I had missed that $30 mil in related expenses. What the heck could that be? I thought the sale of Pan Vera was a so-so salvage move before seeing that, but now I think it looks pretty poor.
When the history of Vertex is written, and I have to say that at this point, it seems like someone will be able to write a definitive final history in a few years, I expect that three events will stand out as responsible for sinking the ship: 1) The Aurora purchase and subsequent sale at pennies on the dollar; 2) The Novartis deal; and 3) The Kendall Square building. (1) and (3) are responsible for squandering hundreds of millions in total. (1) and (2) are responsible for the fact that Vertex grew itself out too fast and now has such a heaving expensive infrastructure and payroll that their options are limited.
Vertex supporters will argue, I am sure, that the problem is "September 11" and how that devastated the investment climate. No way. Without 9/11 the Aurora deal would still look like a dog and the Novartis deal would still have forced Vertex to staff up too quickly. Maybe without 9/11 Vertex those convertible bonds wouldn't be looming as a noose around their neck. But maybe they should have done a stock sale instead of a second round of convertibles. Lots of maybes.
But here's something that for sure true: The people responsible for the Aurora travesty are still at Vertex. The people responsible for the Novartis deal are still at Vertex. The people responsible for the Kendall Square building are mostly still at Vertex. (Rich Aldrich being the exception, and for his parting gift of leasing that building at the absolute peak of the market, Vertex agreed to keep him around as "consultant" and pay him a huge salary and let his options continue to vest for years after he left! Read the disclosures that came with the annual reports.)
As I see my investment sink slowly but surely further and further into the bottomless sea, I get more and more frustrated with the lack of accountability at the top of Vertex. Nothing new there, of course. The same thing happens across all industry. But there hasn't been even a SINGLE housecleaning at the top of Vertex in the, what, 13 years the company has been around. A lot of dust bunnies accumulate under the bed in that amount of time.