The Vertex Pharmaceuticals First Quarter 2024 Earnings Conference Call began with a welcome from the operator and an introduction from Senior Vice President of Investor Relations, Susie Lisa. CEO and President Dr. Reshma Kewalramani, COO Stuart Arbuckle, and CFO Charlie Wagner then gave prepared remarks, with a recommendation to access the webcast slides. The call is being recorded and a replay will be available. Forward-looking statements were made, and financial results and guidance were presented on a non-GAAP basis. CEO Reshma Kewalramani thanked everyone for joining and highlighted the company's strong performance in 2023 and the beginning of 2024.

In the first quarter, Vertex saw a 13% growth in revenue, with the launch of CASGEVY in sickle cell disease and beta thalassemia. The company also made progress in its late stage pipeline, with multiple programs advancing towards regulatory approval. In addition, milestones were achieved in the early and mid-stage pipeline, and Vertex announced plans to acquire Alpine Immune Sciences, adding a potential best-in-class molecule for a disease with high unmet need to their portfolio.

Vertex has acquired Alpine, a company with expertise in protein engineering and immunotherapy, to accelerate the development of pove in IgAN and other autoimmune diseases. Vertex is also pleased with the Phase III results of their vanza triple program for cystic fibrosis and continues to work towards bringing all eligible patients to carrier levels of sweat chloride. The results of the vanza studies demonstrated non-inferiority to TRIKAFTA on lung function and superiority on sweat chloride levels, with a high proportion of patients achieving normal levels.

The RIDGELINE study showed that vanzacaftor had a significant impact on patients aged 6 to 11 with cystic fibrosis, with 95% of patients achieving sweat chloride levels below the level of diagnosis for CF. This could potentially set a new standard for CF treatment. The therapy also offers once-daily dosing and a lower royalty burden. Regulatory submissions have been completed in the US and EU for patients aged 6 years and older, and submissions are on track to be completed in other countries. VX-522, a CFTR mRNA therapy, is also in development for CF patients who do not produce any CFTR protein. In the pain program, seceptrogene has shown strong safety and efficacy in treating moderate to severe pain, and has received fast track and breakthrough therapy designations from the FDA. A rolling NDA submission has been granted.

The company has made progress in their Acute Pain pipeline with the submission of multiple modules and the initiation of a Phase I trial for VX-993. They are also planning a Phase II study for an oral formulation of VX-993 later this year. They are also working on a NAV1.8 Pain Signal inhibition program and have had positive outcomes from an end of Phase II meeting with the FDA for suzetrigine in painful diabetic peripheral neuropathy. The pivotal program for suzetrigine will consist of two randomized studies with 3 arms each, and a subset of patients will have the opportunity to participate in a 52-week open-label extension study. The company's goal is to obtain a broad peripheral neuropathic pain label for suzetrigine.

The company is conducting a Phase II study of suzetrigine in lumbosacral radiculopathy, a condition for which there are currently no approved treatments. They expect to complete enrollment by the end of the year and believe they have the potential to transform the treatment of pain. In their T1D program, they have a stem cell-derived therapy, VX-880, which has resumed dosing after data review and will be presenting updated data in June. They also have a self plus device program and a hyperimmune program in preclinical development, both of which aim to avoid the use of immunosuppressive drugs.

The company is excited about the potential of povetacicept, their lead asset from the acquisition of Alpine Immune Sciences. It has shown high efficacy in preclinical and clinical studies for B cell-driven diseases and has better drug-like properties with once every 4-week dosing and low injection volume. Upcoming milestones include initiation of Phase III study and readouts from ongoing studies. The company also discusses their strong performance in CF and the launch of suzetrigine for acute pain.

Vertex Pharmaceuticals has a positive outlook for their cystic fibrosis (CF) business in the short, medium, and long term. They plan to drive growth by reaching more eligible patients, including younger age groups and new geographies. They have received regulatory approvals for new treatments and are preparing to launch them. They also have a promising mRNA program for CF. The company is also making progress with their launches in sickle cell disease and beta thalassemia.

The enthusiasm from stakeholders is high for the launch of CASGEVY, with 9 ATCs already activated and more than 25 centers activated globally. Patient initiations and cell collections have also begun, with 5 patients already having cells collected. Payers are recognizing the clinical benefits of CASGEVY and contracts and policies are in place for over 200 million lives in the U.S. and progress is being made in other countries.

