Vertex Pharmaceuticals Incorporated

Good evening. This is Michael Partridge, Senior Vice President of Investor Relations. Tonight, we will review with you Vertex's business progress and provide our third quarter financial results. Making prepared remarks on the call tonight, we have Dr. Jeff Lydon, Chairman and CEO, Stuart Arbuckle, Chief Commercial Officer, Dr. Reshma Kewalramani, Chief Medical Officer, and Charlie Wagner, Chief Financial Officer. We recommend that you access the webcast slides on our website as you listen to this call. This conference call is being recorded and a replay will be available on our website. We will make forward-looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and our filings with the Securities and Exchange Commission. These statements, including without limitation, those regarding Vertex's marketed CF medicines, the continuing development and commercialization of our triple combination regimens for cystic fibrosis, Vertex's other programs, and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially. I will now turn the call over to Dr. Jeff Lydon.

Thanks, Michael. Good evening, everyone. 2019 has been a year of significant progress for Vertex across all parts of our business as we've continued to execute on our clear and differentiated strategy to create transformational medicines by investing in serial scientific innovations. Our significant growth in revenues from treating more people with CF globally has enabled continued investment in both internal and external innovation to create future medicines. And we are making rapid progress across our pipeline in our efforts to advance additional potentially transformative medicines, both in CF and multiple other serious diseases. Our strategy is working and has positioned the company for continued growth in 2020 and for years to come. I'm pleased to review with you some of our recent accomplishments. First, the CF. I'm proud to say that last week's FDA approval for Trikafta marks the most significant step to date in our more than 20-year journey toward our future goal of curing CF for every person with this disease. I joined Vertex as CEO eight years ago, right before we received our first approval for Kalydeco to treat the cause of CF for a small group of patients in the U.S., Today, approximately 45,000 patients worldwide are eligible for one of our four CF medicines, and we're treating thousands of patients in more than 30 countries around the world. I would like to again thank the patients, families, caregivers, physicians, and advocates, as well as the CF Foundation, who have been on this journey with us over the past two decades. The approval of Trikafta would not have been possible without the unwavering support of the entire CF community. I would also like to highlight the significant progress we've made throughout 2019 in securing reimbursement for our medicines outside the U.S. Most notably, we recently announced new reimbursement agreements for Acambi and Simkevi in England, Spain, Australia, and Scotland. I'm pleased that eligible patients in these countries now have a medicine to treat the underlying cause of their CF for the first time, and that we were able to work collaboratively with governments to reach agreements that appropriately value the scientific innovation, and clinical benefit of our medicines. Now to our pipeline. Today we have multiple different potentially transformative medicines in clinical development spanning five specialty diseases. And we're entering a period of significant clinical development progression and data generation for these programs. In fact, we expect multiple proof of concept data readouts and the initiation of key proof of concept studies through 2020 that will represent important risk lowering events for our pipeline. Our pipeline investments have for several years followed a disciplined strategy focused on causal biology, building highly predictive preclinical models, and developing biomarkers early in development to lower risk and increase our probability of success in the clinic. And we only work on transformative medicines for serious diseases that create and sustain significant value for patients, society, and our shareholders. Our external investments are aligned with this strategy and encompass multiple therapeutic modalities. We have increased our external investment in line with our growing cash flow by acquiring new development programs and building a toolkit of new technologies that will enable us to develop breakthrough medicines in diseases such as type 1 diabetes, Duchenne muscular dystrophy, hemoglobinopathies, and others. Most recently, we acquired Sematherapeutics with the goal of developing a cellular therapy that both alone and in combination with an implantable device, has the potential to cure type 1 diabetes. This acquisition is a perfect example of our efforts to bring in promising development programs that complement our internal R&D efforts, are aligned with our strategy, and provide significant opportunities for further growth beyond CF. The execution of our corporate and research strategies has produced a highly differentiated profile for both near-term and long-term growth. As we continue to expand access to our medicines worldwide and gain approvals for new medicines, we are well positioned for further revenue and earnings growth and for continued reinvestment in innovation to create future medicines. I look forward to updating you on our progress over the coming months, and we'll now turn the call over to Stuart to talk in more detail about our commercial performance and the launch of Trikafta.

Thanks, Jeff. Tonight, I'll briefly review our commercial performance for the third quarter and discuss our expectations for the ongoing launch of Trikafta in the U.S. Our third quarter total product revenues were $950 million, a 21% increase compared to the third quarter of 2018. This increase is as a result of treating more patients globally with our medicines. Uptake across multiple products and in multiple populations drove revenue growth over the past year. most notably from Symdeco and Symkevi in patients ages 12 and older. We also saw revenue growth as a result of expansion into younger patients, including children in the U.S. ages 2 to 5 years for Orkambi and ages 6 to 11 years for Symdeco. Outside the U.S., we continue to make progress in achieving reimbursement for our CF medicines, Orkambi and Symkevi. as evidenced by our recent announcements regarding reimbursement in England, Spain, Scotland, and Australia. Together, our progress in these countries underscores the positive outcomes that can be achieved when we and governments work collaboratively and flexibly toward providing access for patients. Now to the approval and launch of Trikafta in the U.S. Trikafta is Vertex's fourth medicine to treat the underlying cause of CF, and was approved by the FDA last week to treat people with CF ages 12 years and older with at least one F508 del mutation. The speed of the FDA approval is a reflection of not only the strength of the Trikafta data, but also of the community's shared urgency to provide patients with a medicine that treats the underlying cause of their disease. And I am pleased to report that the first patients have already been prescribed Trikafta by their physicians, underscoring the strong interest in the medicine. The label for Trikafta is broad. Any patient in the US aged 12 years or older with at least one F508 del mutation is eligible. We estimate that there are approximately 18,000 patients in the US who fit these criteria, representing by far the largest population of CF patients eligible for one of our CF medicines at the time of launch. Of the 18,000 patients eligible for Trikafta, approximately 6,000 are those with one F508 del mutation and one minimal function mutation, who until now have not had treatment for the underlying cause of their CF. The remaining approximately 12,000 patients are those who were already eligible for one of our CF medicines, and most of these patients are currently being treated with Kalydeco or Camby or Symdeco. Revenue growth in 2020 will be driven primarily by treatment of new minimal function patients. And over time, we expect that the vast majority of the 6,000 new minimal function patients will be treated with Trikafta. We also expect that a significant proportion of patients currently on Kalydeco or Camby or Symdico will switch to Trikafta over time. The large number of eligible patients coupled with the capacity constraints of CF centers to schedule and actually initiate such a large volume of patients are important factors in why it may take longer for the Trikafta launch to reach its peak level of uptake compared to prior launches. Reimbursement is an additional factor in the launch of Trikafta. We expect to obtain broad reimbursement from both commercial and government payers in the U.S., similar to our experience with prior CF medicines. We've already begun discussions with payers following the approval, and the initial feedback has been positive, based on the strength of the clinical data and payers' understanding of the disease-modifying benefits that our medicines provide. These dynamics are reflected in our updated total 2019 CF revenue guidance of $3.7 to $3.75 billion that we provided at the time of the Trikafta approval last week. We will also take these factors, as well as early uptake trends, into account as we set guidance for 2020 early next year. In summary, I'm pleased that we are bringing our medicines to many more patients around the globe, and with the trajectory of our continued revenue growth. With that, I will now turn the call over to Reshma to review recent pipeline progress.