SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934 For the quarterly period ended June 30, 1997
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934 For the transition period
from ---------- to ------
Commission File Number 0-19319
Vertex Pharmaceuticals Incorporated
(Exact name of registrant as specified in its charter)
Massachusetts 04-3039129
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
130 Waverly Street, Cambridge, Massachusetts 02139-4242
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(Address of principal executive offices, including zip code)
(617) 577-6000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 25,096,445
- -------------------------------------- ------------------------
Class Outstanding at August 5, 1997
1
VERTEX PHARMACEUTICALS INCORPORATED
INDEX
Page
Part I. - Financial Information
Item 1. Condensed Consolidated Financial Statements
Report of Independent Accountants 3
Condensed Consolidated Balance Sheets -
June 30, 1997 and December 31, 1996 4
Condensed Consolidated Statements of Operations -
Three Months Ended June 30, 1997 and 1996 5
Condensed Consolidated Statements of Operations -
Six Months Ended June 30, 1997 and 1996 6
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1997 and 1996 7
Notes to Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. - Other Information 13
Signatures 14
2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Vertex Pharmaceuticals
Incorporated:
We have reviewed the accompanying condensed balance sheet of Vertex
Pharmaceuticals Incorporated as of June 30, 1997, and the related condensed
consolidated statements of operations and cash flows for the three-month and the
six-month periods then ended. These financial statements are the responsibility
of the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 22, 1997
3
VERTEX PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
JUNE 30, DECEMBER 31,
1997 1996
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ASSETS
Current assets:
Cash and cash equivalents........................................................... $ 188,584 $ 34,851
Short-term investments.............................................................. 97,582 95,508
Prepaid expenses and other current assets........................................... 1,642 1,791
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Total current assets............................................................. 287,808 132,150
Restricted cash........................................................................ 2,316 2,316
Property and equipment, net............................................................ 10,007 8,663
Other assets........................................................................... 535 370
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Total assets..................................................................... $ 300,666 $ 143,499
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---------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Obligations under capital lease..................................................... $ 2,815 $ 2,910
Accounts payable and accrued expenses............................................... 5,397 4,146
Deferred revenue.................................................................... 1,056 --
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Total current liabilities........................................................ 9,268 7,056
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Obligations under capital leases, excluding
current portion..................................................................... 5,446 5,617
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Total liabilities................................................................ 14,714 12,673
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Stockholders' equity:
Common stock........................................................................ 251 211
Additional paid-in capital.......................................................... 389,822 227,510
Equity adjustments.................................................................. 1 49
Accumulated deficit................................................................. (104,122) (96,944)
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Total stockholders' equity....................................................... 285,952 130,826
---------- ------------
Total liabilities and stockholders' equity....................................... $ 300,666 $ 143,499
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The accompanying notes are an integral part of
these condensed consolidated financial statements.
4
VERTEX PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
THREE MONTHS ENDED JUNE 30,
---------------------------
1997 1996
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Revenues:
Collaborative and other research and development........ $ 8,320 $ 3,116
Interest income......................................... 3,835 1,030
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Total revenues........................................ 12,155 4,146
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Costs and expenses:
Research and development................................ 10,798 9,490
General and administrative.............................. 2,624 1,878
License payment......................................... -- 15,000
Interest................................................ 145 103
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Total costs and expenses.............................. 13,567 26,471
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Net loss................................................... $ (1,412) $ (22,325)
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Net loss per common share.................................. $ (0.06) $ (1.28)
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Weighted average number of common shares
outstanding............................................. 24,722 17,398
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------------ ------------
The accompanying notes are an integral part of
these condensed consolidated financial statements.
5
VERTEX PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
--------- ----------
Revenues:
Collaborative and other research and development........................................ $ 12,980 $ 5,589
Interest income......................................................................... 6,093 2,308
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Total revenues............................................................................. 19,073 7,897
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Costs and expenses:
Research and development................................................................ 21,112 18,827
General and administrative.............................................................. 4,841 3,641
License payment......................................................................... -- 15,000
Interest................................................................................ 298 222
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Total costs and expenses.............................................................. 26,251 37,690
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Net loss................................................................................... $ (7,178) $ (29,793)
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--------- ----------
Net loss per common share.................................................................. $ (0.31) $ (1.72)
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Weighted average number of common shares
outstanding............................................................................. 23,356 17,365
--------- ----------
--------- ----------
The accompanying notes are an integral part of
these condensed consolidated financial statements.
