| Schedule of quarterly financial data |
The following tables set forth the Company’s quarterly financial data for the two years ended December 31, 2019: | | | | | | | | | | | | | | | | | | Three Months Ended | | March 31,
2019 | | June 30,
2019 | | September 30,
2019 | | December 31,
2019 | | (in thousands, except per share amounts) | Revenues: | | | | | | | | Product revenues, net (1) | $ | 857,253 |
| | $ | 940,380 |
| | $ | 949,828 |
| | $ | 1,413,265 |
| Collaborative and royalty revenues | 1,182 |
| | 913 |
| | — |
| | — |
| Total revenues | 858,435 |
| | 941,293 |
| | 949,828 |
| | 1,413,265 |
| Costs and expenses: | | | | | | | | Cost of sales | 95,092 |
| | 135,740 |
| | 131,914 |
| | 185,012 |
| Research and development expenses (2) | 339,490 |
| | 379,091 |
| | 555,948 |
| | 480,011 |
| Sales, general and administrative expenses | 147,045 |
| | 156,502 |
| | 159,674 |
| | 195,277 |
| Change in fair value of contingent consideration | — |
| | — |
| | 2,959 |
| | 1,500 |
| Total costs and expenses | 581,627 |
| | 671,333 |
| | 850,495 |
| | 861,800 |
| Income from operations | 276,808 |
| | 269,960 |
| | 99,333 |
| | 551,465 |
| Interest income | 15,615 |
| | 18,076 |
| | 17,628 |
| | 12,359 |
| Interest expense | (14,868 | ) | | (14,837 | ) | | (14,548 | ) | | (14,249 | ) | Other income (expense), net (3) | 42,610 |
| | 53,939 |
| | (31,747 | ) | | 127,375 |
| Income before provision for income taxes | 320,165 |
| | 327,138 |
| | 70,666 |
| | 676,950 |
| Provision for income taxes (4) | 51,534 |
| | 59,711 |
| | 13,148 |
| | 93,716 |
| Net income attributable to Vertex | $ | 268,631 |
| | $ | 267,427 |
| | $ | 57,518 |
| | $ | 583,234 |
| | | | | | | | | Amounts per share attributable to Vertex common shareholders: | | | | | | | | Net income: | | | | | | | | Basic | $ | 1.05 |
| | $ | 1.04 |
| | $ | 0.22 |
| | $ | 2.26 |
| Diluted | $ | 1.03 |
| | $ | 1.03 |
| | $ | 0.22 |
| | $ | 2.23 |
| Shares used in per share calculations: | | | | | | | | Basic | 255,695 |
| | 256,154 |
| | 256,946 |
| | 258,003 |
| Diluted | 260,175 |
| | 259,822 |
| | 260,473 |
| | 262,108 |
|
| | | | | | | | | | | | | | | | | | Three Months Ended | | March 31,
2018 | | June 30,
2018 | | September 30,
2018 | | December 31,
2018 | | (in thousands, except per share amounts) | Revenues: | | | | | | | | Product revenues, net | $ | 637,729 |
| | $ | 749,912 |
| | $ | 782,511 |
| | $ | 868,173 |
| Collaborative and royalty revenues | 3,070 |
| | 2,245 |
| | 2,024 |
| | 1,933 |
| Total revenues | 640,799 |
| | 752,157 |
| | 784,535 |
| | 870,106 |
| Costs and expenses: | | | | | | | | Cost of sales | 71,613 |
| | 104,382 |
| | 111,255 |
| | 122,289 |
| Research and development expenses (2) | 310,553 |
| | 337,532 |
| | 330,510 |
| | 437,881 |
| Sales, general and administrative expenses | 129,808 |
| | 137,303 |
| | 137,295 |
| | 153,210 |
| Restructuring (income) expenses | (76 | ) | | 62 |
| | (174 | ) | | 4 |
| Intangible asset impairment charge | — |
| | — |
| | — |
| | 29,000 |
| Total costs and expenses | 511,898 |
| | 579,279 |
| | 578,886 |
| | 742,384 |
| Income from operations | 128,901 |
| | 172,878 |
| | 205,649 |
| | 127,722 |
| Interest income | 5,789 |
| | 8,049 |
| | 10,543 |
| | 13,971 |
| Interest expense | (16,886 | ) | | (18,155 | ) | | (18,686 | ) | | (18,744 | ) | Other income (expense), net (3) | 96,838 |
| | 53,819 |
| | (60,995 | ) | | (90,452 | ) | Income before (benefit from) provision for income taxes | 214,642 |
| | 216,591 |
| | 136,511 |
| | 32,497 |
| (Benefit from) provision for income taxes (4) | (12,659 | ) | | 10,341 |
| | 8,055 |
| | (1,492,599 | ) | Net income | 227,301 |
| | 206,250 |
| | 128,456 |
| | 1,525,096 |
| (Income) loss attributable to noncontrolling interest (5) | (17,038 | ) | | 1,110 |
| | 290 |
| | 25,431 |
| Net income attributable to Vertex | $ | 210,263 |
| | $ | 207,360 |
| | $ | 128,746 |
| | $ | 1,550,527 |
| | | | | | | | | Amounts per share attributable to Vertex common shareholders: | | | | | | | | Net income: | | | | | | | | Basic | $ | 0.83 |
| | $ | 0.82 |
| | $ | 0.51 |
| | $ | 6.08 |
| Diluted | $ | 0.81 |
| | $ | 0.80 |
| | $ | 0.50 |
| | $ | 5.97 |
| Shares used in per share calculations: | | | | | | | | Basic | 253,231 |
| | 254,135 |
| | 254,905 |
| | 254,868 |
| Diluted | 258,526 |
| | 258,584 |
| | 259,788 |
| | 259,812 |
|
| | 1. | In the fourth quarter of 2019, the Company updated its transaction price and recognized net product revenues of $155.8 million related to prior period ORKAMBI sales upon reaching a reimbursement agreement with the French government for ORKAMBI, including ORKAMBI distributed through early access programs. See Note A, “Nature of Business and Accounting Policies.” |
| | 2. | In the third quarter of 2019, the Company incurred research and development expenses of $175.0 million related to its CRISPR DMD/DM1 Agreement. In the fourth quarter of 2018, the Company incurred research and development expenses of $95.0 million to related license agreements with Merck KGaA, Darmstadt, Germany, and Arbor. See Note B, “Collaborative Arrangements.” |
| | 3. | In 2019 and 2018, “Other income (expense), net” was primarily related to changes in the fair value of the Company’s equity investment in CRISPR. See Note F, “Marketable Securities and Equity Investments.” |
| | 4. | In the fourth quarter of 2018, the Company released the valuation allowance on the majority of its NOLs and other deferred tax assets as of December 31, 2018 resulting in a benefit from income taxes of $1.56 billion. Starting in 2019, the Company began recording a provision for income taxes approximating statutory rates on its pre-tax income. See Note P, “Income Taxes.” |
5. In 2018, the Company had a noncontrolling interest in BioAxone, which it consolidated as a VIE until December 31, 2018. Following the deconsolidation of BioAxone as of December 31, 2018, the Company did not have a noncontrolling interest in any entities in 2019. See Note B, “Collaborative Arrangements.”
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