In Europe, Vertex has seen success with their CASGEVY drug for sickle cell disease and beta-thalassemia, particularly in France with a reimbursed early access program. They are also pleased with their progress in the Middle East, where there is a high prevalence of these diseases and a government focus on improving healthcare. Vertex has secured reimbursement agreements in Saudi Arabia and Bahrain, potentially allowing access for over 23,000 patients. They are also working to increase the number of treatment centers and expand patient access in the region. Moving on to suzetrigine, Vertex believes this drug has the potential to be a transformative treatment for acute and peripheral neuropathic pain. It has shown strong efficacy and safety in clinical trials and has the potential to be used for a variety of moderate to severe acute pain conditions in both surgical and nonsurgical settings.

The company's profile aims to address the unmet need for effective and safe pain relief among patients and physicians. Market research has identified a potential market of 80 million patients prescribed pain medication annually, with a high concentration in the institutional setting. The company plans to focus on this setting and target specific acute pain conditions and procedures, as well as physician specialties likely to adopt their product. Early adoption is expected to occur at discharge due to the process for new medicines to be approved for use in institutions.

Vertex is preparing for the launch of their new acute pain treatment, which is expected to make up 35% of the total acute pain treatment in the U.S. each year. They are engaging with key decision-makers and plan to start contracting discussions in the second half of the year to support formulary adoption. Their commercial team is also being built out, with 150 new colleagues being hired. Vertex is also focusing on shaping state and federal policies to encourage the use of non-opioid alternatives and remove financial barriers. They plan to have a science-driven and digitally enabled commercialization approach, with a focus on population health decision makers. Patient advocacy and public policy efforts will also support their commercial activities.

In the first quarter of 2024, Vertex saw a 13% increase in revenue compared to the previous year, with strong growth in the U.S. and international markets. The launch of TRIKAFTA for patients ages 2-5 and KAFTRIO '25 contributed to this growth. The company is also preparing for the launch of vanzacafta triple combination and suzetrigine for acute pain, which will drive further revenue growth. In terms of expenses, the company saw a decrease in non-GAAP R&D and SG&A expenses, partially due to a decrease in acquired IP R&D charges.

In the first quarter of 2024, Vertex's non-GAAP R&D expenses remained relatively flat compared to the previous year due to increased investment in earlier-stage R&D projects and decreased costs from completed clinical trials. Non-GAAP SG&A costs increased due to investment in the commercial organization and launch activities for CASGEVY and acute pain. Non-GAAP operating income increased by 48% compared to the same period in 2023, with a lower effective tax rate. Non-GAAP earnings per share also increased due to revenue and expense phasing and a lower tax rate. The company ended the quarter with $14.6 billion in cash and investments, which will be used to fund the acquisition of Alpine Immune Sciences. This acquisition aligns with Vertex's focus on investing in innovation, including through external business development.

Vertex's Phase III-ready povetacicept has the potential for multibillion-dollar revenue in IgAN and other serious diseases. They have also allocated $140 million for share repurchases. Their 2024 total product revenue guidance remains unchanged, with expected growth in CF and contribution from the commercial launch of CASGEVY. They also project a non-GAAP operating expense range and effective tax rate for 2024. In addition, they have made progress in their pipeline and entered the clinic for ADPKD, their 10th disease area.

Vertex announced the acquisition of Alpine Immune Sciences, which aligns with their strategy. They plan to use their resources to accelerate the development and commercialization of pove, with the goal of approval in IgAN in 2027. They anticipate important milestones in 2024 and will update on their progress in future calls. In the Q&A, they were asked about potential claims for sweat chloride benefit in Vans and 548 in acute pain. They stated that they have included sweat chloride in all CFTR modulated labels as a PD marker and will continue to do so. They also mentioned the potential for a claim as an alternative to opioids or Lyrica in the regulatory climate.

The speaker expects that the chloride data from the vanza triple studies will be included in the label for the drug. They have already initiated the filing for VX-548 and expect to complete it this quarter. They will be submitting all of the data they have generated for acute pain and diabetic peripheral neuropathy. The discussion with regulators about displaying the data for the opioid arm in the acute pain study will happen later. They have a pre-gabalin arm in the Phase III DPN study to share the data with prescribers. The speaker believes that the most important data for the acute pain study will be the primary endpoint data.

The company is seeking a broad label for its new pain medication, allowing physicians to use it for any type of acute pain. They have strong efficacy and safety data to support the use of their product, which does not have addictive potential. They also have plans to develop other pain medications for different types of pain, such as musculoskeletal pain, and may consider partnering with a commercial partner to maximize value.