6
VERTEX PHARMACEUTICALS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
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Cash flows from operating activities:
Net loss....................................................................... $(7,178) $ (29,793)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization............................................... 1,644 1,675
Changes in assets and liabilities:
Prepaid expenses and other
current assets........................................................... 149 (789)
Accounts payable and accrued
expenses................................................................. 1,251 (2,380)
Deferred revenue........................................................... 1,056 803
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Net cash provided (used) by
operating activities................................................. (3,078) (30,484)
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Cash flows from investing activities:
Net purchases and sales of short-term investments............................. (2,116) 7,080
Expenditures for property and equipment....................................... (2,988) (1,057)
Other assets.................................................................. (165) (1,085)
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Net cash provided (used) by investing
activities............................................................... (5,269) 4,938
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Cash flows from financing activities:
Net proceeds from public offering of common stock............................. 148,810 --
Proceeds from private placement of common stock............................... 10,000 5,000
Other issuances of common stock............................................... 3,542 1,536
Proceeds from equipment sale/leaseback........................................ 1,179 903
Repayment of capital lease obligations........................................ (1,445) (1,034)
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Net cash provided (used) by
financing activities...................................................... 162,086 6,405
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Effect of exchange rate changes on cash.......................................... (6) 1
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Increase (decrease) in cash and cash equivalents................................. 153,733 (19,140)
Cash and cash equivalents at beginning of period................................. 34,851 28,390
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Cash and cash equivalents at end of period.......................................$188,584 $ 9,250
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The accompanying notes are an integral part of
these condensed consolidated financial statements.
7
VERTEX PHARMACEUTICALS INCORPORATED
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The year end condensed balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.
Certain information and footnote disclosures normally included in the
Company's annual financial statements have been condensed or omitted. The
interim financial statements, in the opinion of management, reflect all
adjustments (including normal recurring accruals) necessary for a fair statement
of the results for the interim periods ended June 30, 1997 and 1996.
The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the fiscal year,
although the Company expects to incur a substantial loss for the year ended
December 31, 1997. These interim financial statements should be read in
conjunction with the audited financial statements for the year ended December
31, 1996, which are contained in the Company's 1996 Annual Report to its
shareholders and in its Form 10-K filed with the Securities and Exchange
Commission.
2. CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
highly liquid investments with maturities of three months or less at the date of
purchase to be cash equivalents. Changes in cash and cash equivalents may be
affected by shifts in investment portfolio maturities as well as by actual net
cash receipts or disbursements.
3. NET LOSS PER COMMON SHARE
The net loss per common share is computed based upon the weighted average
number of common shares outstanding. Common equivalent shares are not included
in the per-share calculations where the effect would be anti-dilutive.
4. RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share" which
modifies the way in which earnings per share ("EPS") is calculated and
disclosed. SFAS 128 requires a dual presentation of basic and diluted EPS for
all years presented in the income statements. SFAS 128 is effective for
financial statements for periods ending after December 15, 1997. The adoption of
SFAS 128 is not expected to have a material impact on the Company's EPS
calculation.
The FASB has recently issued Statement of Financial Accounting Standards No.
130 ("SFAS 130"), "Reporting Comprehensive Income". This Statement requires that
total comprehensive income be reported and that changes be shown in a financial
statement displayed with the same prominence as other financial statements. SFAS
130 is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods is required for
comparative purposes. The Company does not believe that this will have a
material impact on results of operations.
