The operator welcomes listeners to the Vertex Pharmaceuticals Third Quarter 2023 Conference Call. Susie Lisa, Senior Vice President of Investor Relations, introduces the speakers and mentions that the call is being recorded. She also reminds listeners to access the webcast slides and mentions that the call will include forward-looking statements and non-GAAP financial results. CEO and President Dr. Reshma Kewalramani then begins with an overview of the company's performance and execution.

In the third quarter, global product revenue for cystic fibrosis (CF) grew 6% and the company has raised its full year 2023 CF product revenue guidance. They are also preparing for potential launches of multiple products, including exa-cel for severe sickle cell disease and transfusion dependent beta thalassemia, VX-548 for acute and peripheral neuropathic pain, and vanzacaftor triple combination therapy for CF. The company is on track to complete all three Phase 3 studies for the vanzacaftor triple combination by the end of 2023 and share results in early 2024. They have high expectations for this therapy to deliver greater improvement in CFTR function and offer convenience with once daily dosing.

Vertex is making progress with their CFTR mRNA therapy, VX-522, for CF patients who cannot benefit from CFTR modulators. They expect to complete a study for this therapy by the end of the year. They are also working on exa-cel, a CRISPR/Cas9 based gene editing program for sickle cell disease and beta thalassemia, which has the potential to be a one-time functional cure for these diseases. They recently had a meeting with the FDA advisory committee and are awaiting regulatory decisions in the US, UK, and EU. They also submitted a marketing authorization application for exa-cel to the Saudi Food and Drug Authority and received breakthrough designation for it. They will provide updates in the coming months.

Vertex Pharmaceuticals is currently conducting a Phase 3 program for their novel pain drug, VX-548, which is a highly selective NaV1.8 inhibitor. They have completed a randomized control trial in abdominoplasty and have two more studies on track to be completed by the end of the year. Results from all three studies will be shared in early 2024. The company is also studying VX-548 in peripheral neuropathic pain, with positive proof-of-concept demonstrated in diabetic peripheral neuropathy. Results from a Phase 2 study in DPN are expected by the end of the year, and a second Phase 2 study in lumbosacral radiculopathy will be initiated by the end of the year as well. Vertex is excited to pursue the potential of VX-548 in these different types of neuropathic pain, given the high unmet need and potential to serve a large number of patients.

Vertex Pharmaceuticals is working on developing a potential cure for type 1 diabetes by using stem cell derived islet cells. They have presented positive updated clinical data and are currently enrolling patients in their VX-880 and VX-264 studies. They are also researching hypoimmune cells that could eliminate the need for immunosuppressants. In addition, they are working on a potential medicine, inaxaplin, to target the underlying cause of APOL1-mediated kidney disease. The Phase 2b portion of the study is ongoing and they expect to move to Phase 3 in Q1 of 2024. However, they have discontinued development of VX-864 for alpha-1 antitrypsin deficiency due to non-serious rash events in patients.

The company has two new molecules in Phase 1 clinical trials, and is focused on developing medicines for all people with CF. They have seen strong commercial results with CF product revenue growing 6% globally, and are working towards potential regulatory approvals for their next targeted launch, exa-cel. The company has identified approximately 32,000 eligible patients for exa-cel, with the majority being in the U.S. and Europe. They are also developing a program with Moderna for potential future growth.

The company is making progress in preparing for the launch of their new therapy, exa-cel, in the US and Europe. They have also submitted an application for a new technology add-on payment for Medicare patients and are working on gaining approval and reimbursement in the Kingdom of Saudi Arabia. The exa-cel patient journey involves three phases: pretreatment, cell collection and manufacturing, and treatment. The process can take several months and may differ for patients with sickle cell disease and thalassemia.

The treatment phase for exa-cel involves myeloablative conditioning, infusion of edited cells, and post-infusion care, with a one month hospital stay. This patient journey is consistent globally and 2024 is expected to be a foundational year for exa-cel. VX-548, a NaV1.8 inhibitor for pain, has a large market opportunity in the U.S. for acute and peripheral neuropathic pain, with potential for additional growth due to current treatment challenges. The innovative profile of VX-548 could provide a transformative option for millions of patients.

