The operator welcomes participants to the Vertex Pharmaceuticals Second Quarter 2024 Earnings Conference Call and introduces the speakers. The speakers include Dr. Reshma Kewalramani, Vertex's CEO and President, Stuart Arbuckle, Chief Operating Officer, and Charlie Wagner, Chief Financial Officer. The call will discuss forward-looking statements and financial results, which are based on management's current assumptions. The results and guidance will be presented on a non-GAAP basis. Dr. Kewalramani thanks everyone for joining the call.

Vertex Pharmaceuticals had another strong quarter with excellent performance and commercial execution. They are prepared for potential launches of two new drugs and have a promising pipeline. They have increased their full-year revenue guidance and are pleased with the reception of their sickle cell disease and beta thalassemia drug. They have also completed two regulatory submissions for their cystic fibrosis and acute pain drugs. Progress in their mid and late stage pipeline is also going well, with three specific programs showing promising results.

The company has made significant progress in their Povetacicept program and will begin a Phase 3 pivotal trial for IgA nephropathy. In cystic fibrosis, they have achieved positive results in their Phase 3 Vanzacaftor Triple program, which could potentially become the new standard of treatment. The company's VX-522 therapy for CF patients who do not produce CFTR protein is also progressing well. In the pain program, the company has a portfolio of selective pain signal inhibitors and has made progress in acute pain treatment.

The company is pleased that their drug Suzetrigine has been accepted for priority review by the FDA and has a target action date of January 2025. They also have another drug, VX-993, in a Phase 1 trial and a Phase 2 study for acute pain. In addition, they have multiple programs for Peripheral Neuropathic Pain, including a Phase 2 study for Painful Lumbosacral Radiculopathy and a Phase 3 pivotal program for Suzetrigine in painful diabetic peripheral neuropathy. The company is also excited to begin the Phase 3 program and has high enrollment rates for their studies.

In this paragraph, the speaker discusses the progress of a Phase 2 study for VX-993 in diabetic peripheral neuropathy and the potential of VX-880 as a functional cure for Type 1 Diabetes. The results from the ongoing study show promising results, with all patients demonstrating islet cell engraftment and glucose-responsive insulin production. The speaker also mentions plans to expand the study to include an additional 20 participants.

The company is continuing to work with regulators to finalize the requirements for pivotal development of their VX-880 cells and VX-264 program. They have completed Part A of the Phase 1/2 study for VX-264 and are currently enrolling patients in Part B. They also provide an update on their recently acquired asset, povetacicept, which is on track to begin a global Phase 3 study for IgA nephropathy this month. The pivotal program will involve a single global trial with approximately 480 patients receiving either pove or placebo on top of standard of care.

The company is conducting a Phase 3 study for pove in IgA nephropathy, with the opportunity for accelerated approval. They will also continue to evaluate pove in two Phase 2 trials for other conditions. Development of VX-634 and VX-668 for AATD has been discontinued based on biomarker analyses, but research efforts in this area will continue. In terms of commercial updates, the company expects sustained growth in CF, with a focus on reaching more eligible patients and expanding into new geographies. They also anticipate global approvals for additional rare mutations and launches in younger age groups.

In June, the company announced a long-term reimbursement agreement with NHS England for their CFTR modulators, which has since been extended to Scotland, Wales, and Northern Ireland. The company expects growth to be driven by the launch of their fifth CFTR modulator therapy, the Vanzacaftor Triple combination, which may appeal to both current and previous CFTR modulator patients. In the longer term, the company also has a program focused on developing medicines for CF patients who do not respond to CFTR modulators. In addition, the company is making progress with the launch of CASGEVY, a potentially curative therapy for sickle cell disease and beta thalassemia, with strong engagement from physicians, patients, and payers.

The company is pleased with the progress of their ATC activation, with 35 centers now activated and a total of 75 expected globally. They have seen a growing number of patients beginning their treatment journey, with approximately 20 patients already having cells collected. The company has made strong progress with payers in all regions, with early access programs and reimbursement in various countries. In the US, payers are supportive and coverage is not seen as a significant obstacle. The company acknowledges the complexity of the patient journey but is encouraged by the high interest level from patients, physicians, and other stakeholders. The Middle East presents a significant opportunity for CASGEVY due to the high prevalence of hemoglobinopathies and the government's focus on improving the health of their citizens.

