Vertex Pharmaceuticals Incorporated

Good day and welcome to the Vertex Pharmaceuticals second quarter 2024 earnings 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 Susie Lisa, and as the Senior Vice President of Investor Relations, it is my pleasure to welcome you to our second quarter 2024 Financial Results Conference Call. On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Burr, Texas 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 be making 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 medicines for cystic fibrosis, sickle cell disease, and beta thalassemia, our pipeline, including the potential near-term launches of the vanzecaptor triple in CF and suzetrogene in moderate to severe acute pain, 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 the select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. 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've continued our momentum from Q1 with another quarter of excellent performance across the board, including outstanding commercial execution in both CF and the early launch of Kastchevy, our preparedness for the potential near-term launches of the Vanzecafter triple in CF and Sysetra gene in acute pain, as well as the rapid advancement of our broad and deep pipeline. In CF, we continue to reach more patients, delivering $2.65 billion in revenue in Q2, and based on this result and our outlook, we are increasing our full-year product revenue guidance to $10.65 to $10.85 billion, which at the midpoint represents 9% growth versus 2023. In sickle cell disease and beta thalassemia, we are pleased with the reception from patients, physicians, and payers as we continue the ongoing launch of Casgevi to bring this potentially transformative medicine to patients across multiple regions. And we are very excited about the multiple near-term opportunities to reach more patients and deliver additional revenue growth from our programs that have completed pivotal development, including the completion and acceptance of two significant regulatory submissions. The Vanzacaftor triple in patients with cystic fibrosis, six years and older, which has been given priority review designation, and VX548 or sucetragine in moderate to severe acute pain, which has also been granted priority review by the FDA. Lastly, on the mid- and late-stage pipeline, I am very pleased with our continued, rapid progress. I'll call out three specific programs. First, the SucetraGene LSR Phase II study has significantly accelerated, and we now expect Phase II results by the end of this year. Second, in the VX880 Phase 1-2 trial in type 1 diabetes, we have completed enrollment and dosing in the original 17-patient study, and we have secured regulatory endorsement to expand the study to 37 patients in total as we advance towards pivotal development. And third, in the povitacicept program, having completed successful end of phase 2 regulatory meetings, we will initiate the phase 3 pivotal trial in IgA nephropathy later this month. With those highlights, let me now turn to an R&D review, limiting my comments this quarter to the programs with the most significant recent updates, cystic fibrosis, pain, type 1 diabetes, and IgA nephropathy. Starting with CF, we are very pleased with the Phase III results from the Vanzecafter Triple program we announced in early February, as we continue to drive towards our ultimate goal of bringing all eligible patients to carrier levels, indeed to normal levels of CFTR function, as measured by sweat chloride. The Vanzacafta triple demonstrated an even greater reduction in sweat chloride than Trikafta, a very high bar to have crested, and thus sets the stage for the potential to have a new standard in the treatment of CF. The Vanzacafta triple also offers the convenience of once-daily dosing and a substantially lower royalty burden. With regard to the VANZA global regulatory submissions, in addition to the U.S. acceptance, our filings have also been validated by the EMA in the EU and the MHRA in the UK. With regard to VX522, our CFTR mRNA therapy in development with our partners at Moderna, it has completed the single ascending dose portion of the Phase 1-2 study and continues in the multiple ascending dose portion. As a reminder, VX522 seeks to provide treatment for the more than 5,000 people with CF who do not make any CFTR protein and therefore cannot benefit from CFTR modulators. Based on the pace of enrollment and study dynamics, our current expectation is to complete the study and share both efficacy and safety results from the study in the first half of 2025. Moving now to the pain program and our portfolio of novel, highly selective NAV1.8 and NAV1.7 pain signal inhibitors. In acute pain, a few points to highlight. First, we are very pleased that the Sysetrogene submission has been accepted and granted priority review by the FDA with a PDUFA target action date of January 30, 2025. Second, our next-in-class NAV1.8 pain signal inhibitor, VX993, is in the clinic in a Phase 1 trial with the IV formulation and is currently enrolling and dosing healthy volunteers. Third, VX993 will soon enter a Phase 2 study with the oral formulation in acute pain following bunionectomy surgery. This study is on track to begin later this quarter. And lastly, we continue to make strong progress preclinically with our NAV1.7 pain signal inhibitor program that may be used alone or in combination with NAV1.8 inhibitors. Just as in acute pain, we have multiple programs moving rapidly through development in peripheral neuropathic pain, or PNP, starting with painful lumbosacral radiculopathy, or LSR, a condition that impacts more than 4 million Americans. There is a high unmet need in LSR. In the US, there are no medicines approved specifically for the treatment of pain from LSR. As mentioned in my opening remarks, the pace of enrollment in this study has been