Vertex Pharmaceuticals Inc (VRTX)

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Vertex Pharmaceuticals Sells HIV Product Royalty Stream for $160 Million
Tuesday June 3, 8:30 am ET

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX - News) today announced that it has sold its rights to future royalties in Lexiva® and Agenerase® under its 1993 license agreement with GlaxoSmithKline plc (GSK) in the field of HIV protease inhibitors for a one-time cash payment of $160 million.

In 2007, Vertex received net HIV royalty revenue of $34.1 million, based on royalties of $48.0 million from GSK, and $13.9 million in royalty payments made by Vertex to a third party with respect to this license agreement. As a result of the sale of the future royalties, Vertex will no longer make royalty payments to the third party with respect to Lexiva and Agenerase.

“The sale of this non-core financial asset provides us with significant capital and strengthens our financial position to support investment into key programs and future initiatives for our business,” stated Ian Smith, Executive Vice President and Chief Financial Officer of Vertex Pharmaceuticals. “In particular, this transaction will provide us with additional capital to support and advance our leadership position in hepatitis C drug development.”

Morgan Stanley acted as exclusive financial advisor to Vertex in connection with this transaction.

About Lexiva

Lexiva (marketed under the name Telzir in the European Union) is an HIV protease inhibitor for the treatment of HIV/AIDS infection sold by GSK worldwide. Lexiva is currently approved for sale in approximately 45 countries. Agenerase was the first product developed and commercialized under the collaboration with GSK and has been largely replaced in worldwide markets by Lexiva.