Vertex Pharmaceuticals (VRTX) reported financial results for the first quarter 2009. Total revenues for the quarter were $24.8 million, and comprised of $6.1 million in royalties and $18.6 million in collaborative and R&D revenues. Adjusted operating loss for the quarter, which excludes $23.8 million in stock-based compensation and $10.2 million in restructuring and acquisition related expenses, totaled $127.5 million, or $0.82 per share.

Including these charges, GAAP net loss for the quarter totaled $161.5 million, or $1.04 per share. Vertex exited the first quarter 2009 with $869.2 million in cash, equivalents, and marketable securities.

For 2009, management provided non-GAAP (adjusted) net loss guidance of $400 to $435 million. Vertex expects to exit 2009 with over $700 million in cash, equivalents and marketable securities.

Vertex recently closed its acquisition of ViroChem Pharma for roughly $390 million in cash and stock. The deal brings into Vertex’s pipeline VCH-222, a very potent, but early-stage polymerase inhibitor for HCV. Vertex plans to combine VCH-222 with telaprevir to develop next-gen combination products to treat HCV. The deal further establishes Vertex as the market leader in new HCV product development.

There is little doubt in our mind that telaprevir has blockbuster sales potential. That being said, the cash-burn rate and high expectations keep us at a Hold rating. Vertex stock remains highly volatile, and thus is can be an effective trading vehicle for astute investors. We would be buyers of the stock below $25.

Read the full analyst report on “VRTX”
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