rapid and significantly exceeded our projections. Study enrollment is now complete and we anticipate sharing Phase 2 LSR results by the end of this year. Also in peripheral neuropathic pain, we are excited to begin the phase three pivotal program for sucetragine in painful diabetic peripheral neuropathy or DPN later this quarter. The DPN pivotal program consists of two identical randomized control trials of approximately 1,100 patients each with sucetragine at a dose of 70 milligrams once daily and evaluating the change from baseline to week 12 in NPRS pain scores relative to placebo. The RCTs also include an active comparator arm of pregabalin. A key secondary endpoint is change from baseline at week 12 in NPRS score for sucetragine versus pregabalin assessed for non-inferiority. And if we meet non-inferiority, then we will test for superiority versus pregabalin. Lastly in PNP, I am pleased to share that we will soon initiate a Phase II study with the oral formulation of VX993 in diabetic peripheral neuropathy. Designed similarly to the SucetraGene Phase II DPN study, this trial is also on track to begin this quarter. Turning now to type 1 diabetes, VX880s are stem cell-derived, fully differentiated islet cell therapy for people with T1D and impaired hypoglycemic awareness who experience severe hypoglycemic events despite optimal medical care. At the ADA meeting in June, an oral presentation from the ongoing Phase 1-2 study included updated data with more patients and longer duration of follow-up and continued to demonstrate the potential of VX880 as a functional cure for patients with T1D. The data reflected 12 patients from Parts B and C of the study who received a full dose of VX880 as a single infusion and had at least three months of follow-up. The results are remarkable. Specifically, all patients demonstrated islet cell engraftment and glucose-responsive insulin production by day 90. All 12 patients achieved hemoglobin A1c levels less than 7% and all 12 patients also had a time in range for glucose levels of 70% or greater. 11 of the 12 patients greatly reduced or completely eliminated exogenous insulin use. And the three patients with 12 months of follow-up and therefore evaluable for the primary endpoint, each met the primary endpoint of elimination of severe hypoglycemic events with a hemoglobin A1c level below 7, as well as the secondary endpoint of insulin independence. With these results, we are planning forward towards the next phase of development for VX880. To that end, we are very pleased to have secured regulatory approval to expand the original 17-patient study, which is fully enrolled and dosed, to include an additional 20 participants. We look forward to continuing the work with regulators to finalize the requirements for pivotal development and updating you on those discussions. Beyond VX-880, our Cells Plus Device, or VX-264 program, encapsulates the same VX-880 cells in a proprietary device designed to eliminate the need for immunosuppressants. VX-264 is in a Phase I-II multi-part global study. We have completed Part A of the study at an initial dose with a stagger between patients. We are currently enrolling and dosing patients in Part B, which is at the full target dose, also with a stagger between patients. As a reminder, Part C of the trial is at the full target dose with no stagger between patients. The last major R&D update pertains to povitacicept, the lead asset from our recently closed acquisition of Alpine Immune Sciences, where our enthusiasm for both the acquisition and POVI remains high. As a reminder, POVI holds the promise of being a pipeline and a product, and has best-in-class potential for the lead indication in IgA nephropathy, given its mechanism of action with dual inhibition of both APRIL and BAF, its preclinical profile, and the clinical data through Phase II in pertinuria, hematuria, and GFR. These attributes, plus POVI's once-monthly dose frequency and small-volume subcutaneous route of administration, give us high confidence in its potential to be a transformative medicine for patients with IGAN. I am pleased to share that we are on track to initiate the global Phase III Rainier study of povitacicept in patients with IgA nephropathy this month. To recap, we had successful end-of-Phase II meetings with the FDA and global regulatory authorities and were very pleased to have reached agreement on the following important elements. The Pivotal Program is designed as a single, global, randomized, double-blind, placebo-controlled trial of approximately 480 patients with biopsy-proven IGAN and proteinuria. Patients will be randomized to receive either POVI or placebo on top of standard of care. In the U.S., the Phase III design affords us the opportunity to submit for an accelerated approval. A preplanned interim analysis will take place when a certain number of patients reaches 36 weeks of treatment to evaluate the change in pertinuria from baseline to week 36. For full approval, the study will continue through week 104 and an assessment of GFR. Beyond the Phase III study in IgA nephropathy, POVI is also being evaluated in two Phase II basket trials, one in renal diseases, termed RUBI3, and a second in B-cell-mediated cytopenias, termed RUBI4. We look forward to readouts from some cohorts in these studies later this year and into next. To close the pipeline review, a brief update on VX634 and VX668 in alpha-1 antitrypsin deficiency or AATD. Safety was demonstrated in the Phase 1 studies of both VX634 and VX668. However, based on the Phase I biomarker analyses, we have determined that neither VX634 nor VX668 would deliver transformative efficacy for people with AATD, and therefore we have decided to discontinue development of both molecules. With these learnings, our research efforts in AATD will continue. I'll now turn it over to Stuart for a commercial update.