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Vertex Swings to Loss on Weak Hep C Drug Sales

From Associated Press (January 29, 2013)

CAMBRIDGE, Mass. -- Specialty drug maker Vertex Pharmaceuticals Inc. swung to a loss in the fourth quarter as doctors turned away from the company’s best-selling drug for treating hepatitis C.

Vertex said revenue for quarter ended Dec. 31 fell 41 percent to $334 million. Most of the decline was due to lower sales of the company’s hepatitis C pill, Incivek, which contributed $223 million, down from $457 million.

Incivek is taken in combination with interferon drugs, which can cause nausea, diarrhea and other unpleasant side effects. Late last year, the FDA added a boxed warning to the drug about several cases of a fatal skin rash among patients taking the drug. Since a number of other hepatitis drugs are now in development, doctors may be advising patients to wait until future treatments become available before beginning treatment.

The company posted a loss of $76 million, or 35 cents per share, down from $158.6 million, or 74 cents per share, in the same quarter last year. The company’s other approved product, the cystic fibrosis drug Kalydeco, posted sales of $58.5 million.

Excluding one-time charges and events the company would have earned $9 million, or 4 cents per share.

Analysts polled by FactSet expected a loss of 6 cents per share on revenue of $320 million.

The company ramped up research and development costs during the quarter to $213.1 million to fund testing on new hepatitis and cystic fibrosis drug.

Looking ahead to 2013 the company expects revenue in the range of $1.1 billion to $1.25 billion. Analysts expect $1.15 billion.

The company said it expects full-year research and development costs to increase to between $750 million and $790 million in 2013. Those expenses were $719 million last year.

Company shares rose 47 cents to close at $46.39 before the earnings report. They were unchanged in aftermarket trading.

BRIEF: Abbott lays off undisclosed number of workers [Chicago Tribune]

From Chicago Tribune (IL) (January 29, 2013)

Jan. 29--Abbott Laboratories on Tuesday laid off an unspecified number of workers, including some at its Lake County headquarters, as part of job cuts originally announced in October.

The company, which cut 550 jobs across several business units in October, said at the time that it planned to lay off "several hundred" additional workers in 2013.

Scott Stoffel, an Abbott spokesman, declined to say how many people lost jobs or where, but said the layoffs "almost entirely relate to previously announced actions."

The jobs cut in October included about 100 in the Chicago area, mostly related to sales, marketing and operations personnel in divisions that remained under the Abbott banner after the company spun off its patented pharmaceutical business into a separate company called AbbVie Inc. on Jan. 1.

Abbott said the restructuring resulted in a $478 million pretax charge in its third quarter. The company also said last week that it took at $122 million charge in its fiscal fourth quarter for "restructuring, integration costs and other."

Abbott also cut about 700 jobs a year ago, including about 200 in Lake County. -- Twitter @peterfrost

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Keryx announces $55M public offering

From Associated Press (January 29, 2013)

NEW YORK -- Keryx Biopharmaceuticals Inc. said Tuesday that it will offer $55 million worth of its common stock in a public offering.

The drug maker is studying an experimental drug, Zerenex, as a treatment for late-stage kidney disease. The company said it would use proceeds of the offering to fund prelaunch activities for the drug.

Keryx has no products on the market, and Zerenex is its most advanced drug. The company plans to submit an application for approval of the drug to both the U.S. Food and Drug Administration and European regulators in this year’s second quarter.

The company has granted underwriters a 30-day option to purchase additional shares of common stock.

JP Morgan is acting as the book-running manager for the offering.

Company shares rose $2.30, or 38 percent, to close at $8.36 in regular trading. In afterhours trading shares fell 21 cents, or 2.5 percent to $8.15.

Anacor shares sink after release of study results

From Associated Press (January 29, 2013)

Shares of Anacor Pharmaceuticals Inc. plunged Tuesday after the drug developer said its potential nail fungus treatment did better than a placebo in a late stage study, but an analyst said it fared poorly compared to a rival’s product.

THE SPARK: Anacor, based in Palo Alto, Calif., said early results from the first of two late-stage studies showed that 6.5 percent of patients taking its experimental drug tavaborole achieved a complete cure of the fungal infection. That compares to less than 1 percent of patients treated with a placebo. Patients in the study applied the solution to their nail once a day for 48 weeks.

Anacor said the treatment met all the main and secondary goals of the study with a high degree of statistical significance.

The company expects to release data from its second trial in March and apply for approval of the drug by the middle of the year.

THE BIG PICTURE: Last November, Valeant Pharmaceuticals International Inc. announced results from late-stage studies of its potential nail fungus treatment, efinaconazole. The Canadian drug maker said nearly 18 percent of the patients treated with efinaconazole achieved a complete cure in one study, and more than 15 percent achieved it in another.

Valeant submitted its treatment to the Food and Drug Administration for approval and expects to hear back by the end of May, a spokeswoman said.

THE ANALYSIS: Anacor’s tavaborole met its main goal but fell short of expectations of Cowen analyst Eric Schmidt, as well as Valeant’s results, he said in a research note.

But Wedbush Securities analyst Gregory Wade said it’s clear the Anacor drug was tested on a patient population that had a wider age range and, generally, more advanced cases of the nail fungus.

"We’re pretty encouraged, we definitely think they have a product," he said.

An Anacor representative did not immediately return a call from The Associated Press seeking comment.

SHARE ACTION: Down 22 percent, or $1.12 to $4.05 in Tuesday afternoon trading. The stock bottomed at $3.83 earlier in the session, its lowest price since going public in November, 2010, at $5 per share.

Posted: January 2013