|||||||
Other VIE activity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,000
|
)
|
|
(1,000
|
)
|
|||||||
Balance at June 30, 2018
|
254,883
|
|
|
$
|
2,542
|
|
|
$
|
7,357,042
|
|
|
$
|
(4,605
|
)
|
|
$
|
(4,668,751
|
)
|
|
$
|
2,686,228
|
|
|
$
|
28,655
|
|
|
$
|
2,714,883
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
433,551
|
|
|
$
|
280,717
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Stock-based compensation expense
|
160,572
|
|
|
142,534
|
|
||
Depreciation expense
|
34,402
|
|
|
29,740
|
|
||
Write-downs of inventories to net realizable value
|
6,928
|
|
|
9,479
|
|
||
Deferred income taxes
|
3,516
|
|
|
4,626
|
|
||
Impairment of property and equipment
|
—
|
|
|
1,946
|
|
||
Unrealized gain on equity securities
|
(149,376
|
)
|
|
—
|
|
||
Other non-cash items, net
|
10,014
|
|
|
(4,834
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(88,166
|
)
|
|
(49,767
|
)
|
||
Inventories
|
(9,366
|
)
|
|
(22,998
|
)
|
||
Prepaid expenses and other assets
|
33,408
|
|
|
(39,531
|
)
|
||
Accounts payable
|
12,229
|
|
|
14,047
|
|
||
Accrued expenses and other liabilities
|
126,648
|
|
|
81,386
|
|
||
Net cash provided by operating activities
|
574,360
|
|
|
447,345
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of marketable securities
|
(202,002
|
)
|
|
(377,667
|
)
|
||
Maturities of marketable securities
|
171,028
|
|
|
168,882
|
|
||
Expenditures for property and equipment
|
(58,891
|
)
|
|
(28,477
|
)
|
||
Investment in equity securities
|
(21,500
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(111,365
|
)
|
|
(237,262
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Issuances of common stock under benefit plans
|
144,837
|
|
|
147,887
|
|
||
Repurchase of common stock
|
(115,033
|
)
|
|
—
|
|
||
Payments on revolving credit facility
|
—
|
|
|
(300,000
|
)
|
||
Advance from collaborator
|
5,000
|
|
|
7,500
|
|
||
Payments on capital lease obligations
|
(14,061
|
)
|
|
(10,637
|
)
|
||
Proceeds related to construction financing lease obligation
|
9,566
|
|
|
—
|
|
||
Repayments of advanced funding
|
(2,412
|
)
|
|
(2,044
|
)
|
||
Other financing activities
|
(149
|
)
|
|
(238
|
)
|
||
Net cash provided by (used in) financing activities
|
27,748
|
|
|
(157,532
|
)
|
||
Effect of changes in exchange rates on cash
|
(4,201
|
)
|
|
3,500
|
|
||
Net increase in cash and cash equivalents
|
486,542
|
|
|
56,051
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
1,667,526
|
|
|
1,231,707
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
2,154,068
|
|
|
$
|
1,287,758
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
33,444
|
|
|
$
|
35,003
|
|
Cash paid for income taxes
|
$
|
7,069
|
|
|
$
|
2,218
|
|
Capitalization of costs related to construction financing lease obligation
|
$
|
5,176
|
|
|
$
|
38,930
|
|
Issuances of common stock from employee benefit plans receivable
|
$
|
13,634
|
|
|
$
|
188
|
|
Accrued share repurchase liability
|
$
|
4,001
|
|
|
$
|
—
|
|
|
Balance as of
|
|
|
|
Balance as of
|
||||||
|
December 31, 2017
|
|
Adjustments
|
|
January 1, 2018
|
||||||
Assets
|
(in thousands)
|
||||||||||
Accounts receivable, net
|
$
|
281,343
|
|
|
$
|
29,881
|
|
|
$
|
311,224
|
|
Inventories
|
111,830
|
|
|
(90
|
)
|
|
111,740
|
|
|||
Prepaid expenses and other current assets
|
165,635
|
|
|
(17,166
|
)
|
|
148,469
|
|
|||
Total assets
|
$
|
3,546,014
|
|
|
$
|
12,625
|
|
|
$
|
3,558,639
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|||||
Accrued expenses
|
$
|
443,961
|
|
|
$
|
8,586
|
|
|
$
|
452,547
|
|
Early access sales accrual
|
232,401
|
|
|
(7,273
|
)
|
|
225,128
|
|
|||
Other liabilities, current portion
|
34,373
|
|
|
2,083
|
|
|
36,456
|
|
|||
Accumulated other comprehensive loss
|
(11,572
|
)
|
|
949
|
|
|
(10,623
|
)
|
|||
Accumulated deficit
|
(5,119,723
|
)
|
|
8,280
|
|
|
(5,111,443
|
)
|
|||
Total liabilities and shareholders’ equity
|
$
|
3,546,014
|
|
|
$
|
12,625
|
|
|
$
|
3,558,639
|
|
|
As of June 30, 2018
|
||||||||||
|
As Reported
under ASC 606 |
|
Balances
without Adoption of ASC 606 |
|
Effect of Change
Higher/(Lower) |
||||||
Assets
|
(in thousands)
|
||||||||||
Accounts receivable, net
|
$
|
393,439
|
|
|
$
|
359,103
|
|
|
$
|
34,336
|
|
Inventories
|
115,025
|
|
|
115,117
|
|
|
(92
|
)
|
|||
Prepaid expenses and other current assets
|
122,694
|
|
|
142,704
|
|
|
(20,010
|
)
|
|||
Total assets
|
$
|
4,335,386
|
|
|
$
|
4,321,152
|
|
|
$
|
14,234
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
||||
Accrued expenses
|
$
|
479,120
|
|
|
$
|
480,892
|
|
|
$
|
(1,772
|
)
|
Early access sales accrual
|
290,457
|
|
|
303,637
|
|
|
(13,180
|
)
|
|||
Other liabilities, current portion
|
59,629
|
|
|
44,295
|
|
|
15,334
|
|
|||
Accumulated other comprehensive loss
|
(4,605
|
)
|
|
(4,801
|
)
|
|
196
|
|
|||
Accumulated deficit
|
(4,668,751
|
)
|
|
(4,682,407
|
)
|
|
13,656
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
4,335,386
|
|
|
$
|
