Even though this article is timed to go along with Vertex Pharmaceuticals' (NASDAQ:VRTX) release of first-quarter earnings yesterday, I'm going to skip over the financials. The company is still losing money and it has more than enough cash on hand, $334 million, to cover expenses for the foreseeable future. Investors in small biotechs don't really care too much about the financials as long as the balance sheet is in decent condition, as it is here. Drugs are the items of interest, so let's head there.

Vertex, which was my recommendation in February's Motley Fool Rule Breakers, has a deep pipeline of mostly early-stage drugs. Over the next year, that is going to change considerably because many of the products are maturing. Data from nearly everything the company or its partners, Merck (NYSE:MRK) and GlaxoSmithKline (NYSE:GSK), are working on is going to come out, and the programs that are successful are going to take a step forward.

The company's first shot at launching a drug it will market itself is merimepodib, for treating hepatitis C (HCV). Merimepodib is in a phase 2b study in combination with PEG-interferon and ribavirin in patients who did not respond to prior treatment with PEG-interferon and ribavirin. The company will have data from this study by the end of this year to take to the Food and Drug Administration to discuss what steps need to be taken to get the drug approved. That would be a major event because it would start the clock on when merimepodib could get approved and start generating revenue for the company.

While merimepodib is the near-term story, VX-950 is the potential future blockbuster, and it also treats HCV. This is a unique drug that hits the hepatitis C virus directly, stopping it from making more copies of itself. It's very early in clinical development and is just now being used for the first time in patients with HCV. Data from this trial will be released on May 17 during a Digestive Disease Week meeting.

That will be a big day for Vertex because it will show how well VX-950 knocks down viral levels. Just as important, though, is moving VX-950 forward into phase 2 clinical trials. The company is committed to filing an investigational new drug application to start phase 2 with the FDA in the second half of this year. For Vertex investors, the phase 2 trials will be the story to watch over the next two years. They will provide the data that says whether or not Vertex has a major drug on its hands.

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Fool contributor Charly Travers is the Motley Fool Rule Breakers biotech analyst. He owns shares of Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.