In the US, there are approximately 80 million patients who are prescribed medicine for moderate to severe acute pain every year. The majority of these patients receive treatment in hospitals or ambulatory surgery centers. There is a large opportunity for a specialty sales force to reach these patients, especially with the completion of the peripheral neuropathic pain study and the upcoming LSR study. PNP is a chronic condition that affects 10 million patients in the US, with limited treatment options. Specialists play a crucial role in treating PNP patients, making it an addressable market for a specialty sales force. Vertex is also making progress in treating CF and is preparing for multiple launches, including a potential functional cure for sickle cell disease and beta thalassemia. The company is also preparing to launch the vanzacaftor triple in CF and VX-548 in acute pain, both of which have the potential to greatly improve patients' lives and represent significant market opportunities. The financials will be reviewed by Charlie.

In the third quarter of 2023, Vertex saw a 6% increase in revenue, with strong growth in both the US and international markets. This was mainly driven by the recent FDA approval of TRIKAFTA in patients ages two to five and label extensions in younger age groups. Operating expenses also increased due to continued investment in research and pipeline development, including clinical studies for various treatments. Non-GAAP operating income for the quarter was $1.17 billion.

In the third quarter of 2023, the company's non-GAAP earnings per share increased by 2%, with $13.6 billion in cash and investments. They prioritize investing in innovation, with 10 completed transactions and $285 million spent on share repurchases. The company is increasing their 2023 revenue guidance to approximately $9.85 billion, with a projected headwind from changes in foreign currency. They are maintaining their expenses for R&D, acquired IPR&D, and SG&A, and lowering their projected non-GAAP effective tax rate due to an increase in their U.S. R&D tax credit estimate.

Vertex had a successful Q3 2023, with strong revenue growth, regulatory milestones, clinical trial progress, and investments. They anticipate further milestones in multiple disease areas. A question from Geoff Meacham about AATD was addressed, with Reshma Kewalramani stating that the issue with the VX-864 molecule is a non-serious rash, which is molecule-specific and not related to the mechanism of action. Stuart would comment on the plans for launching vanzacaftor globally.

In this paragraph, the speaker discusses the importance of the portfolio strategy and upcoming developments for Vertex Pharmaceuticals. They mention the next two molecules, VX-634 and VX-668, which are in Phase 1 development and will have results revealed in a 24-day event. The focus then shifts to Stuart Arbuckle, who talks about expectations for access and reimbursement outside of the US for the drug vanzacaftor, which is being compared to TRIKAFTA. He mentions that the company anticipated the success of vanzacaftor and has included it in some reimbursement agreements. The next question is about the timeline for transformative developments at Vertex, and the speaker clarifies that the company will have a specialty sales force for TNP.

The company plans to market VX-548, a drug for acute and neuropathic pain, by conducting three pivotal trials and aiming for a broad label. They will also be sharing results from a Phase 2 study before the end of the year. The drug will be compared to Lyrica and the company hopes to provide a better benefit-risk profile. They also plan to expand into the peripheral neuropathic pain area with another study. Stuart Arbuckle will comment on the commercialization approach for the neuropathic pain side.

The PNP (peripheral neuropathic pain) is a term used to describe various conditions that are caused by nerve impairment and result in pain. The ongoing DPN (diabetic peripheral neuropathy) study is comparing the efficacy and safety of gabapentinoids, the current standard of care, with VX-548, a potential new treatment. DPN accounts for 20% of PNP patients in the US, while LSR (lumbosacral radiculopathy) accounts for over 40%. There are no approved therapies for LSR, making it a significant opportunity for VX-548. The Phase 2 studies will compare VX-548 with Lyrica, not as a comparator but as a reference arm, with the goal of demonstrating a better benefit-risk profile. Safety and tolerability issues with Lyrica are a concern, and VX-548 aims to have a better profile in these areas.

The company has started a trial for a new drug, VX-264, with staggered dosing because it is a first-in-man program. They are also pursuing a broad label for their drug VX-548 in treating peripheral neuropathic pain, and have gained confirmation from regulatory discussions that LSR falls under this category. They chose to start with DPN because it has an established regulatory pathway and commercial marketplace, but have now turned their attention to LSR as they near completion of the VX-548 study.

The company has confirmed with regulators that their new drug is classified as a PNP type, leading to excitement about starting the Phase 2 study. In response to an editorial questioning the effectiveness of their pain treatment, the company plans to conduct a larger Phase 3 study to gather more data. The company is also optimistic about the potential of their drug vanza, which is expected to drive growth in the franchise due to its ability to target new patient populations.

