Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today announced that it will receive $155 million in cash from two financial transactions. In the first transaction, Vertex will receive approximately $120 million in cash for the issuance of notes repayable no later than October 31, 2012 in the total amount of $155 million. In the second transaction, Vertex will receive approximately $35 million in cash for the sale of up to $95 million of rights to potential future milestone payments that Vertex is eligible to receive from Janssen Pharmaceutica for the launch of Vertex’s hepatitis C virus (HCV) protease inhibitor telaprevir in Europe. Vertex’s collaboration with Janssen is unchanged by today’s transactions, and Vertex continues to be eligible to receive a royalty on future product sales in Janssen’s commercial territories, including the European Union. Vertex retains exclusive commercial rights to telaprevir in North America.
Terms of the Transactions
The transactions announced today together will provide Vertex with a total of $155 million in one-time cash payments. Details of each transaction are outlined below:
Issuance of secured notes: Vertex will receive approximately $120 million in cash for the issuance of notes secured by $155 million in future telaprevir milestone payments that Vertex is eligible to receive from Janssen for the filing, approval and launch of telaprevir in Europe. The notes are payable on October 31, 2012, or as the milestone payments securing the notes are earned prior to October 31, 2012, in the total amount of $155 million. The notes were issued at a discount and do not pay current interest prior to maturity.