8
VERTEX PHARMACEUTICALS INCORPORATED
NOTES TO CONDENSED FINANCIAL STATEMENTS
5. COLLABORATIVE AGREEMENT WITH ELI LILLY AND COMPANY
In June 1997, Vertex and Eli Lilly and Company ("Lilly") entered into a
collaborative agreement for the research, development and commercialization
of novel, small molecule compounds to treat hepatitis C infection. Under the
terms of the agreement, Lilly will pay the Company up to $51 million composed
of a $3 million initial research funding payment paid in June 1997, $33
million of product research funding over six years and $15 million of
development and commercialization milestone payments. The Company and Lilly
will jointly manage the research, development, manufacturing and marketing of
drug candidates emerging from the collaboration. The Company will have
primary responsibility for drug design, process development and
pre-commercial drug substance manufacturing, and Lilly will have primary
responsibility for formulation, preclinical and clinical development and
global marketing. The Company has the option to supply 100 percent of Lilly's
commercial drug substance supply needs. The Company will receive royalties on
future product sales, if any. If the Company exercises its commercial supply
option, the Company will receive drug supply payments in addition to
royalties on future product sales, if any. Lilly has the right to terminate
the agreement without cause upon six months' notice after June 1999. In
connection with this collaboration, Lilly purchased 263,922 shares of the
Company's common stock for $10,000,000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is engaged in the discovery, development and commercialization
of novel, small molecule pharmaceuticals for the treatment of major diseases for
which there are currently limited or no effective treatments. The Company is a
leader in the use of structure-based drug design, an approach to drug discovery
that integrates advanced biology, biophysics and chemistry. The Company is
conducting nine significant pharmaceutical research and development programs to
develop pharmaceuticals for the treatment of viral diseases, multidrug
resistance in cancer, hemoglobin disorders, autoimmune diseases, inflammatory
diseases and neurodegenerative disorders. Five of these programs are in the
development phase, and the other four are in the research phase. During the
second quarter of 1997, Vertex's partner, Glaxo Wellcome plc ("Glaxo Wellcome"),
advanced Phase II and Phase III clinical development of VX-478 (141W94), the
lead compound in the Company's HIV program, in the United States, Canada and
Europe. Kissei Pharmaceutical Co., Ltd. ("Kissei") is also developing VX-478 as
Vertex's partner for the HIV program in the Far East. Through a series of Phase
II clinical trials underway or planned, Vertex and its partner for development
and marketing of VX-710 in Canada, BioChem Therapeutics Inc. ("BioChem"), are
evaluating VX-710 to reverse cancer multidrug resistance in solid tumors. In
addition, Vertex signed a research, development and commercialization agreement
with Eli Lilly and Company ("Lilly") to develop new drugs to treat hepatitis C
infection.
To date, the Company has not received any revenues from the sale of
pharmaceutical products and does not expect to receive such revenues this fiscal
year, if ever. The Company has incurred since its inception, and may incur over
the next several years, significant operating losses as a result of expenditures
for its research and development programs. The Company expects that losses will
fluctuate from quarter to quarter and that such fluctuations may be substantial.
9
VERTEX PHARMACEUTICALS INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 Compared with Three Months Ended June
30, 1996. For the second quarter of 1997, the Company's total revenues were
$12,155,000 as compared to $4,146,000 during the same period in 1996. From
quarter to quarter, the Company's revenues fluctuate as a result of changes
in the timing and amount of partner research support payments, partner
reimbursements of Vertex drug development costs, and payments for the
achievement of various research and development milestones. In the second
quarter of 1997, the Company received $7,822,000 in revenue from its
collaborative agreements, $3,835,000 in interest received on invested funds
and $498,000 from government grants and other revenue. In the second quarter
of 1996, the Company received $2,715,000 in revenue from its collaborative
agreements, $1,030,000 in interest received on invested funds and $401,000
from government grants and other revenue. The increase in revenue for the
second quarter in 1997 is attributable to greater collaborative revenue and
interest income on higher levels of cash and short-term investments.
Collaborative revenue in the second quarter of 1997 included a $3,000,000
up-front payment and approximately $190,000 in research funding for the
Company's hepatitis C program received from Lilly under the collaborative
agreement signed in June 1997. In addition, the Company received a $2,000,000
payment from Kissei for reimbursement of costs associated with an ongoing
Phase II clinical trial of Vertex's HIV protease inhibitor, VX-478, as
single-drug therapy for HIV infection. Also during the second quarter of
1997, Ciba Geigy Limited exercised a development option resulting in a
milestone payment of $200,000 and research revenue of $200,000 pursuant to a
collaboration with the Company's subsidiary, Altus Biologics Inc. ("Altus")
in the field of detergents.
The Company's total costs and expenses decreased to $13,567,000 in the
second quarter of 1997, from $26,471,000 during the same period in 1996. During
the second quarter in 1996, the Company made a one-time payment of $15,000,000
to obtain a non-exclusive, worldwide license under certain G.D. Searle & Co.
("Searle") patent applications claiming HIV protease inhibitors. Research and
development expenses were $10,798,000 in the second quarter of 1997 as compared
to $9,490,000 during the same period in 1996. This increase in cost is
principally a result of the continued growth of the Company's research and
development organization and increasing expenditures for the preclinical
development of VX-497, the Company's lead candidate in its IMPDH program for
potential new therapies for autoimmune diseases and also increased costs
associated with expanded Phase II clinical trials of VX-710, the Company's lead
compound in the multidrug resistance program. General and administrative
expenses increased during the second quarter of 1997 to $2,624,000 from
$1,878,000 in the second quarter of 1996 due primarily to increases in
administrative personnel, increased legal costs associated with patents and
other matters, as well as an increase in marketing efforts by Altus. Interest
expense increased to $145,000 in the second quarter of 1997 as compared to
$103,000 during the same period in 1996 due to higher levels of equipment
financing.
The Company incurred a net loss of $1,412,000 or $0.06 per share in the
second quarter of 1997 as compared to a net loss of $22,325,000 or $1.28 per
share in the second quarter of 1996.
10
VERTEX PHARMACEUTICALS INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, 1997 Compared with Six Months Ended June 30,
1996. The Company's total revenues increased to $19,073,000 for the six
months ended June 30, 1997 from $7,897,000 for the six months ended June 30,
1996. In 1997, the Company's revenues consisted of $12,059,000 earned under
the Company's collaborative agreements, $6,093,000 in interest income and
$921,000 in government grants and other income. The Company's revenues during
the same period in 1996, consisted of $5,147,000 earned under the Company's
collaborative agreements, $2,308,000 in interest income and $442,000 in
government grants and other income. The increase in revenue for the first
half of 1997 compared to the same period in 1996 was principally due to the
up-front payment of $3,000,000 by Lilly upon the commencement of the
hepatitis C collaboration, $4,000,000 in development reimbursements from
Kissei for an ongoing clinical trial of Vertex's HIV protease inhibitor, and
increased investment income from higher levels of cash and investments due to
the successful completion of public offerings of the Company's stock in
August 1996 and March 1997.
The Company's total costs decreased to $26,251,000 for the six months
ended June 30, 1997 from $37,690,000 for the six months ended June 30, 1996.
The Company paid $15,000,000 in the first half of 1996 to obtain a
non-exclusive, worldwide license under certain Searle patent applications
claiming HIV protease inhibitors. Research and development expenses increased
to $21,112,000 in the first half of 1997 from $18,827,000 in the first half
of 1996, primarily due to additional scientific staffing as well as the
commencement of preclinical activities for VX-497, the lead compound in the
Company's IMPDH program.
General and administrative expenses increased during the first half of
1997 to $4,841,000 from $3,641,000 in the first half of 1996 due primarily to
increases in administrative personnel, increased legal costs associated with
patents and other matters, as well as an increase in marketing efforts of
Altus. Interest expense was $298,000 in the second half of 1997, an increase
from $222,000 in the second half of 1996 as a result of higher levels of
equipment financing during the period.
For the reasons stated above, the Company incurred a net loss of $7,178,000
or $0.31 per share in the six months ended June 30, 1997 compared to a net loss
of $29,793,000 or $1.72 per share in the six months ended June 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations have been funded principally through strategic
collaborative agreements, public offerings and private placements of the
Company's equity securities, equipment lease financing, government grants and
interest income. The Company expects to incur increased research and development
and related supporting expenses and, consequently, continued losses on a
quarterly and annual basis as it continues to develop existing and future
compounds and to conduct clinical trials of potential drugs. The Company also
expects to incur substantial administrative and commercialization expenditures
in the future and additional expenses related to the filing, prosecution,
defense and enforcement of patent and other intellectual property rights.
11
VERTEX PHARMACEUTICALS INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company expects to finance these substantial cash needs with its
existing cash and investments at June 30, 1997 of approximately $286 million,
together with interest earned thereon, future payments under its existing
collaborative agreements, and facilities and equipment financing. To the extent
that funds from these sources are not sufficient to fund the Company's
activities, it will be necessary to raise additional funds through public
offerings or private placements of securities or other methods of financing.
There can be no assurance that such financing will be available on acceptable
terms, if at all.
In June 1997, the Company entered into a collaborative agreement for up to
$51 million with Lilly for the research, development and commercialization of
compounds in connection with the Company's hepatitis C program. The Company has
the option to supply 100 percent of Lilly's commercial drug substance supply
needs. The Company will receive royalties on future product sales, if any. If
the Company exercises its commercial supply option, the Company will receive
drug supply payments in addition to royalties on future product sales, if any.
In connection with this collaboration, Lilly purchased 263,922 shares of the
Company's common stock for $10,000,000.
