SEC Comment Letter for VERTEX PHARMACEUTICALS (VRTX) — Apr 27, 2010
VERTEX PHARMACEUTICALS INC / MA (VRTX) (CIK 0000875320)
Date: April 27, 2010 · CIK: 0000875320 · Accession: 0000000000-10-022811
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-19319
Letter
Via Facsimile and U.S. Mail Mail Stop 4720 October 23, 2009 Mr. Kenneth Boger Senior Vice President and General Counsel Vertex Pharmaceuticals Incorporated 130 Waverly Street Cambridge, MA 02139-4242
Re: Vertex Pharmaceuticals Incorporated Form 10-K for the Period Ended December 31, 2008 Form 10-Q for the Quarterly Period Ended March 31, 2009 Definitive Proxy Statement on Schedule 14A filed April 8, 2009 File No. 000-19319
Dear Mr. Boger:
We have reviewed your August 31, 2009 res ponse to our July 8, 2009 letter and have the following comments. In our comments, we ask you to provide us with information to better understand your di sclosure. Where a comment requests you to revise disclosure, the information you provide should show us what the revised disclosure will look like and identify the annual or interi m filing, as applicable, in which you intend to first include it. If you do not believe that revised disclosure is necessary, explain the reason in your response. Pleas e note that comments two and three were previously issued verbally to you on October 7, 2009. After re viewing the information provided, we may raise additional comments and/or request that you amend your filing.
Definitive Proxy Statement on Sc hedule 14A filed on April 13, 2009
Compensation Discussion and Analysis 2008 Compensation Decisions for Perfor mance-Based Elements, page 29
1. We note your response to our prior comment 4. However, your response does not appear to address our concerns. To the extent that your four high-level goals are more specifically defined than the disclosure in your document, they should be more specifically described. For example, one of the goals is to “meet or exceed timelines in clinical, regulatory, quality, manufacturing and commercial operations toward a successful launch of telaprevir.” If the goals, as communicated to your executives, are more specific as to these timelines, these timelines should be described. If you belie ve that a more specific disclosure of these goals would be competitively harmful, please provide us with an analysis supporting your belief. The analysis should identify the information that you
Mr. Kenneth Boger Vertex Pharmaceuticals Incorporated October 23, 2009 Page 2 believe would cause competitive harm, describe the competitive harm you are likely to experience if the informati on is disclosed and explain why this information is not material to investors. We will not be in a position to assess the likelihood of competitive harm if we do not know what the specific goals are. Please be advised that you may request confidential treat ment for portions of your response pursuant to Rule 83. Please pr ovide proposed disclosure for your 2010 proxy statement.
Additionally, comment 4 indicated that wh en information relating to targets and goals is not provided on the basis that disc losure is not material and is likely to cause competitive harm, you must disc uss how difficult it will be for the executive or how likely it will be for the company to achieve the undisclosed goals or targets. Your response directs our attention to the disclosure relating to the level of achievement which is not the same as a discussion of the level of difficulty to achieve the stated goals and ta rgets. If you continue to believe that your goals and targets qualify for confiden tial treatment, please discuss the level of difficulty related to the undi sclosed goal(s) or target(s).
Form 10-Q for the Quarterly Period Ended March 31, 2009
9. Acquisition of ViroChem Pharma Inc.
Preliminary Allocation of Asse ts and Liabilities, page 18
2. We acknowledge your response to comment seven (a). Although the nature, timing and estimated costs of the efforts to complete the development of VX-222 and VX-759 are subject to risks and un certainties, we do not understand why meaningful estimates are not available when it would appear that these costs are a significant component of the cash flow a ssumptions inherent in your fair value assessment of these projects. Please revise your disclosure to provide the nature, timing and estimated costs to complete thes e projects as utilized in your fair value assessment.
3. We acknowledge your response to comment seven (c). Please address the following additional comments: • You indicate that you did not ascribe va lue to ViroChem’s other preclinical programs and other technologies becaus e market participants would be unlikely to ascribe value to them. Please tell us how many other preclinical programs and other technologies you acquired from ViroChem and the associated treatment indications. • It appears that you based the $7.2 milli on fair value assigned to the VCH-286 intangible asset based on the de velopment costs incurred through the acquisition date. Please demonstrat e to us how the value assigned is consistent with that derived by a market participant and how it complies with the guidance in paragraph 33 of SFAS 141R . Please revise your disclosure accordingly.
Mr. Kenneth Boger Vertex Pharmaceuticals Incorporated October 23, 2009 Page 3
* * * *
Please provide us the information request ed within 10 busine ss days or tell us when you will provide us with a response. Pl ease furnish a cover le tter with your response that keys your response to our comments. De tailed cover letters gr eatly facilitate our review. Please furnish your letter on EDGAR under the form type label CORRESP.
