The following table sets forth the Company’s quarterly financial data for the two years ended December 31, 2017.



	Three Months Ended
	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	480,622		$	513,988		$	549,642		$	621,228
Royalty revenues	1,551			2,861			2,231			1,345
Collaborative revenues (1)	232,545			27,286			26,292			29,061
Total revenues	714,718			544,135			578,165			651,634
Costs and expenses:
Cost of product revenues	46,242			70,535			72,186			83,712
Royalty expenses	746			670			688			340
Research and development expenses (2)	273,563			289,451			454,947			306,664
Sales, general and administrative expenses	113,326			127,249			120,710			134,794
Restructuring expenses	9,999			3,523			337			387
Intangible asset impairment charge (3)	—			—			255,340			—
Total costs and expenses	443,876			491,428			904,208			525,897
Income (loss) from operations	270,842			52,707			(326,043		)	125,737
Interest expense, net	(16,765		)	(14,664		)	(13,574		)	(12,547		)
Other expense, net (3)	(544		)	(2,537		)	(77,553		)	(748		)
Income (loss) before provision for (benefit from) income taxes	253,533			35,506			(417,170		)	112,442
Provision for (benefit from) income taxes (3)	3,985			4,337			(125,903		)	10,257
Net income (loss)	249,548			31,169			(291,267		)	102,185
(Income) loss attributable to noncontrolling interest (3)	(1,792		)	(13,173		)	188,315			(1,501		)
Net income (loss) attributable to Vertex	$	247,756		$	17,996		$	(102,952	)	$	100,684

Amounts per share attributable to Vertex common shareholders:
Net income (loss):
Basic	$	1.01		$	0.07		$	(0.41	)	$	0.40
Diluted	$	0.99		$	0.07		$	(0.41	)	$	0.39
Shares used in per share calculations:
Basic	246,024			247,521			250,268			251,557
Diluted	248,700			251,635			250,268			256,804



	Three Months Ended
	March 31, 2016			June 30, 2016			September 30, 2016			December 31, 2016
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	394,410		$	425,651		$	409,689		$	453,882
Royalty revenues	3,596			5,282			3,835			3,887
Collaborative revenues	74			675			259			937
Total revenues	398,080			431,608			413,783			458,706
Costs and expenses:
Cost of product revenues	49,789			44,154			53,222			59,646
Royalty expenses	860			1,098			855			836
Research and development expenses (4)	255,860			271,008			272,370			248,452
Sales, general and administrative expenses	105,214			111,652			106,055			109,908
Restructuring expenses	687			343			8			224
Total costs and expenses	412,410			428,255			432,510			419,066
(Loss) income from operations	(14,330		)	3,353			(18,727		)	39,640
Interest expense, net	(20,698		)	(20,155		)	(20,140		)	(20,439		)
Other income (expense), net	4,411			(1,219		)	(167		)	1,105
(Loss) income before provision for (benefit from) income taxes	(30,617		)	(18,021		)	(39,034		)	20,306
Provision for (benefit from) income taxes	5,485			18,130			503			(7,453		)
Net (loss) income	(36,102		)	(36,151		)	(39,537		)	27,759
(Income) loss attributable to noncontrolling interest	(5,529		)	(28,374		)	696			5,186
Net (loss) income attributable to Vertex	$	(41,631	)	$	(64,525	)	$	(38,841	)	$	32,945

Amounts per share attributable to Vertex common shareholders:
Net (loss) income:
Basic	$	(0.17	)	$	(0.26	)	$	(0.16	)	$	0.13
Diluted	$	(0.17	)	$	(0.26	)	$	(0.16	)	$	0.13
Shares used in per share calculations:
Basic	243,831			244,482			244,920			245,454
Diluted	243,831			244,482			244,920			247,757

In the first quarter of 2017, the Company recognized $230.0 million of collaborative revenues related to an upfront payment from Merck KGaA pursuant to the Company’s collaboration with Merck KGaA. In each of the second and third quarters of 2017, the Company recognized $20.0 million of collaborative revenues related to payments that Parion, which was a variable interest entity during these periods, received from Shire pursuant to a license agreement. In the fourth quarter of 2017, the Company recognized $25.0 million of collaborative revenues related to a milestone achieved pursuant to its license agreement with Janssen Inc. pursuant to which Janssen is developing JNJ-63623872 for the treatment of influenza. See Note B, “Collaborative Arrangements and Acquisitions,” for further information.


2.	In the third quarter of 2017, the Company incurred research and development expenses of approximately $160.0 million to acquire certain CF assets including VX-561 from Concert. See Note B, “Collaborative Arrangements and Acquisitions,” for further information.

In the third quarter of 2017, the Company recorded a $255.3 million intangible asset impairment charge related to Parion’s pulmonary ENaC platform indefinite-lived in-process research and development asset, a decrease in the fair value of the contingent payments payable by the Company to Parion of $69.6 million and benefit from income taxes of $126.2 million resulting from these charges. These charges and benefit from income taxes were attributable to noncontrolling interest. See Note B, “Collaborative Arrangements and Acquisitions,” and Note J, “Intangible Assets and Goodwill,” for further information.

In the second quarter of 2016, the Company incurred research and development expenses of approximately $10.0 million to acquire certain early-stage research assets. In the third quarter of 2016, the Company incurred research and development expenses related to a $20.0 million upfront payment to Moderna Therapeutics, Inc. See Note B, “Collaborative Arrangements and Acquisitions,” for further information.