Vertex Pharmaceuticals Incorporated

Good day and welcome to the Vertex Pharmaceuticals first quarter 2023 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ms. Susie Lisa. Please go ahead.

Good evening, all. My name is Suzy Lisa, and as the Senior Vice President of Investor Relations, it is my pleasure to welcome you to our first quarter 2023 financial results conference call. On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's CEO and President, Stuart Arbuckle, Chief Operating Officer, and Charlie Wagner, Chief Financial Officer. We recommend that you access the webcast slides as you listen to this call. The 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 cystic fibrosis medicines, our pipeline, 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 select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. In addition, the impact of foreign exchange is presented inclusive of our foreign exchange risk management program. I will now turn the call over to Reshma.

Thanks, Susie. Good evening, all, and thank you for joining us on the call today. We're pleased to have opened with a strong start to 2023. as first quarter global CF product revenues grew 13% versus the first quarter of 2022. In addition, we completed the Exacell U.S. Rolling BLA submissions for sickle cell disease and beta thalassemia and secured U.S. approval for Trikafta in patients 2 to 5 years of age. Now is an especially exciting time at Vertex because within our 5 launches in 5 years, or 5 in 5 goal, we see multiple programs with near-term launch potential, including Exacell in sickle cell disease and transfusion-dependent beta-falcemia, the Vanzecafta Triple in CF, and VX548 for acute pain. In total, we now have programs in eight disease areas in mid- and late-stage development, six of which are past the proof-of-concept stage, as depicted on slide five. With this breadth of compelling opportunities, we're investing accordingly to drive continued pipeline success, clinical trial progress, and the build-out of commercialization capabilities. In addition, beyond the eight disease areas already in the clinic, the next wave of innovation is advancing through preclinical development, including programs in Duchenne's muscular dystrophy, myotonic dystrophy type 1, NAV 1.7 for pain, and gentler conditioning agents for use with Exacell. With a uniquely strong and durable CF franchise, multiple near-term commercial opportunities, a broad and rapidly advancing pipeline, a strong balance sheet, and an exceptionally talented and committed team, Vertex has never been as well positioned to deliver for patients and shareholders for years to come. With that overview, I'll turn to the details of recent R&D progress, starting with CF. Our next-in-class Vanzecafter triple combination has completed enrollment in its two Phase III clinical trials in patients ages 12 years and above, known as Skyline 102 and 103, and is progressing well. Enrollment in patients ages 6 to 11, known as the Ridgeline study, is also advancing rapidly. We continue to anticipate the completion of the Skyline studies by the end of this year, And I'm pleased to share we now project the completion of the Ridgeline study at approximately the same time as the Skyline studies. Recognizing the very high bar set by Trikafta, we have high expectations for the Vanzecafta triple program based on the totality of the evidence generated to date and as was recently reported in Lancet Respiratory Medicine. Preclinically, our HPE assays, which have consistently proven to have robust translation from the bench into the clinic, showed greater restoration of chloride transport with the vanzecafta triple than with Trikafta. In the Phase II clinical program, the vanzecafta triple drove greater CFTR function and correspondingly lower levels of sweat chloride than has been seen with Trikafta. As such, we believe the vanzecafta triple has the potential for enhanced clinical benefit along with the convenience of once-daily dosing. In addition, we expect the vanzecafta triple to carry a substantially lower royalty burden. Another important study in our CF portfolio pertains to VX522, our CFTR mRNA therapy that we're developing in partnership with Moderna for the more than 5,000 CF patients who cannot benefit from CFTR modulators. We have initiated the single ascending dose or SAD study of VX522 and are actively enrolling and dosing CF patients. We anticipate completing the SAD portion of the study and initiating the multiple ascending dose portion of the study this year. Turning now to Exacell, our gene editing program for severe sickle cell disease and transfusion-dependent beta thalassemia. Exacell holds the potential to be the first CRISPR-based gene editing treatment to be approved, as well as the promise to be a one-time functional cure for these diseases. This is our most advanced program outside of CF, and we expect Exacell to be our next commercial launch. Per our prior guidance, we completed our BLA submissions for both sickle cell disease and TDT in the U.S. at the end of last quarter. We now await acceptance of our filings and assignment of the PDUFA date. Our filings include requests for priority review, which, if granted, would result in an eight-month review by FDA from the time of submission. Internationally, as previously announced, both the EMA and MHRA have validated our XSL MAA submissions, and those filings are under review. We see a significant opportunity for XSL. Stuart will comment further on the market