Vertex Pharmaceuticals Incorporated

Good day and welcome to the Vertex Pharmaceuticals second quarter 2025 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. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Suzy Lisa. Please go ahead, ma'am.

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 second quarter 2025 Financial Results Conference Call. On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's CEO and President, Duncan McKechnie, Chief Commercial Officer, and Charlie Wagner, Chief Operating and 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 medicines for cystic fibrosis, sickle cell disease, beta thalassemia, and moderate to severe acute pain, 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. I will now turn the call over to Reshma.

Thanks, Susie. Good evening, all, and thank you for joining us on the call today. As anticipated, momentum accelerated, and we executed with very strong performance across the board, growing and diversifying revenue with multiple new product launches, driving advancement of programs in pivotal development, and progressing the earlier stage R&D pipeline. We continue to reach more patients with more products and delivered $2.96 billion in revenue in the second quarter, representing 12% growth versus Q2 2024. We remain sharply focused on commercialization across multiple disease areas and expansion of our patient reach. We are pleased with the first six months of launch performance, as well as physician and patient feedback on both Oliftrec in CF and Jernavix in acute pain, as well as the building global momentum for Caschevi, our gene-edited therapy for sickle cell disease and beta-thalassemia. In addition to this commercialization focus, research and clinical progress remain paramount, and to that end, we continue to rapidly advance the four programs in pivotal development and are working with urgency to begin our fifth in primary membranous nephropathy. Before I cover R&D highlights for the quarter, I would like to acknowledge our CSO, David Altshuler's retirement a year from now, and the planned CSO transition to Mark Bunnage, our current SVP and Global Head of Research. David will be retiring from Vertex effective August 1st, 2026. After an incredible 13-year career with the company, David initially joined Vertex as a member of the board of directors in 2012 and became chief scientific officer in 2015. During David's tenure, multiple CF medicines have advanced from research through commercialization, including Orkambi, Symdeko, Trikafta, and Oliftrek. Our disease sandbox has broadened, and we successfully advanced the scientific breakthroughs that became Caschevy and Jernavix. In an industry with notoriously low R&D success rates, David's teams delivered remarkable achievements year after year. David is a world-renowned physician scientist who's known for his creative and critical thinking, penchant for debate, and commitment to building teams. On a more personal level, I know him as a deeply passionate Vertexian, dedicated physician, and valued member of the executive team. As mentioned in our earnings release, as part of this planned transition, I am delighted to announce that Mark Bunage will assume the role of EVP and Chief Scientific Officer, effective February 1, 2026, after which David will work with Mark to ensure a smooth transition. Mark joined Vertex and has worked alongside David since 2016. Since that time, Mark has held increasing senior leadership roles across research, starting as SVP site head Boston Research and most recently as SVP head of Global Research, overseeing all five of Vertex's research sites. Under Mark's leadership, we advanced many molecules to the clinic, including caschevian jernavix, enaxiplin for AMKD, VX828 for CF, VX670 for DM1, and VX407 for autosomal dominant polycystic kidney disease. Mark was also intimately involved in the diligence that led to the Alpine acquisition, which brought povitacicept to Vertex. I look forward to celebrating David's retirement and welcoming Mark as CSO when the time gets closer. Returning then to R&D highlights, I'll limit my comments to the pipeline programs with the most significant new information to share, specifically CF, pain, type 1 diabetes, and the renal programs. Starting with CF. As of July, we've gained approval for a lift-track in the US, UK, EU and Canada. We've also secured reimbursement for a lift-track in England and will add Ireland shortly. Patients in Germany and Denmark already have reimbursed access due to existing agreements and provisions. And across other EU member nations in Canada, we're working with reimbursement bodies to secure access for eligible patients as quickly as possible. As we continue to expand our existing CFTR modulator portfolio to younger age groups, we also continue to develop new CFTR regimens with the aim of reaching our long-standing objective of bringing most, if not all, people with CF to normal levels of CFTR function. Our Next Gen 3.0 or NG 