Macro Tsimmis

intelligently hedged investment

Vertex (VRTX) update #28

Posted by intelledgement on Sun, 12 Jul 09


Vertex Pharmaceuticals (VRTX) have come up with a cash-raising mechanism that does not require the dilution of all existing shares: they are selling their rights to receive $250 million in milestone payments from Janssen Pharmaceutica N.V., a Johnson & Johnson (JNJ) company, for the successful development and launch of their hepatitis C drug, telaprevir, in the European Union. Shareholders reeling from a succession of dilutive secondaries and other transactions—seven million shares sold in Feb 08, nine million shares sold in Sep 08, ten million shares sold in Feb 09, ten million shares issued to the owners of ViroChem Pharma in Mar 09 to acquire that company, seven million shares exhanged with bondholders to retire convertible notes due 2013 in Jun 09—were presumably happy to see the company raise funds without issuing any new shares for once.

According to the press release, “Morgan Stanley is acting as a structural advisor to Vertex in connection with this transaction.”

Previous VRTX-related posts:


One Response to “Vertex (VRTX) update #28”

  1. Here is an interesting article on the significance of this transaction from the credit securitization point of view. Evidently the securitization of intellectual property rights Morgan Stanley are performing here is cutting edge stuff, particularly these days, with securitization activity much reduced since the 2008 meltdown (Morgan Stanley have handled 17 such drug IP securitzation transactions previously, but this is the first post-Lehman).

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