4,321,152
|
|
|
$
|
14,234
|
|
|
Three Months Ended June 30, 2018
|
||||||||||
|
As Reported
under ASC 606 |
|
Balances
without Adoption of ASC 606 |
|
Effect of Change
Higher/(Lower) |
||||||
|
(in thousands)
|
||||||||||
Product revenues, net
|
$
|
749,912
|
|
|
$
|
745,975
|
|
|
$
|
3,937
|
|
Cost of sales
|
104,382
|
|
|
102,688
|
|
|
1,694
|
|
|||
Income from operations
|
172,878
|
|
|
170,635
|
|
|
2,243
|
|
|||
Net income attributable to Vertex
|
$
|
207,360
|
|
|
$
|
205,117
|
|
|
$
|
2,243
|
|
|
|
|
|
|
|
||||||
Amounts per share attributable to Vertex common shareholders:
|
|
|
|
|
|
||||||
Net income:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
0.01
|
|
Diluted
|
$
|
0.80
|
|
|
$
|
0.79
|
|
|
$
|
0.01
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
|
As Reported
under ASC 606
|
|
Balances
without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower) |
||||||
|
(in thousands)
|
||||||||||
Product revenues, net
|
$
|
1,387,641
|
|
|
$
|
1,379,039
|
|
|
$
|
8,602
|
|
Cost of sales
|
175,995
|
|
|
172,769
|
|
|
3,226
|
|
|||
Income from operations
|
301,779
|
|
|
296,403
|
|
|
5,376
|
|
|||
Net income attributable to Vertex
|
$
|
417,623
|
|
|
$
|
412,247
|
|
|
$
|
5,376
|
|
|
|
|
|
|
|
||||||
Amounts per share attributable to Vertex common shareholders:
|
|
|
|
|
|
||||||
Net income:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.65
|
|
|
$
|
1.62
|
|
|
$
|
0.03
|
|
Diluted
|
$
|
1.61
|
|
|
$
|
1.59
|
|
|
$
|
0.02
|
|
|
Six Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2017
|
||||||||||||
|
Beginning of period
|
|
End of period
|
|
Beginning of period
|
|
End of period
|
||||||||
|
|
||||||||||||||
Cash and cash equivalents
|
$
|
1,665,412
|
|
|
$
|
2,145,359
|
|
|
$
|
1,183,945
|
|
|
$
|
1,223,130
|
|
Restricted cash and cash equivalents (VIE)
|
1,489
|
|
|
8,510
|
|
|
47,762
|
|
|
64,628
|
|
||||
Prepaid expenses and other current assets
|
625
|
|
|
199
|
|
|
—
|
|
|
—
|
|
||||
Cash, cash equivalents and restricted cash per statement of cash flows
|
$
|
1,667,526
|
|
|
$
|
2,154,068
|
|
|
$
|
1,231,707
|
|
|
$
|
1,287,758
|
|
B.
|
Revenue Recognition
|
|
Balance at January 1, 2018
(ASC 606 adoption)
|
|
Additions
|
|
Deductions
|
|
Balance at June 30, 2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Contract liabilities:
|
|
|
|
|
|
|
|
||||||||
Other liabilities, current portion
|
$
|
1,654
|
|
|
$
|
34,513
|
|
|
$
|
(3,736
|
)
|
|
$
|
32,431
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30, 2018
|
||||||||||||
|
2018 (as reported under ASC 606)
|
|
2017 (as reported under ASC 605)
|
|
2018 (as reported under ASC 606)
|
|
2017 (as reported under ASC 605)
|
||||||||
|
(in thousands)
|
||||||||||||||
KALYDECO
|
$
|
253,093
|
|
|
$
|
189,633
|
|
|
$
|
502,632
|
|
|
$
|
375,348
|
|
ORKAMBI
|
311,261
|
|
|
324,407
|
|
|
665,327
|
|
|
619,268
|
|
||||
SYMDEKO
|
185,558
|
|
|
—
|
|
|
219,682
|
|
|
—
|
|
||||
Other
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Total product revenues, net
|
$
|
749,912
|
|
|
$
|
513,988
|
|
|
$
|
1,387,641
|
|
|
$
|
994,610
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30, 2018
|
||||||||||||
|
2018 (as reported under ASC 606)
|
|
2017 (as reported under ASC 605)
|
|
2018 (as reported under ASC 606)
|
|
2017 (as reported under ASC 605)
|
||||||||
|
(in thousands)
|
||||||||||||||
United States
|
$
|
584,811
|
|
|
$
|
429,804
|
|
|
$
|
1,067,478
|
|
|
$
|
1,028,930
|
|
Outside of the United States
|
|
|
|
|
|
|
|
||||||||
Europe
|
135,914
|
|
|
91,992
|
|
|
267,809
|
|
|
184,350
|
|
||||
Other
|
31,432
|
|
|
22,339
|
|
|
57,669
|
|
|
45,573
|
|
||||
Total revenues outside of the United States
|
167,346
|
|
|
114,331
|
|
|
325,478
|
|
|
229,923
|
|
||||
Total revenues
|
$
|
752,157
|
|
|
$
|
544,135
|
|
|
$
|
1,392,956
|
|
|
$
|
1,258,853
|
|
C.
|
Collaborative Arrangements and Acquisitions
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Loss (income) attributable to noncontrolling interest before (benefit from) provision for income taxes and changes in fair value of contingent payments
|
$
|
426
|
|
|
$
|
(18,045
|
)
|
|
$
|
983
|
|
|
$
|
(16,498
|
)
|
(Benefit from) provision for income taxes
|
(416
|
)
|
|
8,132
|
|
|
5,989
|
|
|
8,523
|
|
||||
Decrease (increase) in fair value of contingent payments
|
1,100
|
|
|
(3,260
|
)
|
|
(22,900
|
)
|
|
(6,990
|
)
|
||||
Net loss (income) attributable to noncontrolling interest
|
$
|
1,110
|
|
|
$
|
(13,173
|
)
|
|
$
|
(15,928
|
)
|
|
$
|
(14,965
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Parion
|
$
|
—
|
|
|
$
|
(3,260
|
)
|
|
$
|
—
|
|
|
$
|
(6,090
|
)
|
BioAxone
|
1,100
|
|
|
—
|
|
|
(22,900
|
)
|
|
(900
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Restricted cash and cash equivalents (VIE)
|
$
|
8,510
|
|
|
$
|
1,489
|
|
Intangible assets
|
29,000
|
|
|
29,000
|
|
||
Deferred tax liability
|
9,335
|
|
|
4,756
|
|
||
Noncontrolling interest
|
28,655
|
|
|
13,727
|
|
D.
