uploads///Graph Part

Will Orkambi Be a Game Changer for Vertex?

By

Aug. 21 2015, Updated 2:06 a.m. ET

Operating costs and expenses widen

As per the company’s press release, Vertex’s (VRTX) total operating costs and expenses for 2Q15 stood at $337.2 million, an increase of ~5.7% on a year-over-year basis. For 2Q15, the expenses included $16.9 million of the cost of product revenues and royalty expenses, a decrease of ~2.3% on a year-over-year basis. Vertex incurred sales, general, and administrative (or SG&A) expenses of $94.4 million for 2Q15, an increase of ~22% on a year-over-year basis.

The company spent $223.9 million on research and development (or R&D) expenses for 2Q15, a decrease of -0.26% on a year-over-year basis. Vertex’s average trailing 12-month R&D expenditure to net sales ratio stood at 132.43%.

Within the iShares Nasdaq Biotechnology ETF (IBB), companies like Gilead Sciences (GILD), Amgen (AMGN), and Celgene (CELG) have a trailing 12-month R&D expenditure to net sales ratio of 10.93%, 19.79%, and 34.13%, respectively.

Article continues below advertisement

About Orkambi

On July 2, the U.S. Food and Drug Administration (or FDA) approved Orkambi. The drug is used in the treatment of cystic fibrosis for people aged 12 and older. Vertex has sought approval from the European Medicines Agency, Health Canada, and Australia’s Therapeutic Goods Administration to launch the drug in Europe, Canada, and Australia. If successful, Orkambi would add new revenue streams to the company.

Advertisement

More From Market Realist