Vertex Pharmaceuticals Incorporated

Good evening. Welcome to the Vertex first quarter 2021 financial results conference call. This is Michael Partridge, Senior Vice President of Investor Relations for Vertex. Making prepared remarks on the call tonight, we have Dr. Reshma Kewalramani, Vertex's CEO and President, Stuart Arbuckle, Chief Commercial and Operations 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 in our filings with the Securities and Exchange Commission. These statements, including without limitation, those regarding Vertex's marketed CF medicines, our pipelines, Expectations regarding the closing of the CRISPR transaction, which is subject to antitrust clearance, and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially. I would also note that we will review select non-GAAP financial results and guidance this evening. I will now turn the call over to Dr. Reshma Kewal-Rahmani.

Thank you, Michael. Our goal is to continue to transform cystic fibrosis and other serious diseases and in so doing, reach more patients and drive future growth. One quarter into 2021, I'm very pleased with the progress we're making across the board in support of this goal. We are treating more patients with our CFTR modulators than ever before, and our clinical pipeline, spanning seven disease areas and three modalities, has advanced significantly. In addition, we continue to execute on our strategy to use external innovation to complement our internal innovation efforts, including two new deals announced already this year. I'll start with CF. Vertex has built an exceptionally strong and durable franchise and earned a leadership position in cystic fibrosis. Our CF medicines have transformed the treatment of this disease, and we continue to significantly increase the number of patients we're treating. Our first quarter revenues totaled more than $1.7 billion, which represents a 14% year-over-year growth. and reflects the high level of treatment penetration of Trikafta in the U.S. and StrongCaftria launch in international markets. We're poised for continued significant growth in the coming years as we achieve additional approvals and reimbursement agreements for our medicines globally and as we bring our medicines to younger patients. The clinical benefit that the triple combination delivers is remarkable, and with this medicine, we believe we can treat 90% of all people with CF. But we are not stopping there. We're investing to bring new and potentially better regimens, such as the VX121-561-Tezacaftor combination to patients. This new combination is a once-a-day regimen with potential for enhanced patient benefit as well as enhanced economics with a reduced royalty obligation. Finally, we remain committed to and are making progress in developing genetic therapies for the remaining 10% of CF patients. In summary, consistent with our strategy to bring transformative medicines to all patients with CF, the combination of label expansion, additional approvals, and reimbursement agreements, and the next generation of products will continue to provide significant top and bottom line growth in the coming years. Let me turn to our clinical pipeline, which includes programs in seven disease areas and spans small molecules, cell, and genetic therapies. We have made substantial progress across the breadth of the pipeline and are poised for multiple data readouts in the next 6 to 12 months. First, CTX001. CTX001 is our most advanced program beyond CF. In the last year, we've generated remarkable clinical data that demonstrates the potential of this therapy to be a one-time functional cure for patients suffering from sickle cell disease and beta thalassemia. CTX001 has been granted RMET fast track, and rare pediatric disease designations from the FDA for both sickle cell disease and beta-thalassemia, as well as prime designation from the EMA for both diseases. With the compelling clinical profile and rapid progress of CTX001 towards registration and commercialization, now is the ideal time for Vertex to take the lead for this program and bring the full breadth of our development, regulatory, manufacturing, and commercialization expertise so that we can reach all eligible patients who may benefit from CTX001 as quickly as possible. As Stuart will discuss in a moment, there are nearly 170,000 patients with sickle cell disease and beta thalassemia in the US and Europe, of whom 32,000 patients have severe disease and we believe will be eligible for CTX001 therapy with the current conditioning regimen. This number could extend significantly once gentler conditioning regimens are available. To date, more than 30 patients have been dosed with CT-XR01, and we anticipate sharing updated data from the ongoing sickle cell and transfusion-dependent thalassemia studies with more patients and longer duration of follow-up at upcoming medical meetings this year. We also expect a complete enrollment in both of these studies this year. Lastly, while we have initiated, we have not yet completed our discussions with regulators regarding filing expectations. Based on conversations to date, we believe regulatory submissions for approval of CTX001 may be possible in the next 18 to 24 months. We'll provide further details as we conclude our discussions. Moving on to the AATD program. Our approach targets the underlying cause of this disease by using a small molecule corrector to appropriately fold the misfolded ZAAT protein. We believe this is the optimal approach for treating AATD, and it is the only approach that addresses both the lung and liver manifestations of the disease. VX864 is our most advanced molecule in the program. We have completed enrollment, and recently, we also completed dosing in the phase two proof of concept study of VX864. Patients are now in the process of completing the 28-day safety follow-up period. We are on track for a data readout later this quarter. Turning to APOL1-mediated kidney disease. APOL1-mediated kidney disease is a particularly aggressive form of renal disease characterized by pertinuria, declining renal function, and progression to ESRD. Our lead molecule in this program, VX147, is being studied in a Phase II proof-of-concept study in APOL1-mediated FSGS, evaluating safety, pharmacokinetics, and reduction of proteinuria in patients over the course of 13 weeks. We expect to have the results from this study in the second half of 2021. Next, turning to our pain program. Earlier this week, we announced that we plan to advance VX548, the next lead molecule in our pain program, into Phase II development. With VX150, we were the first to validate the NAV1.8 target with three positive Phase II proof of concept trials in three different pain indications. The recent decision to move VX548 to Phase II was based on supportive Phase I data in healthy volunteers, including safety, tolerability, and pharmacokinetics. In these studies, the molecule exhibited a favorable profile, at doses considerably lower than those required with our previous NAV1.8 inhibitors. The Phase II studies will evaluate the safety and efficacy of VX548 in the treatment of acute pain following bunionectomy and also in abdominoplasty. These are well-characterized settings for the evaluation of two broad categories of acute pain, visceral and nonvisceral, and we expect the studies to start in the second half of this year. In our type 1 diabetes program, we received FDA fast-track designation for the self-alone study and initiated the phase 1-2 study in patients with difficult-to-treat type 1 diabetes in Q1. Screening is now open, and we look forward to providing updates on our progress this year. With those comments, I'll hand it off to Stuart.

