Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

The following tables set forth the Company’s quarterly financial data for the two years ended December 31, 2019:



	Three Months Ended
	March 31, 2019			June 30, 2019			September 30, 2019			December 31, 2019
	(in thousands, except per share amounts)
Revenues:
Product revenues, net (1)	$	857,253		$	940,380		$	949,828		$	1,413,265
Collaborative and royalty revenues	1,182			913			—			—
Total revenues	858,435			941,293			949,828			1,413,265
Costs and expenses:
Cost of sales	95,092			135,740			131,914			185,012
Research and development expenses (2)	339,490			379,091			555,948			480,011
Sales, general and administrative expenses	147,045			156,502			159,674			195,277
Change in fair value of contingent consideration	—			—			2,959			1,500
Total costs and expenses	581,627			671,333			850,495			861,800
Income from operations	276,808			269,960			99,333			551,465
Interest income	15,615			18,076			17,628			12,359
Interest expense	(14,868		)	(14,837		)	(14,548		)	(14,249		)
Other income (expense), net (3)	42,610			53,939			(31,747		)	127,375
Income before provision for income taxes	320,165			327,138			70,666			676,950
Provision for income taxes (4)	51,534			59,711			13,148			93,716
Net income attributable to Vertex	$	268,631		$	267,427		$	57,518		$	583,234

Amounts per share attributable to Vertex common shareholders:
Net income:
Basic	$	1.05		$	1.04		$	0.22		$	2.26
Diluted	$	1.03		$	1.03		$	0.22		$	2.23
Shares used in per share calculations:
Basic	255,695			256,154			256,946			258,003
Diluted	260,175			259,822			260,473			262,108



	Three Months Ended
	March 31, 2018			June 30, 2018			September 30, 2018			December 31, 2018
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	637,729		$	749,912		$	782,511		$	868,173
Collaborative and royalty revenues	3,070			2,245			2,024			1,933
Total revenues	640,799			752,157			784,535			870,106
Costs and expenses:
Cost of sales	71,613			104,382			111,255			122,289
Research and development expenses (2)	310,553			337,532			330,510			437,881
Sales, general and administrative expenses	129,808			137,303			137,295			153,210
Restructuring (income) expenses	(76		)	62			(174		)	4
Intangible asset impairment charge	—			—			—			29,000
Total costs and expenses	511,898			579,279			578,886			742,384
Income from operations	128,901			172,878			205,649			127,722
Interest income	5,789			8,049			10,543			13,971
Interest expense	(16,886		)	(18,155		)	(18,686		)	(18,744		)
Other income (expense), net (3)	96,838			53,819			(60,995		)	(90,452		)
Income before (benefit from) provision for income taxes	214,642			216,591			136,511			32,497
(Benefit from) provision for income taxes (4)	(12,659		)	10,341			8,055			(1,492,599		)
Net income	227,301			206,250			128,456			1,525,096
(Income) loss attributable to noncontrolling interest (5)	(17,038		)	1,110			290			25,431
Net income attributable to Vertex	$	210,263		$	207,360		$	128,746		$	1,550,527

Amounts per share attributable to Vertex common shareholders:
Net income:
Basic	$	0.83		$	0.82		$	0.51		$	6.08
Diluted	$	0.81		$	0.80		$	0.50		$	5.97
Shares used in per share calculations:
Basic	253,231			254,135			254,905			254,868
Diluted	258,526			258,584			259,788			259,812


1.	In the fourth quarter of 2019, the Company updated its transaction price and recognized net product revenues of $155.8 million related to prior period ORKAMBI sales upon reaching a reimbursement agreement with the French government for ORKAMBI, including ORKAMBI distributed through early access programs. See Note A, “Nature of Business and Accounting Policies.”


2.	In the third quarter of 2019, the Company incurred research and development expenses of $175.0 million related to its CRISPR DMD/DM1 Agreement. In the fourth quarter of 2018, the Company incurred research and development expenses of $95.0 million to related license agreements with Merck KGaA, Darmstadt, Germany, and Arbor. See Note B, “Collaborative Arrangements.”


3.	In 2019 and 2018, “Other income (expense), net” was primarily related to changes in the fair value of the Company’s equity investment in CRISPR. See Note F, “Marketable Securities and Equity Investments.”


4.	In the fourth quarter of 2018, the Company released the valuation allowance on the majority of its NOLs and other deferred tax assets as of December 31, 2018 resulting in a benefit from income taxes of $1.56 billion. Starting in 2019, the Company began recording a provision for income taxes approximating statutory rates on its pre-tax income. See Note P, “Income Taxes.”

In 2018, the Company had a noncontrolling interest in BioAxone, which it consolidated as a VIE until December 31, 2018. Following the deconsolidation of BioAxone as of December 31, 2018, the Company did not have a noncontrolling interest in any entities in 2019. See Note B, “Collaborative Arrangements.”