|
Earnings Per Share
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Basic net income attributable to Vertex per common share calculation:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Vertex common shareholders
|
$
|
207,360
|
|
|
$
|
17,996
|
|
|
$
|
417,623
|
|
|
$
|
265,752
|
|
Less: Undistributed earnings allocated to participating securities
|
(65
|
)
|
|
(23
|
)
|
|
(163
|
)
|
|
(387
|
)
|
||||
Net income attributable to Vertex common shareholders—basic
|
$
|
207,295
|
|
|
$
|
17,973
|
|
|
$
|
417,460
|
|
|
$
|
265,365
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
254,135
|
|
|
247,521
|
|
|
253,685
|
|
|
246,782
|
|
||||
Basic net income attributable to Vertex per common share
|
$
|
0.82
|
|
|
$
|
0.07
|
|
|
$
|
1.65
|
|
|
$
|
1.08
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income attributable to Vertex per common share calculation:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Vertex common shareholders
|
$
|
207,360
|
|
|
$
|
17,996
|
|
|
$
|
417,623
|
|
|
$
|
265,752
|
|
Less: Undistributed earnings allocated to participating securities
|
(64
|
)
|
|
(23
|
)
|
|
(160
|
)
|
|
(382
|
)
|
||||
Net income attributable to Vertex common shareholders—diluted
|
$
|
207,296
|
|
|
$
|
17,973
|
|
|
$
|
417,463
|
|
|
$
|
265,370
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used to compute basic net income per common share
|
254,135
|
|
|
247,521
|
|
|
253,685
|
|
|
246,782
|
|
||||
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
2,758
|
|
|
2,787
|
|
|
3,003
|
|
|
2,407
|
|
||||
Restricted stock and restricted stock units (including PSUs)
|
1,689
|
|
|
1,264
|
|
|
1,851
|
|
|
958
|
|
||||
Employee stock purchase program
|
2
|
|
|
63
|
|
|
18
|
|
|
52
|
|
||||
Weighted-average shares used to compute diluted net income per common share
|
258,584
|
|
|
251,635
|
|
|
258,557
|
|
|
250,199
|
|
||||
Diluted net income attributable to Vertex per common share
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
$
|
1.61
|
|
|
$
|
1.06
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||||||
Stock options
|
2,253
|
|
|
3,112
|
|
|
1,943
|
|
|
7,065
|
|
Unvested restricted stock and restricted stock units (including PSUs)
|
6
|
|
|
6
|
|
|
5
|
|
|
32
|
|
E.
|
Fair Value Measurements
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3:
|
Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
|
|
Fair Value Measurements as of June 30, 2018
|
||||||||||||||
|
|
|
Fair Value Hierarchy
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Financial instruments carried at fair value (asset position):
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
971,044
|
|
|
$
|
971,044
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government-sponsored enterprise securities
|
10,982
|
|
|
10,982
|
|
|
—
|
|
|
—
|
|
||||
Commercial paper
|
21,263
|
|
|
—
|
|
|
21,263
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
242,775
|
|
|
242,775
|
|
|
—
|
|
|
—
|
|
||||
U.S. Treasury securities
|
11,020
|
|
|
11,020
|
|
|
—
|
|
|
—
|
|
||||
Government-sponsored enterprise securities
|
2,491
|
|
|
2,491
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities
|
232,704
|
|
|
—
|
|
|
232,704
|
|
|
—
|
|
||||
Commercial paper
|
133,406
|
|
|
—
|
|
|
133,406
|
|
|
—
|
|
||||
Prepaid and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
10,812
|
|
|
—
|
|
|
10,812
|
|
|
—
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
1,451
|
|
|
—
|
|
|
1,451
|
|
|
—
|
|
||||
Total financial assets
|
$
|
1,637,948
|
|
|
$
|
1,238,312
|
|
|
$
|
399,636
|
|
|
$
|
—
|
|
Financial instruments carried at fair value (liability position):
|
|
|
|
|
|
|
|
||||||||
Other liabilities, current portion:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(1,948
|
)
|
|
$
|
—
|
|
|
$
|
(1,948
|
)
|
|
$
|
—
|
|
Other liabilities, excluding current portion:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
(299
|
)
|
|
—
|
|
|
(299
|
)
|
|
—
|
|
||||
Total financial liabilities
|
$
|
(2,247
|
)
|
|
$
|
—
|
|
|
$
|
(2,247
|
)
|
|
$
|
—
|
|
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||||
|
|
|
Fair Value Hierarchy
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Financial instruments carried at fair value (asset position):
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
614,951
|
|
|
$
|
614,951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government-sponsored enterprise securities
|
12,678
|
|
|
12,678
|
|
|
—
|
|
|
—
|
|
||||
Commercial paper
|
57,357
|
|
|
—
|
|
|
57,357
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
74,821
|
|
|
74,821
|
|
|
—
|
|
|
—
|
|
||||
Government-sponsored enterprise securities
|
2,303
|
|
|
2,303
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities
|
265,867
|
|
|
—
|
|
|
265,867
|
|
|
—
|
|
||||
Commercial paper
|
80,263
|
|
|
—
|
|
|
80,263
|
|
|
—
|
|
||||
Prepaid and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Total financial assets
|
$
|
1,108,253
|
|
|
$
|
704,753
|
|
|
$
|
403,500
|
|
|
$
|
—
|
|
Financial instruments carried at fair value (liability position):
|
|
|
|
|
|
|
|
||||||||
Other liabilities, current portion:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(13,642
|
)
|
|
$
|
—
|
|
|
$
|
(13,642
|
)
|
|
$
|
—
|
|
Other liabilities, excluding current portion:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
(866
|
)
|
|
—
|
|
|
(866
|
)
|
|
—
|
|
||||
Total financial liabilities
|
$
|
(14,508
|
)
|
|
$
|
—
|
|
|
$
|
(14,508
|
)
|
|
$
|
—
|
|
F.
