Biotech Values

[DewDiligence]

Re: VRTX vs HGSI / largest cumulative losses of all time

I always thought Human Genome would be the top loser, has Vertex surpassed them?

Not yet, but VRTX will almost certainly surpass HGSI later this year (unless VRTX is acquired before then).

As of 12/31/08, VRTX had cumulative losses since inception of $2,047,605,000. HSGI has not yet reported 4Q08 results; as of 9/30/08, HGSI had cumulative losses since inception of $2,072,048,000. Based on HGSI’s recent operating burn, its cumulative losses as of 12/31/08 should be in the neighborhood of $2,150,000, about $100M more than VRTX.

However, HGSI’s $100M “cushion” won’t last long because VRTX will lose substantially more money than HGSI during 2009. VRTX has guided investors to expect 2009 losses of $495-530M (!), which will yield cumulative losses at 12/31/09 of $2.54-2.58B.

The record currently held by Millennium is $2.48B. Inasmuch as the lower bound of VRTX’s guidance range is higher than this figure, VRTX should end 2009 as the all-time champ.