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Vertex Falls After Reporting Losses, Job Cuts

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) declined almost 3% to $75.62 per share after reporting losses for the third quarter and revealing its plan to eliminate jobs.

Vertex Falls After Reporting Losses, Job Cuts

Vertex posted GAAP net loss

During the third quarter, the maker of the Hepatitis C drug posted GAAP net losses of $124 million or $0.54 losses per share. The pharmaceutical company generated $222 million in revenue including $101 million sales from Kalyedeco (ivacaftor) and $86 million from Incivek (teleprivir). Its revenue declined from $336 million in the same period a year ago.

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) received $21 million in royalty revenues from Janssen for its drug Incivo for the third quarter. Its total royalty revenues were $27 million, up from $25.6 million in the same quarter in 2012.

Its cost of production revenues declined from $30.7 million to $20 million. According to the company, its R&D expenses increased to $228.6 million from $200.2 million in the same period last year. Its SG&A expenses were $87.8 million, down from $97.7 million last year.

The company ended the quarter with $1.42 billion in cash, cash equivalents, and marketable securities.

Vertex plans to reduce its workforce by 15% globally

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) plans to reduce its workforce by 15% globally, and is projected to incur $35 million to $45 million restructuring charges. The company said it will eliminate 370 Incivek-related jobs including approximately 175 positions in Massachusetts. Vertex projected that its 2014 non-GAAP operating expenses will decline by $150 million to $200 million.

In a statement, Jeffrey Leiden, M.D., Ph.D., chairman, president and CEO of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) said, “Our business is at a unique point in its evolution. We have a tremendous opportunity ahead of us to further transform the treatment of cystic fibrosis, which continues to be the company’s highest priority development program. Following the continued decline in the number of people starting treatment with INCIVEK, we today took the difficult step to reduce our workforce supporting this medicine, enabling us to focus our investment on key programs in cystic fibrosis and other diseases to position the company for future growth.”

For the full year 2013, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) expected to achieve between $1 billion to $1.05 billion revenues and non-GAAP operating expenses of approximately $1.1 billion.