3.0 regimen is next on deck. The backbone of the NG3.0 combination is VX828, the most efficacious CFTR corrector that we have ever studied in vitro and brought to the clinic. We are nearing completion of the Healthy Volunteer Study and we remain on track to initiate a cohort of people with CF with the VX828 regimen before the end of this year. Finally in CF, on VX522, I am pleased to note that the Data Safety Monitoring Committee has completed its review and is endorsed restarting the trial. We're now in the process of working to resume dosing in the MAD portion of the Phase 1-2 for the 5,000 or so patients who cannot benefit from our CFTR modulators. and expect to do so in the near term. Now shifting to pain. First in peripheral neuropathic pain or PNP. We had a productive end of phase two meeting with the FDA on our PNP program. While a broad PNP label remains our goal, at this time the FDA does not see a path to a broad indication. As such, we will not be initiating an LSR trial at present. Instead, in light of the discussions and clear agreement with the FDA regarding approval requirements for diabetic peripheral neuropathy, or DPN, we will begin a second DPN Phase III study shortly in order to secure DPN as our first PNP indication for sucetragine. Recall we have breakthrough therapy designation for the DPN indication. Also note that our first Phase III study of sucetragine in DPN is already well underway, and with the near-term initiation of the second DPN study, our goal is to complete enrollment of both of these trials by the end of 2026. We look forward to working with the agency to secure DPN as our first PNP indication, to expand the indication over time, and to continue to discuss a potential pathway to a broad PNP label. Turning now to Acupane and VX993, another NAV1.8 inhibitor. This afternoon, we shared top-line results from the Phase 2 trial of this molecule in the post-bunionectomy setting. To recap, as part of our serial innovation strategy, we developed VX993 with three main goals. First, to have an IV option. Second, to provide additional NAV1.8 inhibitor candidates for potential use as co-formulation with future NAV1.7 inhibitors. And third, to further refine dose-response relationships, including whether higher clinical exposure might result in greater clinical efficacy. Focusing on this last point of efficacy, based on the predicted clinical potency and exposure of 993, we powered the Phase II trial with the goal of detecting a treatment effect higher than previously achieved. This Phase II trial included a placebo group, three VX993 dosage arms, and a hydrocodone reference arm. The primary endpoint was SPID48 compared to placebo. The results showed that VX993 was safe and well-tolerated with no related SAEs and an overall profile consistent with the placebo arm. The placebo effect was well controlled, and desired 993 exposures were achieved, with adequate separation between doses. On efficacy, VX993 did not meet the primary endpoint and did not show statistical significance at the 0.05 level. The SPID48 treatment effect was similar at both the mid and high doses, and both were numerically better versus placebo. The outcome of the study combined with the totality of evidence from our preclinical models and previous NAV1.8 inhibitor clinical studies in acute pain suggest we are at the high end of the NAV1.8 dose response curve for acute pain in the post-bunionectomy setting. As such, we do not plan to advance VX993 as monotherapy in acute pain because we do not expect that it will be superior to our NAV1.8 inhibitors. We do plan to complete the ongoing VX993 study of DPN to further define the exposure response, relationship, and maximal efficacy of NAV1.8 inhibitors in this chronic pain indication. To close out on pain, a quick word on our NAV1.7 inhibitor program. We're very encouraged by our strong preclinical progress in this program and look forward to advancing candidates for use alone or in combination with NAV1.8 inhibitors. Transitioning now to type 1 diabetes. Zamylocell will soon complete enrollment and dosing of its pivotal study, positioning us for global regulatory submissions in 2026, if the data are supportive. Recall we expect about 60,000 severe type 1 diabetic patients may potentially benefit from this first Zamylocell submission. In June, at the ADA meeting and concurrently in the New England Journal of Medicine, Positive data for Zamylocell and type 1 diabetes were presented that continue to demonstrate this cell therapy's transformative potential. All 12 patients with at least one year of follow-up who received a full dose of Zamylocell as a single infusion achieved ADA-recommended target hemoglobin A1c levels less than 7%. freedom from severe hypoglycemic events during the evaluation period, and greater than 70% time in range. Remarkably, 10 of the 12 patients at 12 months were insulin-free, a testament to the potential transformative benefit and durability of this therapy. We also