Vertex Pharmaceuticals Inc. VRTX posted a first-quarter 2016 loss of 13 cents per share (including the impact of stock-based compensation expense), narrower than the year-ago loss of 86 cents per share but missing the Zacks Consensus Estimate of earnings of 4 cents per share.Excluding stock-based compensation expense, the company reported first quarter earnings of 9 cents per share, surpassing the year-ago loss of 62 cents.Vertex reported revenues of $398.1 million in the first quarter of 2016, well below the Zacks Consensus Estimate of $437 million but up 187.4% from the year-ago period.The Quarter in DetailVertex’s first-quarter revenues consisted of sales from cystic fibrosis (CF) products Kalydeco ($170.5 million), Orkambi ($223.1 million), collaborative ($0.07 million) and royalty revenues ($3.6 million).The company reported a 317.1% increase in Kalydeco sales (U.S.: $95 million, ex U.S.: $76 million) in the first quarter of 2016 from the year-ago period.Orkambi (lumacaftor/ivacaftor), approved for the treatment of CF in people aged 12 and older with two copies of the F508del mutation, delivered sales of $223.1 million (U.S.: $214 million, ex U.S.: $9 million), up 1.5% sequentially. As of Mar 2016, the company estimates that about 65% of the 8500 eligible patients in the U.S. have started treatment with Orkambi (more than 3,000 and more than 1,500 patients in the third and fourth quarters of 2015, respectively, and about 800 patients in the first quarter of 2016). Vertex expects the vast majority of eligible patients to start treatment by year end.Vertex is also looking to get Orkambi approved for use in children (6 - 11 years old) -- a phase III study met the primary endpoint and the company is seeking priority review in the U.S. where a regulatory application was submitted in late Mar 2016. About 2,400 children with CF in the U.S. fall in this category. A six-month phase III efficacy study in this patient population is currently ongoing to support EU approval where a regulatory application is slated to be submitted in the first half of 2017. About 3,400 children fall in this category in the EU.Adjusted (including stock-based compensation expense) research and development (R&D) expenses increased 19.1% to $256.5 million. First-quarter 2016 adjusted (including stock-based compensation expense) selling, general and administrative (SG&A) expenses increased 18.6% to $104.7 million.Raises Kalydeco Outlook, Provides Orkambi GuidanceVertex raised its guidance for Kalydeco revenues which are now expected in the range of $685 - $705 million (old guidance: $670 - $690 million). The raised outlook reflects continued increase in the number of patients initiating treatment with Kalydeco globally as well as a reduced impact from the VX-661 program.Vertex provided first-time revenue guidance for Orkambi. The company expects Orkambi revenues of $1 billion - $1.1 billion this year. Revenues are expected to grow sequentially starting from the second quarter and continuing through the end of 2016 and into 2017.The Orkambi guidance includes the assumption that 15% of patients discontinued treatment within the first three months of initiation. The company estimates that about 70% - 80% of patients will remain on treatment. Meanwhile, the overall compliance rate (reflects the number of pills actually taken by a patient in a given month), is expected to be 70% - 80%.Orkambi guidance includes sales that may result from the potential label expansion of the drug in the U.S. for the 6 to 11 years age group, expected in the second half of 2016 and sales of Orkambi outside the U.S., primarily in Germany.During the first quarter, Orkambi gained approval in Canada and Australia where a total of about 2,500 people are eligible for treatment with the drug.Vertex continues to expect operating expenses to shoot up from approximately $1.06 billion in 2015 to $1.18 - $1.23 billion in 2016. In addition to working on expanding Kalydeco's and Orkambi’s labels, Vertex is developing VX-661, VX-371 and its next-generation correctors - VX-152 and VX-440. Vertex is also looking beyond CF at therapeutic areas like cancer (VX-970), pain (VX-150), and acute spinal cord injury (VX-210) among others.Our TakeVertex’s first quarter results were disappointing with the company missing estimates on earnings and revenues falling well short of expectations. Orkambi sales also lagged expectations. Vertex’s shares are down 31.2% so far in 2016 mainly reflecting concerns about the ramp up of Orkambi. The company, which had so far not provided guidance for Orkambi sales, said that it expects Orkambi sales in the range of 1 billion - $1.1 billion in 2016. However, Orkambi guidance too fell short of expectations. Vertex’s shares were down in after-market trading.Vertex is a Zacks Rank #5 (Strong Sell) stock. Some better-ranked stocks in the biotech sector include Celgene Corporation CELG, Medivation Inc. MDVN and Gilead Sciences Inc. GILD. All three are Zacks Rank #2 (Buy) stocks.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report VERTEX PHARM (VRTX): Free Stock Analysis Report GILEAD SCIENCES (GILD): Free Stock Analysis Report CELGENE CORP (CELG): Free Stock Analysis Report MEDIVATION INC (MDVN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research