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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotechnology company Vertex Pharmaceuticals (Nasdaq: VRTX ) dropped as much as 17% after the company reported much-worse-than-expected third-quarter results.
So what: For the quarter, Vertex reported a 40% decline in Incivek sales over the year-ago period and a loss of $0.27 per share -- which includes a $57.6 million charge related to expected future payments to Alios BioPharma. Vertex did stick with its full-year forecast for Incivek sales of $1.1 billion to $1.25 billion; however, it made it clear that it's begun its focus on creating the next generation of hepatitis-C treatments that aren't interferon-based. Vertex announced that it'll be testing one of its experimental hepatitis-C therapies, VX-135, in two separate trials with Johnson & Johnson's (NYSE: JNJ ) simeprevir, and GlaxoSmithKline's (NYSE: GSK ) GSK2336805.
Now what: It's a little disconcerting to see how quickly Incivek sales are falling off, but I think it's also worth noting that few alternatives to Incivek are likely to hit the market anytime soon. Gilead Sciences' (Nasdaq: GILD ) GS7977 when combined with Bristol-Myers Squibb's (NYSE: BMY ) daclatasvir, appears to be the strongest combination candidate for hepatitis-C approval, but it may be years before it takes significant share from Incivek. Personally, I think today's fall could be a buying opportunity in Vertex.
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