Vertex Pharmaceuticals Incorporated

Good day and welcome to the Vertex Pharmaceuticals third 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, ma'am.

Good evening, all. My name is Susie Lisa, and as the Senior Vice President of Investor Relations, it is my pleasure to welcome you to our third 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 subjects 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'll now turn the call over to Reshma.

Thanks, Susie. Good evening, all, and thank you for joining us on the call today. We've delivered another strong quarter and continue to drive execution across the company. By reaching more CF patients, third quarter global product revenue grew 6% versus the prior year period, and we are raising full year 2023 CF product revenue guidance to approximately $9.85 billion. We are delivering on our marketed medicines in CF while simultaneously preparing for commercial excellence in multiple areas ahead of our potential near-term launches. including Exacell in both severe sickle cell disease and transfusion-dependent beta thalassemia, VX548 for acute pain and longer-term in peripheral neuropathic pain, and Arvanzacaftor triple combination therapy for cystic fibrosis. Most notably, we are tracking towards an exocel PDUFA date for sickle cell disease on December 8th of this year and for TDT on March 30th of next year, with global regulatory reviews also underway in Europe and the UK. Phase three pivotal trial readouts in early 2024 from both our Vanzecafter triple in CF and our VX548 program in acute pain. A phase two trial readout by year end 2023 from our VX548 trial in diabetic peripheral neuropathy and completion of enrollment in the phase two portion of the VX147 phase two three program in AMKD later this year. With that overview, let me now turn to a pipeline update, starting with cystic fibrosis. For our next-in-class Vanzecafter triple combination therapy, we remain on track to complete all three Phase III studies, Skyline 102 and 103, in patients ages 12 years and above, and the Ridgeline study in patients ages 6 to 11 by the end of 2023, and share results from these three pivotal studies in early 2024. We have high expectations that the vanzecaftor-triple combination can deliver greater improvements in CFTR function than Trikafta based upon the totality of evidence generated to date, including in vitro from our HBE assays and in Phase II studies. The vanzecaftor-triple holds the potential for enhanced clinical benefit versus Trikafta for patients and the convenience of once-daily dosing. It also carries a substantially lower royalty burden. In addition, we continue to make progress with another important program in our CF portfolio, VX522, our CFTR mRNA therapy in development with our partners at Moderna for the more than 5,000 CF patients who cannot benefit from CFTR modulators. We continue to expect to complete the single ascending dose portion and initiate the multiple ascending dose portion of this study by the end of the year. Turning now to Exacell, our CRISPR-Cas9-based gene editing program for sickle cell disease and transfusion-dependent beta thalassemia. This program holds the potential to be a one-time functional cure for these debilitating and life-shortening diseases. Exacell represents an enormous advancement for the estimated 32,000 people living with severe sickle cell disease and transfusion-dependent beta thalassemia across the US and Europe. It is a large commercial opportunity. On the regulatory front in the U.S., we were very pleased to have had the chance to discuss the XSL filing with members of the FDA Advisory Committee last week and to hear the very compelling stories from patients. The meeting represented a significant milestone for Vertex. and the first potential CRISPR-Cas9-based therapeutic. We look forward to our upcoming PDUFA dates and to the potential of bringing this precise, durable gene editing therapy to patients. Internationally, in both the UK and the EU, we are also well into the regulatory review process and expect regulatory decisions in these jurisdictions in the coming months. In addition, we recently submitted a marketing authorization application for Exocel to the Saudi Food and Drug Authority, or SFDA. I am pleased to share that Exocel is the first medicine ever to receive breakthrough designation by the SFDA, reflecting both the high unmet need and the high enthusiasm for Exocel in the Kingdom of Saudi Arabia. We look forward to updating you in the coming months. Moving on to the pain program, NVX-548, our novel, highly selective NAV1.8 inhibitor that holds the promise for effective pain relief without the side effects or addictive properties of opioids, and therefore represents a significant commercial opportunity in both acute and neuropathic pain. The pace of the phase three program in acute pain has been rapid, which we see as an indication of the high unmet need and strong patient and physician interest in an efficacious non-opioid acute pain therapy. We have completed the randomized control trial in abdominoplasty, the RCT and bunionectomy, and a single arm safety and efficacy study remain on track to complete by the end of this year. As previously discussed, we will unblind, analyze, and share results on all three studies at the same time, and we expect to do so in early 2024. This comprehensive phase three program has been designed to support a broad, moderate to severe acute pain label and to enable prescribing and usage across multiple care settings. We're also studying VX548 in peripheral neuropathic pain, or PNP, yet another area of high unmet need. Recall, we previously demonstrated positive proof of concept with the predecessor molecule VX150 in neuropathic pain. In diabetic peripheral neuropathy, or DPN, I am pleased to share that we have completed our Phase 2 12-week dose-ranging proof-of-concept study. We anticipate sharing the results from this Phase 2 trial by the end of this year. As we await the DPN results, we are excited to initiate a second phase two peripheral neuropathic pain study of VX548 by the end of the year in lumbosacral radiculopathy or LSR. It's a type of neuropathic pain caused by the impairment of nerve roots in the area of the lumbar spine. Given the limited therapeutic options, the significant opportunity to serve a large number of patients, and the promise that the NAV1.8 mechanism holds, we are excited to pursue the potential of VX548 in each of these neuropathic pain types. Next, on to type 1 diabetes, where we are evaluating stem cell-derived, fully differentiated, insulin-producing islet cells for people with type 1 diabetes. Our goal is to develop a potential, one-time, functional cure for the millions of people living with type 1 diabetes, including the more than 2.5 million patients in North America and Europe alone. The VX880 or naked cell program, where we have already established proof of concept, is foundational to the type 1 diabetes program as a whole. Here, patients take standard immunosuppressants to protect the islet cells from the immune system. At EASD last month, we presented positive, updated clinical data from all patients in Parts A and B of the VX880 study. With regard to study status, Part C of the study, which administers the full target dose with concurrent dosing, is now fully enrolled. Our second program, VX264, or the Cells Plus Device program, encapsulates these same cells in a proprietary immunoprotective device, and hence, there is no requirement for immunosuppressants. We have begun enrollment and dosing in Part A of the VX264 study. And finally, our third program, still in the research stage, is our hypoimmune cells, in which we edit the same fully differentiated cells so as to obviate the need for immunosuppressants. Transitioning now to enaxiplin or VX147, the first potential medicine to target the underlying cause of APOL1-mediated kidney disease, or AMKD. The Anaxipline Pivotal Program for Patients with AMKD is a single, adaptive, Phase 2-3 study with a pathway to accelerated approval in the U.S. The Phase 2b dose-ranging portion of the study continues to enroll and dose patients, and we expect a complete enrollment by the end of this year. We now expect to select a dose and move to Phase 3 of the study in Q1 of 2024. Now turning to Alpha-1 antitrypsin deficiency, or AATD. We have discontinued development of VX864 due to non-serious rash events in some patients in the Phase II program. Our next generation molecules, VX634 and VX668, both have greater potency and better drug-like properties and are both in Phase I clinical trials. These trials continue to enroll and dose healthy volunteers. We look forward to sharing more on AATD, including next steps as we learn more in the coming months.