Vertex ends hepatitis C investment as sales fall

Vertex says it won't spend more money on hepatitis C development; cystic fibrosis sales rise

NEW YORK (AP) -- Vertex Pharmaceuticals, which reported more than $1 billion in sales of its hepatitis C drug Incivek in 2012, said Thursday it won't invest any more money on research and development of new treatments for the disease.

Revenue from Incivek dropped 98 percent in the first quarter as the drug was supplanted by newer treatments and Vertex sold its overseas marketing rights.

Vertex said net product revenue from Incivek totaled $3.9 million, down from $205.6 million one year ago. Incivek was launched to great fanfare in 2011 at the start of a wave of new treatments for hepatitis C, and Vertex reported $1.16 billion in revenue from the drug in 2012. But as other companies continued to pour money into the field, drugs with fewer side effects, shorter terms of treatment, and the potential for greater cure rates have reached the market.

In April, Gilead Sciences Inc. said sales of its hepatitis C drug Sovaldi totaled $2.27 billion in its first full quarter on the market. Sovaldi got U.S. approval in December and European Union approval in January.

Vertex wrote down the entire value of one experimental treatment for hepatitis C during the fourth quarter and it took an impairment charge related to another. The company also cut about 370 jobs in response to competition from other hepatitis C treatments.

But Vertex reported $99.5 million in revenue from cystic fibrosis treatment Kalydeco, up 61 percent from a year ago. Vertex maintained its annual sales forecast for Kalydeco, calling for $470 million to $500 million in revenue from the drug.

The Boston company said it lost $232.5 million, or $1 per share, in the first quarter. A year ago Vertex lost $308 million, or $1.43 per share.

Excluding one-time items Vertex said it lost 65 cents per share, while a year earlier it reported an adjusted profit of 3 cents per share. Revenue fell 64 percent to $118.5 million.

FactSet says analysts expected a loss of 68 cents per share and $134.6 million in revenue.

The company's shares gained 1.2 percent in the aftermarket, after rising $1.25, or 1.9 percent, to $68.95 during regular trading.