continue to make preclinical progress on our approaches to cloak the same VX880 cells from the immune system, including improved immunosuppressive regimens, gene editing to produce hypoimmune islet cells, and novel immunoprotection to encapsulate these cells. We look forward to updating you as these programs advance. Finally, a few updates on our kidney portfolio, which now has clinical stage programs in four diseases, IgA nephropathy, AMKD, membranous nephropathy, and ADPKD, or autosomal dominant kidney disease. Starting with povitacicept, a number of autoimmune diseases are driven by uncontrolled B cells. By controlling B cells, POVI is designed to restore immune balance for patients and holds the potential to have transformative benefit across multiple disease states. POVI was specifically engineered for better tissue penetration and to deliver optimized, targeted, dual inhibition of the BAF and APRIL cytokines, which both play a key role in the pathogenesis of B-cell-mediated autoimmune diseases. First up for POVI is IGAN. We disclosed previously that we completed enrollment of the interim analysis cohort in the Rainier Phase III trial. Today, we are pleased to share that we are on track to complete enrollment of the full Rainier study by the end of this year. With regard to the interim analysis cohort, once this group completes 36 weeks of treatment, we will conduct the interim analysis and, if positive, will file for potential accelerated approval in the U.S. in the first half of 2026. To close out on IGAN, studies to support the launch of POVI for at-home self-administration with a subcutaneous autoinjector are also well underway. Next, and consistent with its pipeline and product potential, the second disease state where we believe POVI can provide B-cell control is primary membranous nephropathy. Based on strong emerging data from the Ruby 3 study, we completed our end-of-Phase 2 meeting with the FDA and reached agreement on a Phase 2-3 adaptive study for traditional approval of POVI versus standard of care. with the primary endpoint of complete remission at 72 weeks. This Phase 2-3 study will begin later this year. And third, we have prioritized additional diseases in which we believe POVI also holds best-in-class promise. Based on emerging data, potential patient impact, the treatment landscape, and commercial opportunity, the next two autoimmune diseases in focus for us are generalized myasthenia gravis and warm autoimmune hemolytic anemia, or WAHA. So, to summarize, our current priority disease areas are IGAN, membranous nephropathy, generalized myasthenia gravis, and WAHA, and we are deprioritizing other indications at this time. Next, on enaxiplin for APOL1-mediated kidney disease, we remain on track to complete enrollment in the interim analysis cohort of the amplitude pivotal trial in primary AMKD this year. Of note, while we are able to enroll more adolescent patients, we've hit an important milestone in this study, where the target number of 10 to 17-year-old AMKD patients has now been achieved. After completing enrollment in the IA cohort, these patients will be followed for 48 weeks of treatment, at which point we will conduct the interim analysis and, if positive, will be poised to file for potential accelerated approval in the U.S. The amplified study, a Phase II proof-of-concept study in patients with AMKD and comorbidities, including type 2 diabetes, is also underway, and this trial is on track to complete enrollment by the end of 2025. To close on our kidney pipeline is VX407 for ADPKD, a first-in-class small molecule protein folding corrector that is designed to treat the underlying cause of ADPKD by restoring PC1 protein function, thereby reducing total kidney volume and preventing progression to kidney failure. As a reminder, there are approximately 300,000 patients with ADPKD, and there are no approved therapies that treat the underlying cause of this disease. We believe about 10% of patients with ADPKD may be eligible for treatment with VX407. This quarter, we'll begin the VX407 proof-of-concept trial, which is a 52-week, single-arm study in 24 patients that will evaluate the efficacy of VX407 as measured by height-adjusted total kidney volume. In closing, Vertex has multiple Phase III programs well underway that are poised for accelerated or traditional approval. These trials have either already completed enrollment or are on track to do so in 2025. They each serve a disease with high unmet need, and they've secured multiple regulatory designations including Fast Track, Breakthrough, Regenerative Medicine or RMAT, Prime, amongst others, all of which positions us for multiple regulatory submissions in 2026 and early 2027 with potential approvals and launches to follow. Accordingly, as we drive to achieve our R&D milestones, we're executing on the concurrent work of preparing for commercialization of these potential launches. With that, I'll now turn over the call to Duncan for a commercial update.