|
Marketable Securities and Equity Investments
|
|
Amortized Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
As of June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
971,044
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
971,044
|
|
Government-sponsored enterprise securities
|
10,981
|
|
|
1
|
|
|
—
|
|
|
10,982
|
|
||||
Commercial paper
|
21,270
|
|
|
—
|
|
|
(7
|
)
|
|
21,263
|
|
||||
Total cash equivalents
|
1,003,295
|
|
|
1
|
|
|
(7
|
)
|
|
1,003,289
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities (matures within 1 year)
|
11,022
|
|
|
—
|
|
|
(2
|
)
|
|
11,020
|
|
||||
Government-sponsored enterprise securities (matures within 1 year)
|
2,491
|
|
|
—
|
|
|
—
|
|
|
2,491
|
|
||||
Corporate debt securities (matures within 1 year)
|
178,692
|
|
|
—
|
|
|
(564
|
)
|
|
178,128
|
|
||||
Corporate debt securities (matures after 1 year through 5 years)
|
54,613
|
|
|
1
|
|
|
(38
|
)
|
|
54,576
|
|
||||
Commercial paper (matures within 1 year)
|
133,478
|
|
|
4
|
|
|
(76
|
)
|
|
133,406
|
|
||||
Total marketable debt securities
|
380,296
|
|
|
5
|
|
|
(680
|
)
|
|
379,621
|
|
||||
Corporate equity securities
|
64,713
|
|
|
178,062
|
|
|
—
|
|
|
242,775
|
|
||||
Total marketable securities
|
$
|
445,009
|
|
|
$
|
178,067
|
|
|
$
|
(680
|
)
|
|
$
|
622,396
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
614,951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
614,951
|
|
Government-sponsored enterprise securities
|
12,679
|
|
|
—
|
|
|
(1
|
)
|
|
12,678
|
|
||||
Commercial paper
|
57,371
|
|
|
—
|
|
|
(14
|
)
|
|
57,357
|
|
||||
Total cash equivalents
|
685,001
|
|
|
—
|
|
|
(15
|
)
|
|
684,986
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Government-sponsored enterprise securities (matures within 1 year)
|
2,304
|
|
|
—
|
|
|
(1
|
)
|
|
2,303
|
|
||||
Corporate debt securities (matures within 1 year)
|
215,639
|
|
|
—
|
|
|
(363
|
)
|
|
215,276
|
|
||||
Corporate debt securities (matures after 1 year through 5 years)
|
50,697
|
|
|
—
|
|
|
(106
|
)
|
|
50,591
|
|
||||
Commercial paper (matures within 1 year)
|
80,372
|
|
|
—
|
|
|
(109
|
)
|
|
80,263
|
|
||||
Total marketable debt securities
|
349,012
|
|
|
—
|
|
|
(579
|
)
|
|
348,433
|
|
||||
Available-for-sale corporate equity securities
|
43,213
|
|
|
31,608
|
|
|
—
|
|
|
74,821
|
|
||||
Total marketable securities
|
$
|
392,225
|
|
|
$
|
31,608
|
|
|
$
|
(579
|
)
|
|
$
|
423,254
|
|
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
1,003,289
|
|
|
$
|
684,986
|
|
Marketable securities
|
379,621
|
|
|
348,433
|
|
||
Total
|
$
|
1,382,910
|
|
|
$
|
1,033,419
|
|
•
|
$53.9 million
and
$146.5 million
, respectively, related to its equity investment in CRISPR, a publicly traded company. The CRISPR common stock held by the Company has a readily determinable fair value that is recorded in “
Marketable securities
” on the Company’s condensed consolidated balance sheets. In January 2018, the Company purchased an additional
$21.5 million
of CRISPR’s common shares.
|
•
|
Zero
and
$2.9 million
, respectively, related to its equity investment in Moderna, which is not a publicly traded company that has a readily determinable fair value for its stock. The Company increased the carrying value of its investment in Moderna, which is recorded in “
Other assets
” on its condensed consolidated balance sheets, to
$23.0 million
as of
June 30, 2018
based on an observable price increase for additional shares privately issued by Moderna in an orderly transaction between market participants in the first quarter of 2018.
|
G.
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
Unrealized Holding Gains (Losses), Net of Tax
|
|
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
On Available-For-Sale Debt Securities
|
|
On Equity Securities
|
|
On Foreign Currency Forward Contracts
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance at December 31, 2017
|
$
|
(21,031
|
)
|
|
$
|
(594
|
)
|
|
$
|
25,069
|
|
|
$
|
(15,016
|
)
|
|
$
|
(11,572
|
)
|
Other comprehensive income before reclassifications
|
6,141
|
|
|
(87
|
)
|
|
—
|
|
|
15,352
|
|
|
21,406
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
9,681
|
|
|
9,681
|
|
|||||
Net current period other comprehensive income (loss)
|
$
|
6,141
|
|
|
$
|
(87
|
)
|
|
$
|
—
|
|
|
$
|
25,033
|
|
|
$
|
31,087
|
|
Amounts reclassified to accumulated deficit pursuant to adoption of new accounting standard
|
949
|
|
|
—
|
|
|
(25,069
|
)
|
|
—
|
|
|
(24,120
|
)
|
|||||
Balance at June 30, 2018
|
$
|
(13,941
|
)
|
|
$
|
(681
|
)
|
|
$
|
—
|
|
|
$
|
10,017
|
|
|
$
|
(4,605
|
)
|
|
|
|
Unrealized Holding Gains (Losses), Net of Tax
|
|
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
On Available-For-Sale Debt Securities
|
|
On Equity Securities
|
|
On Foreign Currency Forward Contracts
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance at December 31, 2016
|
$
|
(7,862
|
)
|
|
$
|
(10
|
)
|
|
$
|
17,531
|
|
|
$
|
11,514
|
|
|
$
|
21,173
|
|
Other comprehensive (loss) income before reclassifications
|
(7,253
|
)
|
|
(236
|
)
|
|
(13,511
|
)
|
|
(17,215
|
)
|
|
(38,215
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,711
|
)
|
|
(4,711
|
)
|
|||||
Net current period other comprehensive (loss) income
|
$
|
(7,253
|
)
|
|
$
|
(236
|
)
|
|
$
|
(13,511
|
)
|
|
$
|
(21,926
|
)
|
|
$
|
(42,926
|
)
|
Balance at June 30, 2017
|
$
|
(15,115
|
)
|
|
$
|
(246
|
)
|
|
$
|
4,020
|
|
|
$
|
(10,412
|
)
|
|
$
|
(21,753
|
)
|
H.
|
Hedging
|
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||
Foreign Currency
|
(in thousands)
|
||||||
Euro
|
$
|
317,429
|
|
|
$
|
257,230
|
|
British pound sterling
|
71,288
|
|
|
77,481
|
|
||
Australian dollar
|
31,853
|
|
|
30,501
|
|
||
Canadian dollar
|
32,789
|
|
|
—
|
|
||
Total foreign currency forward contracts
|
$
|
453,359
|
|
|
$
|
365,212
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Designated as hedging instruments - Reclassified from AOCI
|
|
|
|
|
|
|
|
||||||||
Product revenues, net
|
$
|
(2,675
|
)
|
|
$
|
1,973
|
|
|
$
|
(9,159
|
)
|
|
$
|
6,752
|
|
Not designated as hedging instruments
|
|
|
|
|
|
|
|
||||||||
Other income (expense), net
|
$
|
(4,152
|
)
|
|
$
|
5,304
|
|
|
$
|
(2,614
|
)
|
|
$
|
8,823
|
|
As of June 30, 2018
|
||||||||||
Assets
|
|
Liabilities
|
||||||||
Classification
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
||||
(in thousands)
|
||||||||||
Designated as hedging instruments
|
|
|
|
|
|
|
||||
Prepaid expenses and other current assets
|
|
$
|
10,812
|
|
|
Other liabilities, current portion
|
|
$
|
(1,948
|
)
|
Other assets
|
|
1,451
|
|
|
Other liabilities, excluding current portion
|
|
(299
|
)
|
||
Not designated as hedging instruments
|
|
|
|
|
|
|
||||
Prepaid expenses and other current assets
|
|
206
|
|
|
Other liabilities, current portion
|
|
—
|
|
||
Total assets
|
|
$
|
12,469
|
|
|
Total liabilities
|
|
$
|
(2,247
|
)
|
As of December 31, 2017
|
||||||||||
Assets
|
|
Liabilities
|
||||||||
Classification
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
||||
(in thousands)
|
||||||||||
Designated as hedging instruments
|
|
|
|
|
|
|
||||
Prepaid expenses and other current assets
|
|
$
|
13
|
|
|
Other liabilities, current portion
|
|
$
|
(13,642
|
)
|
Other assets
|
|
—
|
|
|
Other liabilities, excluding current portion
|
|
(866
|
)
|
||
Not designated as hedging instruments
|
|
|
|
|
|
|
||||
Prepaid expenses and other current assets
|
|
—
|
|
|
Other liabilities, current portion
|
|
(684
|
)
|
||
Total assets
|
|
$
|
13
|
|
|
Total liabilities
|
|
$
|
(15,192
|
)
|
|
As of June 30, 2018
|
||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Gross Amounts Presented
|
|
Gross Amounts Not Offset
|
|
Legal Offset
|
||||||||||
Foreign currency forward contracts
|
(in thousands)
|
||||||||||||||||||
Total assets
|
$
|
12,263
|
|
|
$
|
—
|
|
|
$
|
12,263
|
|
|
$
|
(2,247
|
)
|
|
$
|
10,016
|
|
Total liabilities
|
$
|
(2,247
|
)
|
|
$
|
—
|
|
|
$
|
(2,247
|
)
|
|
$
|
2,247
|
|
|
$
|
—
|
|
|
As of December 31, 2017
|
||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Gross Amounts Presented
|
|
Gross Amounts Not Offset
|
|
Legal Offset
|
||||||||||
Foreign currency forward contracts
|
(in thousands)
|
||||||||||||||||||
Total assets
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
Total liabilities
|
$
|
(14,508
|
)
|
|
$
|
—
|
|
|
$
|
(14,508
|
)
|
|
$
|
13
|
|
|
$
|
(14,495
|
)
|
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
16,124
|
|
|
$
|
20,924
|
|
Work-in-process
|
74,818
|
|
|
74,237
|
|
||
Finished goods
|
24,083
|
|
|
16,669
|
|
||
Total
|
$
|
115,025
|
|
|
$
|
111,830
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Property and equipment, net
|
|
|
|
||||
Fan Pier Buildings
|
$
|
469,508
|
|
|
$
|
475,725
|
|
San Diego Building
|
$
|
116,738
|
|
|
$
|
94,602
|
|
|
|
|
|
||||
Construction financing lease obligation
|
|
|
|
||||
Fan Pier Buildings
|
$
|
471,797
|
|
|
$
|
472,070
|
|
San Diego Building
|
$
|
93,879
|
|
|
$
|
87,392
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Stock-based compensation expense by type of award:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
$
|
28,591
|
|
|
$
|
27,915
|
|
|
$
|
54,646
|
|
|
$
|
54,896
|
|
Restricted stock and restricted stock units (including PSUs)
|
51,497
|
|
|
43,906
|
|
|
101,915
|
|
|
84,651
|
|
||||
ESPP share issuances
|
2,428
|
|
|
2,246
|
|
|
4,556
|
|
|
4,310
|
|
||||
Stock-based compensation expense related to inventories
|
(80
|
)
|
|
(972
|
)
|
|
(545
|
)
|
|
(1,323
|
)
|
||||
Total stock-based compensation included in costs and expenses
|
$
|
82,436
|
|
|
$
|
73,095
|
|
|
$
|
160,572
|
|
|
$
|
142,534
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock-based compensation expense by line item:
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
1,191
|
|
|
$
|
513
|
|
|
$
|
2,004
|
|
|
$
|
970
|
|
Research and development expenses
|
51,612
|
|
|
43,832
|
|
|
100,100
|
|
|
88,669
|
|
||||
Sales, general and administrative expenses
|
29,633
|
|
|
28,750
|
|
|
58,468
|
|
|
52,895
|
|
||||
Total stock-based compensation included in costs and expenses
|
$
|
82,436
|
|
|
$
|
73,095
|
|
|
$
|
160,572
|
|
|
$
|
142,534
|
|
|
As of June 30, 2018
|
||||
|
Unrecognized Expense
|
|
Weighted-average
Recognition Period |
||
|
(in thousands)
|
|
(in years)
|
||
Type of award:
|
|
|
|
||
Stock options
|
$
|
169,237
|
|
|
2.65
|
Restricted stock and restricted stock units (including PSUs)
|
$
|
343,132
|
|
|
2.57
|
ESPP share issuances
|
$
|
5,777
|
|
|
0.63
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Number
Outstanding |
|
Weighted-average
Remaining Contractual Life |
|
Weighted-average
Exercise Price |
|
Number
Exercisable |
|
Weighted-average
Exercise Price |
||||||
|
|
(in thousands)
|
|
(in years)
|
|
(per share)
|
|
(in thousands)
|
|
(per share)
|
||||||
$26.73–$40.00
|
|
707
|
|
|
1.37
|
|
$
|
34.48
|
|
|
707
|
|
|
$
|
34.48
|
|
$40.01–$60.00
|
|
557
|
|
|
4.01
|
|
$
|
49.57
|
|
|
557
|
|
|
$
|
49.57
|
|
$60.01–$80.00
|
|
615
|
|
|
5.75
|
|
$
|
75.16
|
|
|
603
|
|
|
$
|
75.15
|
|
$80.01–$100.00
|
|
3,441
|
|
|
7.70
|
|
$
|
89.36
|
|
|
1,336
|
|
|
$
|
90.09
|
|
$100.01–$120.00
|
|
874
|
|
|
6.61
|
|
$
|
109.28
|
|
|
613
|
|
|
$
|
109.17
|
|
$120.01–$140.00
|
|
1,034
|
|
|
7.13
|
|
$
|
130.42
|
|
|
702
|
|
|
$
|
130.36
|
|
$140.01–$160.00
|
|
1,500
|
|
|
9.59
|
|
$
|
155.52
|
|
|
132
|
|
|
$
|
155.02
|
|
$160.01–$163.74
|
|
584
|
|
|
9.02
|
|
$
|
162.94
|
|
|
114
|
|
|
$
|
162.94
|
|
Total
|
|
9,312
|
|
|
7.09
|
|
$
|
103.58
|
|
|
4,764
|
|
|
$
|
87.14
|
|
•
|
We have submitted a supplemental new drug application, or sNDA, to the FDA and an MAA line extension to the EMA for ivacaftor in patients with CF 12 months to two years of age. The target date for the FDA to complete its review of the sNDA under the Prescription Drug User Fee Act, or PDUFA, is August 15, 2018. We expect the EMA to complete its review in the first half of 2019.
|
•
|
We have submitted a new drug application, or NDA, to the FDA and an MAA line extension to the EMA for lumacaftor in combination with ivacaftor in patients with CF two to five years of age. The target date for the FDA to complete its review of the NDA under PDUFA is August 7, 2018. We expect the EMA to complete its review in the first half of 2019.
|
•
|
We have completed enrollment in a Phase 3 clinical trial evaluating tezacaftor in combination with ivacaftor in patients with CF six to eleven years of age who are F508del homozygous or who have at least one mutation in their
CFTR
gene that is responsive to tezacaftor/ivacaftor. We expect to receive data from this clinical trial in the second half of 2018.
|
•
|
We are evaluating ivacaftor in a Phase 3 clinical trial in patients with CF six to 12 months of age. We expect to receive data from this clinical trial in the second half of 2018.
|
•
|
We expect to commence a Phase 3 clinical trial evaluating lumacaftor in combination with ivacaftor in patients with CF 12 months to two years of age in the second half of 2018.
|
•
|
CRISPR, pursuant to which we are collaborating on the discovery and development of potential new treatments aimed at the underlying genetic causes of human diseases using CRISPR-Cas9 gene editing technology;
|
•
|
Moderna Therapeutics, Inc., or Moderna, pursuant to which we are seeking to identify and develop messenger ribonucleic acid, or mRNA therapeutics for the treatment of CF;
|
•
|
BioAxone, pursuant to which we are evaluating VX-210 as a potential treatment for patients who have spinal cord injuries; and
|
•
|
Parion Sciences, Inc., or Parion, pursuant to which we are developing epithelial sodium channel, or ENaC, inhibitors for the treatment of pulmonary diseases.
|
•
|
Janssen Pharmaceuticals, Inc., or Janssen, Inc., which is developing pimodivir (formerly VX-787) for the treatment of influenza; and
|
•
|
Merck KGaA, which licensed four oncology research and development programs from us in early 2017.
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Revenues
|
$
|
752,157
|
|
|
$
|
544,135
|
|
|
$
|
208,022
|
|
|
38
|
%
|
|
$
|
1,392,956
|
|
|
$
|
1,258,853
|
|
|
$
|
134,103
|
|
|
11
|
%
|
Operating costs and expenses
|
579,279
|
|
|
491,428
|
|
|
87,851
|
|
|
18
|
%
|
|
1,091,177
|
|
|
935,304
|
|
|
155,873
|
|
|
17
|
%
|
||||||
Other items, net
|
34,482
|
|
|
(34,711
|
)
|
|
69,193
|
|
|
n/a
|
|
|
115,844
|
|
|
(57,797
|
)
|
|
173,641
|
|
|
n/a
|
|
||||||
Net income attributable to Vertex
|
$
|
207,360
|
|
|
$
|
17,996
|
|
|
$
|
189,364
|
|
|
n/a
|
|
|
$
|
417,623
|
|
|
$
|
265,752
|
|
|
$
|
151,871
|
|
|
57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income per diluted share attributable to Vertex common shareholders
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
|
|
|
|
$
|
1.61
|
|
|
$
|
1.06
|
|
|
|
|
|
||||||
Diluted shares used in per share calculations
|
258,584
|
|
|
251,635
|
|
|
|
|
|
|
258,557
|
|
|
250,199
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Product revenues, net
|
$
|
749,912
|
|
|
$
|
513,988
|
|
|
$
|
235,924
|
|
|
46
|
%
|
|
$
|
1,387,641
|
|
|
$
|
994,610
|
|
|
$
|
393,031
|
|
|
40
|
%
|
Royalty revenues
|
1,085
|
|
|
2,861
|
|
|
(1,776
|
)
|
|
(62
|
)%
|
|
2,441
|
|
|
4,412
|
|
|
(1,971
|
)
|
|
(45
|
)%
|
||||||
Collaborative revenues
|
1,160
|
|
|
27,286
|
|
|
(26,126
|
)
|
|
(96
|
)%
|
|
2,874
|
|
|
259,831
|
|
|
(256,957
|
)
|
|
(99
|
)%
|
||||||
Total revenues
|
$
|
752,157
|
|
|
$
|
544,135
|
|
|
$
|
208,022
|
|
|
38
|
%
|
|
$
|
1,392,956
|
|
|
$
|
1,258,853
|
|
|
$
|
134,103
|
|
|
11
|
%
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
KALYDECO
|
$
|
253,093
|
|
|
$
|
189,633
|
|
|
$
|
63,460
|
|
|
33
|
%
|
|
$
|
502,632
|
|
|
$
|
375,348
|
|
|
$
|
127,284
|
|
|
34
|
%
|
ORKAMBI
|
311,261
|
|
|
324,407
|
|
|
(13,146
|
)
|
|
(4
|
)%
|
|
665,327
|
|
|
619,268
|
|
|
46,059
|
|
|
7
|
%
|
||||||
SYMDEKO
|
185,558
|
|
|
—
|
|
|
185,558
|
|
|
n/a
|
|
|
219,682
|
|
|
—
|
|
|
219,682
|
|
|
n/a
|
|
||||||
Total CF product revenues, net
|
$
|
749,912
|
|
|
$
|
514,040
|
|
|
$
|
235,872
|
|
|
46
|
%
|
|
$
|
1,387,641
|
|
|
$
|
994,616
|
|
|
$
|
393,025
|
|
|
40
|
%
|
`
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Cost of sales
|
$
|
104,382
|
|
|
$
|
71,205
|
|
|
$
|
33,177
|
|
|
47
|
%
|
|
$
|
175,995
|
|
|
$
|
118,193
|
|
|
$
|
57,802
|
|
|
49
|
%
|
Research and development expenses
|
337,532
|
|
|
289,451
|
|
|
48,081
|
|
|
17
|
%
|
|
648,085
|
|
|
563,014
|
|
|
85,071
|
|
|
15
|
%
|
||||||
Sales, general and administrative expenses
