By Karen Pihl-Carey

Vertex Pharmaceuticals Inc. plans to offer $200 million of convertible subordinated notes in a private offering, with net proceeds going toward the funding of research and development activities, as well as clinical trials.

The notes, due 2007, will be convertible into Vertex common stock at the option of the holder at a price to be determined. The company expects the offering to close this month. Bound by SEC rules, the company could not comment on the offering.

Vertex will file a registration statement for the resale of the notes and the shares of common stock issuable upon conversion of the notes within 90 days after the offering closes.

Net proceeds will go to fund research, development and clinical trials, and to working capital and other general corporate purposes. Vertex may use a portion of the proceeds for the acquisition of additional technologies that would further its R&D activities.

For the year ended Dec. 31, Vertex posted revenues of $61.65 million, with a net loss of about $41 million, or $1.61 per share. The company had about 25.5 million shares outstanding and a cash balance of about $187.8 million.

Last summer, Vertex signed an expanded agreement with Aventis SA, formerly Hoechst Marion Roussel AG, of Frankfurt, Germany, to develop HMR 3480/VX-740, an orally active inhibitor of interleukin-1 beta converting enzyme, for three different indications, one of which is rheumatoid arthritis. The others indications have not been disclosed. Vertex received $15 million in initial payments and milestone payments for this agreement, which has a total pre-commercial value of more than $200 million for the company. (See BioWorld Today, Sept. 2, 1999, p. 1.)

Then, in November, Vertex signed a deal with Taisho Pharmaceutical Co. Ltd., of Tokyo, to discover, develop and commercialize caspase inhibitors to treat cerebrovascular, cardiovascular and neurodegenerative diseases. The deal is potentially worth $43 million. (See BioWorld Today, Nov. 30, 1999, p. 1.)

Vertex has a strategy to capitalize on emerging genomic information by targeting large families of structurally related proteins for drug discovery. It has candidates in the clinic to treat viral diseases, inflammation, cancer, autoimmune diseases and neurological disorders. Its lead product, Agenerase (amprenavir), an HIV protease inhibitor co-promoted by London-based Glaxo Wellcome plc, was approved by the FDA in April to treat viral diseases.

The company's stock (NASDAQ:VRTX) closed Friday at $80, up $4.28.