Thank you, Reshma. Today, I am pleased to review with you our Q1 commercial performance and our excitement about the prospects for CTX001. One year into the pandemic, our CF revenues continued to grow. Our Q1 global revenues were $1.7 billion. driven by continued strong execution in both the U.S. and the EU. Our performance in the U.S. continues to be impressive. To date, nearly all eligible CF patients in the U.S. have initiated treatment with Trikafta, based on the original approval in patients 12 years and older with at least one F508 del mutation, and persistence and compliance remain high among these patients. In December 2020, Trikafta's approval was expanded in the U.S., to include patients 12 years and older with rare mutations. Many of these patients have now initiated treatment as well, and we are pleased by the uptake we have seen in this newly eligible group. Outside of the US, in markets where patients have access, the adoption of Caftreo is just as impressive as in the US. We have seen rapid uptake, particularly in the UK and Germany, and persistence and compliance are similarly strong, reflecting the very favorable risk-benefit profile of CAF TRIO. Our ex-UF revenues in Q1 were $470 million, 43% higher than the same period last year, primarily due to the successful launch of CAF TRIO. Earlier this year, we shared our updated estimate that there are approximately 83,000 people living with CF in the US, Europe, Canada, and Australia. Today, we are treating about half of all patients, leaving an additional 30,000 patients who could benefit from our medicines, but who are not yet treated. Going forward, we are very confident that we will be able to reach these patients. Approximately two-thirds of the untreated patients are 12 and older. and we expect we will be able to treat these patients through the ongoing launch, uptake, and reimbursement of Cafetrio outside the U.S. In countries where we have regulatory approval and reimbursement, our teams are working hard to reach all eligible patients who could benefit from Cafetrio. In countries such as France, Spain, and Australia, where we have regulatory approval but have not yet secured reimbursement, Our teams continue to make progress to ensure access and we are confident that we will be able to secure reimbursement in the remaining large markets. For example, Trikafta was recently approved in Australia and we are committed to continuing to work collaboratively with the Pharmaceutical Benefits Advisory Committee there to ensure all 2,200 patients who can benefit from treatment have government-funded access to Trikafta as quickly as possible. Lastly, in Canada, we are still awaiting regulatory approval, and we expect approval there in the second half of this year. The majority of the remaining approximately 10,000 patients are younger than 12. Our work to secure approvals for these younger patient populations is ongoing, and we are making good progress here. We anticipate approval of Trikafta in 6- to 11-year-olds in the U.S. in mid-2021, and have filed the regulatory submission for this population in Europe as well. In summary, our continued progress in achieving label expansion, new approvals and reimbursements, and development of new products will drive continued growth in the years to come. In all of this, we are grateful for the tireless work and continued support of the global CF community. Let's now turn to CTX001, which is our next medicine that is rapidly advancing toward regulatory submissions and commercialization. Given the tremendous progress of CTX001 that we and our partners at CRISPR have made, as well as Vertex's established expertise in development, manufacturing, regulatory, and commercialization in serious diseases, both companies believe that having Vertex lead all aspects of the CTX001 program going forward would provide for the most efficient and expeditious path to bring this medicine to patients. By doing this, we aim to ensure a coordinated global launch, which will maximize the potential of this program for both patients and our shareholders. TTX001 is a groundbreaking therapy that has demonstrated great momentum, with the potential to be the first approved genetic therapy for patients with sickle cell disease. Sickle cell disease and beta thalassemia represent a multi-billion dollar commercial opportunity. Today, there are approximately 32,000 patients in the U.S. and Europe who would likely be eligible for gene editing therapy based on the severity of their disease and the current busulfan-based conditioning regimen. Vertex, CRISPR, and a number of other companies are actively pursuing gentler conditioning regimens. Such regimens would potentially expand the eligible patient population to approximately 170,000 total patients in the U.S. and Europe. The commercial opportunity in sickle cell disease and beta thalassemia fits well within Vertex's strategic focus on specialty markets. Patients are primarily cared for by hematologists, and the treatment will be focused at transplant centers in the U.S. and Europe, which can be covered by a specialist infrastructure. By taking the leadership role on CTX001, we will be able to leverage our proven expertise in product launches, reimbursement, and access to bring the curative potential of this treatment to more patients more quickly around the world. Given we believe that regulatory submissions could happen in the next 18 to 24 months, Our pre-commercial work is underway. CTX001 is breaking new ground in many respects, and I'm very much looking forward to providing more details on this exciting work on future calls. And now I'll hand it over to Charlie.