opportunity and our launch preparations in just a few minutes. Turning next to our pain program and VX548, our novel, highly selective NAV1.8 inhibitor that holds the promise of effective pain relief without the side effects or addictive properties of opioids. We have confidence in the outlook for this program given, one, NAV1.8 is a genetically and pharmacologically validated target. Two, we have multiple positive proof-of-concept results with our predecessor NAV1.8 inhibitor, VX150, across acute, neuropathic, and musculoskeletal pain, and with VX548 itself in acute pain. And three, our Phase III program with VX548 in acute pain is substantially similar to the positive phase two trials we have already concluded. VX548 has been granted fast track and breakthrough therapy designations for acute pain in the US. We initiated pivotal development last year and enrollment and dosing across the three Phase III studies continue to progress nicely. These studies have been designed to support our goal of a broad, moderate to severe acute pain label that would enable prescribing and usage across multiple care settings, including at the site of care, post-discharge, and in the home. We continue to anticipate completing the acute pain phase three pivotal program toward the end of this year or beginning of next, creating another potentially significant and near-term commercial opportunity. In addition, we continue to enroll in dose patients in a 12-week phase two dose ranging proof of concept study of VX548 in diabetic peripheral neuropathy, a form of peripheral neuropathic pain. I'm pleased to share, we also anticipate completing this phase two study towards the end of this year or beginning of next. Transitioning now to enaxiplin or VX147, the first potential medicine to target the underlying cause of APOL1 mediated kidney disease or AMKD. In March, we were very pleased with the publication of the phase two results for enaxiplin in the New England Journal of Medicine. Importantly, the paper was accompanied by an editorial and a feature on the science behind the study. We see this coverage in the New England Journal of Medicine as underscoring the importance of the enaxiplin data and the medicine's potential. The Phase IIb dose-ranging portion of the global Phase II-III pivotal study remains on track to complete this year. Recall, this study has a pre-planned interim analysis at 48 weeks of treatment, which, if positive, could serve as the basis to seek accelerated approval in the U.S. With Anaxipline, we see the potential to bring a first-in-class treatment to the approximately 100,000 patients with AMKD in the U.S. and Europe and unlock a multibillion-dollar market opportunity. Moving now to type 1 diabetes. There are more than 2.5 million people with type 1 diabetes in North America and Europe alone, and we are committed to delivering a transformative, if not curative, medicine for this disease. We have three programs in our type 1 diabetes portfolio, all of which use the same fully differentiated insulin-producing islet cells, which have already demonstrated proof of concept. Our first program, or VX880, the naked cell program, uses standard immunosuppressives to protect the ILIP cells from the immune system. I am pleased to share that both Part A and Part B of the study are now fully enrolled and dosed. In both portions of the study, dosing of patients was staggered, with Part A patients receiving half dose and Part B patients receiving the full target dose. The next step in the program is Part C, in which patients will be treated concurrently with the full target dose. This should facilitate faster timelines. We look forward to sharing VX-880 data from more patients and with longer duration of follow-up at medical congresses this year, including the ADA scientific sessions in June. Our second program, VX-264, or the Cells Plus Device Program, encapsulates these same cells in a proprietary device that is designed to shield the cells from the body's immune system. And hence, there is no requirement for immunosuppressants. Both the IND in the U.S. and the CTA in Canada have cleared. Site activation and study initiation activities are underway in both the U.S. and Canada. And we look forward to enrolling and dosing patients in this Phase I-II study in the near term. Third, our hypoimmune program in which we edit the same cells to cloak them from the immune system. This would represent another path to obviating the need for immunosuppressives. In March, we expanded our collaboration with CRISPR therapeutics into type 1 diabetes, and this new licensing agreement will enable us to use CRISPR-Cas9 to edit the cells. This research stage program continues to make progress. Lastly, also in the T1D portfolio, the Viacyte VCTX211 hypoimmune program using a Viacyte cell line remains on track. This program has finished enrollment and dosing in Group 1 of the Phase 1-2 study. Let me conclude with our Alpha-1 Antitrypsin Deficiency, or AATD program, which continues to enroll both the Phase II study for VX864 and the Phase I study for VX634. The Phase II program for VX864 is a 48-week study in patients with AATD that will assess both liver clearance of Z-polymer and serum functional AAT levels. This study is projected to complete enrollment later this year. The Phase 1 Healthy Volunteer Study of VX634, the next in-class molecule with multifold greater potency and better drug-like properties, is projected to complete this year. With that, I'll now turn over the call to Stuart.