Vertex Pharmaceuticals Inc VRTX
Q4 2010 Earnings Call Transcript

Transcript Call Date 02/03/2011

Operator: Good day, ladies and gentlemen, and welcome to Vertex Pharmaceuticals' Fourth Quarter Year End 2010 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, this conference call maybe recorded.

I would now like to hand the conference over to Mr. Michael Partridge. Sir, you may begin.

Michael Partridge - VP, IR: Thank you. Good evening and welcome to Vertex's conference call. 2011 promises to be landmark year for Vertex. This is made possible by successful execution across the business in 2010. Specifically, we achieved some very important milestones with telaprevir for the treatment of hepatitis C. We completed and disclosed results from three Phase 3 trials with telaprevir. We completed the NDA submission in November and we now know that the file has been accepted by the FDA and granted Priority Review. We have essentially hired all of our entire sales force for telaprevir and sales training has begun.

Also, in hepatitis C, we initiated a study that will enable us to evaluate SVR or viral cure rates in novel 12 and 24-week response-guided quad regimens of VX-222 and telaprevir with pegylated-interferon and ribavirin. Our aim in hepatitis C is to continue to lead in the development of potentially game-changing regimens.

In cystic fibrosis, we enrolled (treated) patients in three clinical trials that are part of our Phase 3 registration program for our lead medicine in development for CF VX-770. We look forward to receiving the first Phase 3 results this quarter. We also advanced key Phase 2 programs in epilepsy and rheumatoid arthritis demonstrating the depth of our pipeline.

We maintained our financial strength in 2010. We raised $400 million in convertible notes in September giving us a strong balance sheet as we begin 2011 that we expect will carry us through to cash flow positive.

With me today are Matt Emmens, who will kick of the call with an overview of our business focus for 2011; Dr. Peter Mueller who will review our clinical and regulatory progress, principally focused on hepatitis C and cystic fibrosis; Nancy Wysenski, who will provide an update on our launch preparations for telaprevir and Ian Smith, who will comment on our 2010 financial results and 2011 financial priorities with our projected timeline to positive cash flow (in a moment). After that, we will be joined by Dr. Bob Kauffman and we'll be happy to take your questions at that time. We will ask you to please limit your questions to one with a related follow-up. Once the call concludes our IR team joined by Peter, Nancy and Ian will be in the office to answer any additional questions.

Finally, let me note that information discussed on this conference call includes forward-looking statements, which are subject to the risks and uncertainties discussed in detail in our reports filed with the Securities and Exchange Commission including our 10-K.

GAAP and non-GAAP financial measures will be discussed on this call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our 2010 year-end financial press release, which is on our website. All 2009 and 2010 expenses discussed in this call exclude stock-based compensation, executive transition expenses, restructuring expense, acquisition related expenses, intangible asset impairment charges, net of tax, loss on exchanges of convertible debt and expenses related to September 2009 financial transaction.

Read our Earnings Call Transcript disclaimer.
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