Please contact Kei Ino, Staff Accountant, at (202) 551-3659 or Mark Brunhofer, Senior Staff Accountant, at (202) 551-3638 if you have questions regarding the processing of your response as well as any questions regarding comments on the financial statements and related matters. You may c ontact Mike Rosenthall, Staff Attorney at (202) 551-3674 or Jennifer Riegel, Staff Atto rney at (202) 551-3575 with questions on the Definitive Proxy Statement comment. In th is regard, do not hesitate to contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
Show Raw Text
Via Facsimile and U.S. Mail
Mail Stop 4720
October 23, 2009
Mr. Kenneth Boger
Senior Vice President and General Counsel
Vertex Pharmaceuticals Incorporated
130 Waverly Street
Cambridge, MA 02139-4242
Re: Vertex Pharmaceuticals Incorporated
Form 10-K for the Period Ended December 31, 2008
Form 10-Q for the Quarterly Period Ended March 31, 2009
Definitive Proxy Statement on Schedule 14A filed April 8, 2009
File No. 000-19319
Dear Mr. Boger:
We have reviewed your August 31, 2009 res ponse to our July 8, 2009 letter and
have the following comments. In our comments, we ask you to provide us with
information to better understand your di sclosure. Where a comment requests you to
revise disclosure, the information you provide should show us what the revised disclosure
will look like and identify the annual or interi m filing, as applicable, in which you intend
to first include it. If you do not believe that revised disclosure is necessary, explain the
reason in your response. Pleas e note that comments two and three were previously issued
verbally to you on October 7, 2009. After re viewing the information provided, we may
raise additional comments and/or request that you amend your filing.
Definitive Proxy Statement on Sc hedule 14A filed on April 13, 2009
Compensation Discussion and Analysis
2008 Compensation Decisions for Perfor mance-Based Elements, page 29
1. We note your response to our prior comment 4. However, your response does not
appear to address our concerns. To the extent that your four high-level goals are
more specifically defined than the disclosure in your document, they should be more specifically described. For example, one of the goals is to “meet or exceed
timelines in clinical, regulatory, quality, manufacturing and commercial
operations toward a successful launch of telaprevir.” If the goals, as
communicated to your executives, are more specific as to these timelines, these
timelines should be described. If you belie ve that a more specific disclosure of
these goals would be competitively harmful, please provide us with an analysis
supporting your belief. The analysis should identify the information that you
Mr. Kenneth Boger
Vertex Pharmaceuticals Incorporated
October 23, 2009
Page 2
believe would cause competitive harm, describe the competitive harm you are
likely to experience if the informati on is disclosed and explain why this
information is not material to investors. We will not be in a position to assess the
likelihood of competitive harm if we do not know what the specific goals are. Please be advised that you may request confidential treat ment for portions of your
response pursuant to Rule 83. Please pr ovide proposed disclosure for your 2010
proxy statement.
Additionally, comment 4 indicated that wh en information relating to targets and
goals is not provided on the basis that disc losure is not material and is likely to
cause competitive harm, you must disc uss how difficult it will be for the
executive or how likely it will be for the company to achieve the undisclosed
goals or targets. Your response directs our attention to the disclosure relating to
the level of achievement which is not the same as a discussion of the level of
difficulty to achieve the stated goals and ta rgets. If you continue to believe that
your goals and targets qualify for confiden tial treatment, please discuss the level
of difficulty related to the undi sclosed goal(s) or target(s).
Form 10-Q for the Quarterly Period Ended March 31, 2009
9. Acquisition of ViroChem Pharma Inc.
Preliminary Allocation of Asse ts and Liabilities, page 18
2. We acknowledge your response to comment seven (a). Although the nature,
timing and estimated costs of the efforts to complete the development of VX-222
and VX-759 are subject to risks and un certainties, we do not understand why
meaningful estimates are not available when it would appear that these costs are a
significant component of the cash flow a ssumptions inherent in your fair value
assessment of these projects. Please revise your disclosure to provide the nature,
timing and estimated costs to complete thes e projects as utilized in your fair value
assessment.
3. We acknowledge your response to comment seven (c). Please address the
following additional comments:
• You indicate that you did not ascribe va lue to ViroChem’s other preclinical
programs and other technologies becaus e market participants would be
unlikely to ascribe value to them. Please tell us how many other preclinical programs and other technologies you acquired from ViroChem and the
associated treatment indications.
• It appears that you based the $7.2 milli on fair value assigned to the VCH-286
intangible asset based on the de velopment costs incurred through the
acquisition date. Please demonstrat e to us how the value assigned is
consistent with that derived by a market participant and how it complies with
the guidance in paragraph 33 of SFAS 141R . Please revise your disclosure
accordingly.
Mr. Kenneth Boger
Vertex Pharmaceuticals Incorporated
October 23, 2009
Page 3
* * * *
Please provide us the information request ed within 10 busine ss days or tell us
when you will provide us with a response. Pl ease furnish a cover le tter with your response
that keys your response to our comments. De tailed cover letters gr eatly facilitate our
review. Please furnish your letter on EDGAR under the form type label CORRESP.
Please contact Kei Ino, Staff Accountant, at (202) 551-3659 or Mark Brunhofer,
Senior Staff Accountant, at (202) 551-3638 if you have questions regarding the
processing of your response as well as any questions regarding comments on the financial
statements and related matters. You may c ontact Mike Rosenthall, Staff Attorney at
(202) 551-3674 or Jennifer Riegel, Staff Atto rney at (202) 551-3575 with questions on
the Definitive Proxy Statement comment. In th is regard, do not hesitate to contact me, at
(202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant