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Vertex posts loss, raises cystic fibrosis sales view

By Bill Berkrot

(Reuters) - Vertex Pharmaceuticals Inc on Tuesday increased by $20 million the 2013 forecast for sales of its cystic fibrosis drug Kalydeco, and said it anticipates seeking approval in 2014 of a CF combination therapy that has become a focus for investors.

The new cystic fibrosis drug Kalydeco had sales of $61.8 million, up from $58.5 million in the previous quarter. The company now expects 2013 Kalydeco sales of $300 million to $340 million, up from its prior view of $280 million to $320 million.

Vertex shares are up about 80 percent this year with most of the gain driven by enthusiasm over data generated from a combination of Kalydeco and an experimental cystic fibrosis drug that the company hopes will eventually be able to help a far larger portion of the CF population.

The company said it expects to have late stage clinical data from the combination therapy and to file for U.S. approval next year. Kalydeco alone works for only about 4 percent of patients with a specific gene mutation.

Vertex said it believes the vast majority of eligible U.S. patients were already being treated with Kalydeco, but that it expects sales in Europe to accelerate given progress in achieving reimbursement approvals in major European markets.

Vertex posted a net loss of $308 million, or $1.43 per share, compared with a profit of $91.6 million, or 43 cents per share, a year ago, due to plunging sales of the hepatitis C drug Incivek. Excluding one-time items, such as a large charge related to an impairment of an intangible asset, Vertex said it earned 3 cents per share.

Incivek sales fell 74 percent from a year ago to $205.6 million and were also down from the prior quarter's sales of $222.8 million.

After eclipsing $1 billion in sales faster than any drug in pharmaceutical history in its first year on the market, Incivek sales have plunged as many patients await new drugs that promise fewer side effects and a shorter treatment duration, or have signed up for clinical trials of new treatment combinations being pursued by several companies, including Vertex.

RBC Capital Markets analyst Michael Yee said the Kalydeco launch was going well. But he said the next Vertex stock jump was likely to come from hepatitis C data expected later this year of an experimental Vertex drug in combination with a highly promising drug from a different class being developed by Bristol-Myers Squibb Co that could lead to very high cure rates for the liver disease.

"The combination data could really increase the value of that program within Vertex's stock," said Yee, adding that it was currently under appreciated.

Revenue for the quarter fell 25 percent to $328.4 million, but topped Wall Street estimates of $307.9 million, according to Thomson Reuters I/B/E/S.

The company said it still expects full-year revenue of $1.10 billion to $1.25 billion. Analysts are looking for $1.17 billion.

After initially rising more than one percent in extended trading, Vertex shares gave back the gain and were flat with a Nasdaq close at $76.82.

(Reporting by Bill Berkrot; Editing by Steve Orlofsky, Bernard Orr)

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