|
137,303
|
|
|
127,249
|
|
|
10,054
|
|
|
8
|
%
|
|
267,111
|
|
|
240,575
|
|
|
26,536
|
|
|
11
|
%
|
||||||
Restructuring expenses (income)
|
62
|
|
|
3,523
|
|
|
(3,461
|
)
|
|
(98
|
)%
|
|
(14
|
)
|
|
13,522
|
|
|
(13,536
|
)
|
|
(100
|
)%
|
||||||
Total costs and expenses
|
$
|
579,279
|
|
|
$
|
491,428
|
|
|
$
|
87,851
|
|
|
18
|
%
|
|
$
|
1,091,177
|
|
|
$
|
935,304
|
|
|
$
|
155,873
|
|
|
17
|
%
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Research expenses
|
$
|
86,015
|
|
|
$
|
77,222
|
|
|
$
|
8,793
|
|
|
11
|
%
|
|
$
|
163,957
|
|
|
$
|
150,278
|
|
|
$
|
13,679
|
|
|
9
|
%
|
Development expenses
|
251,517
|
|
|
212,229
|
|
|
39,288
|
|
|
19
|
%
|
|
484,128
|
|
|
412,736
|
|
|
71,392
|
|
|
17
|
%
|
||||||
Total research and development expenses
|
$
|
337,532
|
|
|
$
|
289,451
|
|
|
$
|
48,081
|
|
|
17
|
%
|
|
$
|
648,085
|
|
|
$
|
563,014
|
|
|
$
|
85,071
|
|
|
15
|
%
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Research Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Salary and benefits
|
$
|
21,245
|
|
|
$
|
19,508
|
|
|
$
|
1,737
|
|
|
9
|
%
|
|
$
|
45,333
|
|
|
$
|
41,041
|
|
|
$
|
4,292
|
|
|
10
|
%
|
Stock-based compensation expense
|
16,281
|
|
|
15,034
|
|
|
1,247
|
|
|
8
|
%
|
|
31,041
|
|
|
28,725
|
|
|
2,316
|
|
|
8
|
%
|
||||||
Laboratory supplies and other direct expenses
|
14,099
|
|
|
11,824
|
|
|
2,275
|
|
|
19
|
%
|
|
25,015
|
|
|
23,189
|
|
|
1,826
|
|
|
8
|
%
|
||||||
Outsourced services
|
10,949
|
|
|
12,077
|
|
|
(1,128
|
)
|
|
(9
|
)%
|
|
18,846
|
|
|
19,414
|
|
|
(568
|
)
|
|
(3
|
)%
|
||||||
Collaboration and asset acquisition payments
|
2,251
|
|
|
—
|
|
|
2,251
|
|
|
n/a
|
|
|
2,559
|
|
|
—
|
|
|
2,559
|
|
|
n/a
|
|
||||||
Infrastructure costs
|
21,188
|
|
|
18,779
|
|
|
2,409
|
|
|
13
|
%
|
|
41,161
|
|
|
37,909
|
|
|
3,252
|
|
|
9
|
%
|
||||||
Total research expenses
|
$
|
86,013
|
|
|
$
|
77,222
|
|
|
$
|
8,791
|
|
|
11
|
%
|
|
$
|
163,955
|
|
|
$
|
150,278
|
|
|
$
|
13,677
|
|
|
9
|
%
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Development Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Salary and benefits
|
$
|
53,789
|
|
|
$
|
46,363
|
|
|
$
|
7,426
|
|
|
16
|
%
|
|
$
|
110,791
|
|
|
$
|
95,334
|
|
|
$
|
15,457
|
|
|
16
|
%
|
Stock-based compensation expense
|
35,331
|
|
|
28,798
|
|
|
6,533
|
|
|
23
|
%
|
|
69,059
|
|
|
59,944
|
|
|
9,115
|
|
|
15
|
%
|
||||||
Laboratory supplies and other direct expenses
|
22,039
|
|
|
16,630
|
|
|
5,409
|
|
|
33
|
%
|
|
36,512
|
|
|
30,643
|
|
|
5,869
|
|
|
19
|
%
|
||||||
Outsourced services
|
93,459
|
|
|
88,855
|
|
|
4,604
|
|
|
5
|
%
|
|
178,178
|
|
|
162,040
|
|
|
16,138
|
|
|
10
|
%
|
||||||
Collaboration and asset acquisition payments
|
—
|
|
|
—
|
|
|
—
|
|
|
n/a
|
|
|
250
|
|
|
250
|
|
|
—
|
|
|
—
|
%
|
||||||
Drug supply costs
|
11,292
|
|
|
1,043
|
|
|
10,249
|
|
|
983
|
%
|
|
19,713
|
|
|
2,992
|
|
|
16,721
|
|
|
559
|
%
|
||||||
Infrastructure costs
|
35,609
|
|
|
30,540
|
|
|
5,069
|
|
|
17
|
%
|
|
69,627
|
|
|
61,533
|
|
|
8,094
|
|
|
13
|
%
|
||||||
Total development expenses
|
$
|
251,519
|
|
|
$
|
212,229
|
|
|
$
|
39,290
|
|
|
19
|
%
|
|
$
|
484,130
|
|
|
$
|
412,736
|
|
|
$
|
71,394
|
|
|
17
|
%
|
|
Three Months Ended June 30,
|
|
Increase/(Decrease)
|
|
Six Months Ended June 30,
|
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Sales, general and administrative expenses
|
$
|
137,303
|
|
|
$
|
127,249
|
|
|
$
|
10,054
|
|
|
8
|
%
|
|
$
|
267,111
|
|
|
$
|
240,575
|
|
|
$
|
26,536
|
|
|
11
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
|
|
|
||||||||||
Loss (income) attributable to noncontrolling interest before (benefit from) provision for income taxes and changes in fair value of contingent payments
|
$
|
426
|
|
|
$
|
(18,045
|
)
|
|
$
|
983
|
|
|
$
|
(16,498
|
)
|
(Benefit from) provision for income taxes
|
(416
|
)
|
|
8,132
|
|
|
5,989
|
|
|
8,523
|
|
||||
Decrease (increase) in fair value of contingent payments
|
1,100
|
|
|
(3,260
|
)
|
|
(22,900
|
)
|
|
(6,990
|
)
|
||||
Net loss (income) attributable to noncontrolling interest
|
$
|
1,110
|
|
|
$
|
(13,173
|
)
|
|
$
|
(15,928
|
)
|
|
$
|
(14,965
|
)
|
|
June 30,
|
|
December 31,
|
|
Increase/(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Cash, cash equivalents and marketable securities
|
$
|
2,767,755
|
|
|
$
|
2,088,666
|
|
|
$
|
679,089
|
|
|
33
|
%
|
Working Capital
|
|
|
|
|
|
|
|
|||||||
Total current assets
|
3,407,423
|
|
|
2,648,963
|
|
|
758,460
|
|
|
29
|
%
|
|||
Total current liabilities
|
927,300
|
|
|
807,260
|
|
|
120,040
|
|
|
15
|
