Vertex Pharmaceuticals Inc on Tuesday reported a third consecutive quarterly loss as sales of its hepatitis C drug, Incivek, again fell sharply while research and development spending rose.
Incivek sales in the fourth quarter fell by half to $222.8 million from $456.8 million in the year-ago period. Vertex shares were down 2 percent at $45.50 in after-hours trading.
After a first year on the market that saw Incivek sales soar past $1 billion in record time, sales have steeply declined over the past few quarters. Many patients have chosen either to wait for new drugs that promise fewer side effects and shorter treatment duration, or have signed up for clinical trials testing new interferon-free options being pursued by several companies, including Vertex itself.
Incivek was approved in 2011 to great fanfare as it doubled cure rates for the serious liver disease. But it must be taken with interferon, which causes miserable flu-like symptoms that lead many patients to delay or discontinue treatment. New options are seen as being less than a year away.
Vertex management, on a conference call with analysts and investors, said Icivek will continue to generate revenue in 2013 from patients motivated to begin treatment before new options are available and from those whose disease is too far along to safely wait for new drugs.
The Massachusetts-based biotechnology company reported a net loss of $76.1 million, or 35 cents per share, compared with a profit of $158.6 million, or 74 cents per share, a year ago.
The results included a charge of $85.1 million in large part to account for a reserve against the potential for excess Incivek inventory.
Sales of Vertex's new cystic fibrosis treatment, Kalydeco, rose to $58.5 million from $49 million in the third quarter as the drug was launched in some European markets. Sales growth of Kalydeco is somewhat limited by the fact that it treats only about 4 percent of CF patients with a specific gene mutation.
Once it receives a regulatory green light, Vertex expects this year to begin pivotal trials testing Kalydeco in combination with an experimental drug, VX-809, aimed at addressing a far greater portion of CF patients.
"The key for investors and the real upside potential for Vertex lies in the promise of a Phase III study that will be starting soon for a combination cystic fibrosis regimen," said RBC Capital Markets analyst Michael Yee.
If those results are positive, Yee said, "that would support a