Vertex is confident that their NAV1.8 and NAV1.7 pain assets will successfully treat musculoskeletal pain, as their predecessor molecule has already shown potential. However, they will focus first on acute and neuropathic pain, and will not be commercializing the musculoskeletal pain treatments themselves. They acknowledge the value and need for these treatments, but want to take it one step at a time. When it comes to the acute pain program, both hospital administrators and physicians will play a role in decision-making, and outcomes data may be required to make a case for using these treatments as an alternative to opioids.

The speaker discusses the process of advocating for the efficacy and safety of the medicine suzetrigine, which will go through a standardized process before being added to hospital formularies. The speaker believes that the medicine will be most commonly used in discharge settings. They also mention that every patient treated with suzetrigine instead of opioids is considered opioid sparing, and this data, along with other efficacy and safety data, will be compelling to stakeholders. The speaker is then asked about the number of patients in the US who have had their cells collected, and they decline to provide specific numbers but mention that the growth of cell collections is expected to continue in the future.

The company will not comment specifically on patients in the cell collection process, but they are seeing momentum in activations and collections. They expect this trend to continue throughout 2024. The company is advancing 993 to Phase 2 and expects it to be differentiated from 973, which recently completed Phase 1. There were inventory moves in the first quarter, but the company saw some benefit from phasing of international channel inventory.

The paragraph discusses the expected benefits of $75 million to $100 million in the second quarter, as well as the progress of two molecules in preclinical development, VX-548 and VX-973. The company is looking for molecules that can be taken orally and intravenously, and that have the right drug-like properties to be combined with NAV1.7. VX-548 is expected to have Phase III results presented at fall meetings, and there is no update on pricing and reimbursement for CASGEVY in the Middle East.

Stuart Arbuckle and Terrance are discussing a new opportunity that is very exciting for them. They cannot disclose specific pricing data, but the reimbursement agreements they have signed reflect the value and benefits of the product. They plan to follow the same philosophy in all countries where they are commercializing the product. Phil Nadu asks about formulary and access discussions for 548 and the potential for reimbursement after opioids in the acute pain setting. Stuart explains that government programs may incentivize reimbursement ahead of opioids and that discussions with policymakers and formulary discussions are separate. Reshma Kewalramani adds that Brazil is a potential market for the CF franchise and they have regulatory approval and reimbursement there, as well as formulary discussions for Suzetrigine.

The policy initiatives aim to reduce financial disincentives for patients and institutions to choose non-opioid brands over generic opioids. This includes initiatives like "no pain" and the alternatives to Pain Act. These discussions are different from the clinical discussions with institutions regarding the appropriate use of non-opioid medications. The speaker cannot predict what will happen with 2,000 institutions, but hopes that patients will not have to step through generic opioids.

The speaker believes it is unreasonable to expect patients to go through a therapy with significant side effects and addictive potential when there is a safer and more effective alternative available. They also mention that there are around 1,500 eligible patients for the new medication in Brazil and that they have a reimbursement agreement with the government. The speaker also mentions that they expect to receive priority review for acute pain and that they are currently working on the commercial build-out for the program. They clarify that 5 patients have completed the cell collection process for CASGEVY, but will not provide any further information on the progress of individual patients.

The speaker discusses the progress of VX-548 for acute pain and the likelihood of receiving priority review from the FDA. They also mention the recruitment of teams for the launch and revenue recognition. The next question is about how Vertex will navigate the launch of IgAN when Otsuka may have GFR data, and the speaker also addresses the potential for myotonia as an endpoint in the DM1 Phase I/II trial.

The speaker discusses two programs, DM1 and IgA nephropathy, both of which are in Phase I/II trials. They mention the potential for accelerated endpoints in rare diseases like DM1 and the importance of efficacy in IgA nephropathy. They also note the potential for Poly's drug to be best-in-class due to its high reductions in proteinuria. The question is raised about how the company plans to highlight the benefits of having bliss in the IgA nephropathy program.

The speaker is discussing the potential benefits of list in treating IgA nephropathy and how it can differentiate from other treatments. They mention that list is a dual inhibitor of BAFF and APRIL and has shown positive results in clinical trials, particularly in reducing proteinuria and hematuria. The speaker then addresses a question about CF and TRIKAFTA sales in the US, stating that there was strong volume growth year-over-year and not to read too much into sequential quarter fluctuations.

The speaker discusses the seasonal fluctuations in gross to net income in the first quarter and the impact of a price increase throughout the year. They also mention strong year-over-year growth in the U.S. and outside the U.S. The operator then concludes the call and provides information for accessing a replay of the event.

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