Stuart Arbuckle discusses the potential for patients to switch to vanzacaftor from existing CFTR modulators, as well as the opportunity for growth in patients who have previously discontinued a CFTR modulator. He also mentions the prevalence of opioid use in the DPN setting and how vanzacaftor may potentially replace Lyrica or opioids in this setting.

The company is excited about the potential of their new drug, 548, to establish a new standard of care for patients with DPN. Currently, there is a lot of polypharmacy in DPN due to the variable efficacy and adverse events of existing therapies. The company has a portfolio approach to R&D and has several other NaV1.8 and NaV1.7 inhibitors in development, with some already in clinical trials and others in the research stage. They see potential for combining these inhibitors for use as a single agent or in combination.

The speaker responds to a question about the potential success of VX-548 in Phase 2 for diabetic neuropathy and discusses the company's plans for Phase 3 trials. They state that Vertex will conduct the development and commercialization of both acute and neuropathic pain treatments on their own. The speaker also mentions the potential benefits of rescue medication use in the placebo arms and plans for disclosing this information.

Stuart Arbuckle and Reshma Kewalramani discuss the potential for commercial success with a specialty sales force for the treatment of diabetic peripheral neuropathy (DPN) and lumbar spinal stenosis (LSR). They also mention the consideration of rescue medicines in the Phase 3 studies for acute pain and the design of the Phase 3 DPN program with the FDA.

The speaker discusses the recent UK NICE appraisal of TRIKAFTA, which determined that the drug was not cost-effective for the UK system. This was expected as part of the contract negotiated with the NHS in 2019. The company has submitted data to NICE, including clinical trial data, open label extension data, and real world data from the UK. The results in the real world have been better than expected, with reductions in exacerbations, increased life expectancy, and other positive outcomes. The speaker is disappointed with the draft guidance from NICE, but remains confident that the full value of the drug will be reflected after a second NICE committee meeting. The next questioner asks about pain.

The article asks about the underrepresentation of males and the capabilities being developed for commercialization of VX-548. Reshma Kewalramani explains that the high number of females in the trials is a positive and Stuart Arbuckle discusses the efforts to build capabilities and the potential for VX-548 to address the addiction potential of opioids.

The company is using its successful capabilities in reimbursement and policy support to enter the pain market. They are seeing positive changes in the market with a focus on non-opioid pain medicines. They are also bringing in new capabilities and experienced personnel to support their entry into the institutional setting. The company is leveraging their past successes while also incorporating new knowledge and skills. The next question from a different analyst is about the pain market and the company's other product, vanza.

The speaker is discussing the acute and chronic pain studies for VX-548 and the VANS trial. They confirm that the doses used in the Phase 2 trials for VX-548 will be the same in the Phase 3 trials, and the doses for the control drugs (Lyrica and Vicodin) will be the standard labeled doses. They also mention a completed QT study, but do not disclose any information. The speaker then moves on to discussing the VANS trial and mentions that the doses used in the Phase 2 diabetic peripheral neuropathy trial are different from those used in the acute pain trials. They confirm that the reference arm for the VANS trial will use standard dosing from the label.

The final key point to remember about vanzacaftor is that it is being studied head-to-head against Trikafta, with the primary endpoint being non-inferiority in terms of PPF-EV1. However, the secondary endpoint of sweat chloride, which is a direct measure of CFTR function and is used to diagnose the disease, is also being studied and has shown promising results in previous Phase 2 trials. Physicians are particularly interested in a treatment that can demonstrate improved CFTR function, and the fact that vanzacaftor is a once-daily regimen is also seen as a benefit for patients with compliance challenges.

The speaker is optimistic about the Phase 3 results for vanzacaftor and expects a high level of enthusiasm if they come out as expected. They clarify that the QT study is standard and there is nothing new to report. In response to a question about the possibility of one positive and one negative trial, the speaker states that their goal is to have a positive set of three studies and file for a broad label. Another speaker clarifies that their comment about 2024 being a foundational year for exa-cel has nothing to do with consensus and is in response to questions about launch dynamics.

In the paragraph, the speaker discusses the importance of reminding people about the patient journey for exa-cel, a potential treatment for severe sickle cell disease and beta thalassemia. They mention that regulatory approval is expected later this year and that the journey may be long, but the potential benefits for patients are significant. The speaker also reiterates their optimism for the exa-cel opportunity and provides details for a callback for those interested in a replay of the call.

This summary was generated with AI and may contain some inaccuracies.