%
|
|||
Total working capital
|
$
|
2,480,123
|
|
|
$
|
1,841,703
|
|
|
$
|
638,420
|
|
|
35
|
%
|
•
|
our expectations regarding the amount of, timing of and trends with respect to our revenues, costs and expenses and other gains and losses, including those related to CF net product revenues;
|
•
|
our expectations regarding clinical trials, development timelines, timing of our receipt of data from our ongoing and planned clinical trials and regulatory authority filings and submissions for ivacaftor, lumacaftor, tezacaftor, VX-659, VX-445, VX-561, VX-150, VX-210 and CTX001 and the MAA for tezacaftor in combination with ivacaftor;
|
•
|
our ability to obtain reimbursement for ORKAMBI in ex-U.S. markets and our ability to otherwise successfully market KALYDECO, ORKAMBI and SYMDEKO or any of our other drug candidates for which we obtain regulatory approval;
|
•
|
our expectations regarding the timing and structure of clinical trials of our drugs and drug candidates, including ivacaftor, lumacaftor, tezacaftor, VX-659, VX-445, VX-561, VX-150, VX-210 and CTX001, and the expected timing of our receipt of data from our ongoing and planned clinical trials;
|
•
|
the data that will be generated by ongoing and planned clinical trials and the ability to use that data to advance compounds, continue development or support regulatory filings;
|
•
|
our beliefs regarding the support provided by clinical trials and preclinical and nonclinical studies of our drug candidates for further investigation, clinical trials or potential use as a treatment;
|
•
|
our plan to continue investing in our research and development programs and our strategy to develop our drug candidates, alone or with third party-collaborators;
|
•
|
the establishment, development and maintenance of collaborative relationships;
|
•
|
potential business development activities;
|
•
|
potential fluctuations in foreign currency exchange rates;
|
•
|
our ability to use our research programs to identify and develop new drug candidates to address serious diseases and significant unmet medical needs; and
|
•
|
our liquidity and our expectations regarding the possibility of raising additional capital.
|
Period
|
|
Total Number
of Shares Purchased (1) |
Average Price
Paid per Share |
Total Number of Shares
Purchased as Part of Publicly Announced Plans or Programs (2) |
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (2)
|
April 1, 2018 to April 30, 2018
|
124,982
|
$150.01
|
118,079
|
470,002,816
|
|
May 1, 2018 to May 31, 2018
|
310,281
|
$151.55
|
306,627
|
422,980,285
|
|
June 1, 2018 to June 30, 2018
|
277,555
|
$151.31
|
275,761
|
380,982,293
|
|
Total
|
712,818
|
$151.19
|
700,467
|
380,982,293
|
Exhibit Number
|
Exhibit Description
|
3.1
|
|
3.2
|
|
10.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
101.INS
|
XBRL Instance
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation
|
101.LAB
|
XBRL Taxonomy Extension Labels
|
101.PRE
|
XBRL Taxonomy Extension Presentation
|
101.DEF
|
XBRL Taxonomy Extension Definition
|
|
Vertex Pharmaceuticals Incorporated
|
|
|
|
|
July 26, 2018
|
By:
|
/s/ Thomas Graney
|
|
|
Thomas Graney
|
|
|
Senior Vice President and Chief Financial Officer
(principal financial officer and duly authorized officer) |
VOTED:
|
To increase the number of shares of Common Stock, $.01 par value per share that the Corporation shall have authority to issue from 25,000,000 shares to 50,000,000 shares; and that Article 3 of the
|
|
Corporation's Restated Articles of Organization be, and hereby is, amended to read as follows:
|
3.
|
The total number of shares and the par value, if any, of each class of stock which the Corporation shall be authorized to issue is as follows: 1,000,000 shares of Preferred Stock, $.01 par value per share and 50,000,000 shares of Common Stock, $.01 par value per share.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Vertex Pharmaceuticals Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
July 26, 2018
|
/s/ Jeffrey M. Leiden
|
|
|
|
|
|
Jeffrey M. Leiden
|
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Vertex Pharmaceuticals Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
July 26, 2018
|
/s/ Thomas Graney
|
|
|
|
|
|
Thomas Graney
|
|
|
Senior Vice President and Chief Financial Officer
|
Date:
|
July 26, 2018
|
|
|
|
/s/ Jeffrey M. Leiden
|
|
|
|
|
|
Jeffrey M. Leiden
|
|
|
Chief Executive Officer and President
|
|
|
|
Date:
|
July 26, 2018
|
|
|
|
/s/ Thomas Graney
|
|
|
|
|
|
Thomas Graney
|
|
|
Senior Vice President and Chief Financial Officer
|
|