The Company's aggregate cash and investments increased by $155,807,000
during the six months ended June 30, 1997 to $286,166,000, principally due to
the public offering completed in March 1997, with net proceeds of approximately
$148,810,000, and an equity investment by Lilly in June 1997 of $10,000,000.
Cash used by operations, principally to fund research and development
activities, was $3,078,000 during the same period. The Company also expended
$2,988,000 during this period to acquire property and equipment, principally for
research equipment and facilities. During the first quarter of 1997, the Company
entered into equipment lease financing in the aggregate amount of $1,179,000 and
repaid $1,445,000 of its lease obligations.
In July 1997, the Company purchased a portfolio of ten patent application
families claiming ICE (interleukin-1 beta converting enzyme) and its
inhibitors from Sanofi S.A. Through this acquisition, the Company has
obtained the rights, title and interest to all the patent properties in
Sanofi's ICE portfolio.
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share" which
modifies the way in which earnings per share ("EPS") is calculated and
disclosed. SFAS 128 requires a dual presentation of basic and diluted EPS for
all years presented in the income statements. SFAS 128 is effective for
financial statements for periods ending after December 15, 1997. The adoption of
SFAS 128 is not expected to have a material impact on the Company's EPS
calculation.
The FASB has recently issued Statement of Financial Accounting Standards
No. 130 ("SFAS 130"), "Reporting Comprehensive Income". This Statement
requires that total comprehensive income be reported and that changes be
shown in a financial statement displayed with the same prominence as other
financial statements. SFAS 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier
periods is required for comparative purposes. The Company does not believe
that this will have a material impact on results of operations.
12
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None
ITEM 2. CHANGES IN SECURITIES:
Recent Sales of Unregistered Securities
On June 18, 1997, the Company issued and sold to Lilly, for cash,
263,922 shares of the Company's Common Stock for an aggregate purchase
price of $10,000,000. The securities issued were not
registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on the exemption set forth in
Section 4(2) of the Securities Act. The sale to Lilly was a privately
negotiated sale by the Company not involving any public offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
The Company's Annual Meeting of Stockholders was held on May 8, 1997.
The stockholders elected Charles A. Sanders to the class of directors
whose term expires in 1998 and Barry M. Bloom and William W. Helman IV
to the class of directors whose term expires in 2000. The tabulation of
votes with respect to the election of such directors is as follows:
TOTAL VOTE TOTAL VOTE
FOR: WITHHELD:
------------- ------------------
Charles A. Sanders............................................................ 19,500,766 78,310
Barry M. Bloom................................................................ 19,492,781 118,597
William W. Helman IV.......................................................... 19,492,981 118,397
The stockholders approved an amendment to the Company's Restated
Articles of Organization to increase the number of authorized shares of
Common Stock of the Company from 50,000,000 to 100,000,000 by a vote of
18,591,245 shares in favor, 979,121 shares against, and 41,012 shares
abstaining.
A proposal to amend the Company's Restated Articles of Organization to
increase the number of authorized shares of Preferred Stock from
1,000,000 to 5,000,000 was not approved, with 9,304,131 shares voted
in favor, 6,971,564 shares voted against, 42,442 shares abstaining, and
3,293,241 broker non-votes.
The stockholders approved the Company's 1996 Stock and Option Plan, with
9,695,876 shares voted in favor, 6,595,383 shares voted against, 63,262
shares abstaining, and 3,256,857 broker non-votes.
13
In addition, the stockholders approved the appointment of Coopers &
Lybrand L.L.P. as the Company's independent accountants for the 1997
fiscal year by a vote of 19,548,868 shares in favor, 32,608 shares
against, and 29,902 shares abstaining.
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS:
10.1 Research and Development Agreement between the Company and Eli
Lilly and Company effective June 11, 1997 (filed herewith with certain
confidential information deleted).
27 Financial Data Schedule. (Exhibit 27 is submitted as an
exhibit only in the electronic format of this Quarterly Report on
Form 10-Q submitted to the Securities and Exchange Commission.).
99 Letter of Independent Accountants.
Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VERTEX PHARMACEUTICALS INCORPORATED
Date: August 14, 1997 /s/Thomas G. Auchincloss, Jr.
--------------------------------------
Thomas G. Auchincloss, Jr.
Vice President of Finance and Treasurer
(Principal Financial Officer)
Date: August 14, 1997 /s/Hans D. van Houte
--------------------------------------
Hans D. van Houte
Controller
(Principal Accounting Officer)
14