The company is confident that their treatment for CASGEVY will help many patients and is worth billions of dollars. They are also developing a new treatment option for acute and peripheral neuropathic pain which could benefit 90 million patients in the US. The company has made progress in building their commercial team and is engaging with IDN leaders and formulary decision makers to promote their treatment. There is high enthusiasm for a new class of pain treatment that is effective and non-addictive, and the company is providing key information to support swift reviews by relevant bodies.

The process of getting Suzetrigine approved and covered by hospitals and payers can take up to 12 months, but efforts are being made to accelerate this timeline. Contracting discussions are expected to take place in 2024 with the goal of building coverage in 2025. The No Pain Act, which allows for separate payment for non-opioid therapies for Medicare patients, was passed in December 2022 and is expected to be implemented in January 2025. Suzetrigine is not currently included in the proposed rule for separate payment, but is expected to be eligible once it is FDA approved. Other supportive policy initiatives at the federal and state level are also expected to aid in the adoption of Suzetrigine. Additionally, access to acute pain medication is crucial for patients and efforts are being made to ensure timely access to prescriptions.

Vertex is working to ensure broad availability of Suzetrigine, a new treatment for moderate to severe acute pain, by partnering with pharmacy retail organizations and offering financial assistance programs. They are also planning to launch the Vanzacaftor Triple combination for cystic fibrosis and CASGEVI in the US, Europe, and the Middle East. The company's Q2 results showed a 6% increase in revenue, with strong growth in the US and international markets. They are focused on driving diversified revenue growth and redefining the treatment of pain.

In the second quarter of 2024, the growth of the company was driven by strong patient demand for TRIKAFTA. This was also seen outside the U.S. due to the KAFTRIO launches in children's ages two to five. However, there was a reversal of the first quarter channel inventory build. Operating expenses were significantly higher compared to the same period in 2023, mainly due to AIPR&D charges from the Alpine acquisition. Non-GAAP R&D expenses remained flat, while SG&A expenses increased due to investments in the commercial organization. The company expects expenses to increase in the remainder of 2024 as they advance various studies and prepare for potential new launches. Despite strong revenue and operating results, the company reported a non-GAAP operating loss of $3.1 billion due to the AIPR&D charge.

In the second quarter of 2023, Vertex reported $1.15 billion in non-GAAP operating income, with a negative 10% tax rate due to a one-time, non-deductible charge for the acquisition of Alpine Immune Sciences. This resulted in a non-GAAP loss per share of $12.83. Vertex ended the quarter with $10.2 billion in cash and investments, and also repurchased over 700,000 shares. They have raised their 2024 product revenue guidance to a range of $10.65 billion to $10.85 billion and expect continued growth in CF. Their non-GAAP guidance for operating expenses remains unchanged, including the absorption of Alpine's projected expenses.

Vertex expects to spend $4.6 billion on Acquired IPR&D for the year, including the non-deductible Alpine asset acquisition charge. This will result in a non-GAAP effective tax rate of approximately 100% for 2024. However, without the impact of the Alpine charge, the underlying non-GAAP effective tax rate would have remained in the range of 20% to 21%. Vertex had a successful quarter, with strong revenue growth, progress on their CASGEVE launch, and regulatory approvals. They also acquired Alpine, which aligns with their R&D strategy and has potential as a pipeline and product. They are already utilizing their capabilities to accelerate development in IgAN, with Phase 3 set to begin this month. In addition, they anticipate further achievements in 2024, including milestones in their pain portfolio and progress in other disease areas. They look forward to updating investors on their progress in the future.

A question was asked during a conference call about the early launch dynamics of the CFTR modulator vanzacafta triple and the potential for a significant number of early adopters. The company declined to give specific revenue breakdowns for their CF franchise versus CASGEVI. The company's research with physicians suggests that there will not be a single bolus of patients interested in vanzacafta, but rather a broad interest from both current and previous CFTR modulator users. Another question was asked about the potential to develop VX-548 for neuropathic pain and the company's preclinical development efforts for NAV1.7 inhibitors.

The company is making progress in developing NAV1.7 inhibitors for acute and neuropathic pain. These inhibitors could be used alone or in combination with other inhibitors in the company's portfolio. The company's focus is currently on serving patients in the US, with plans to consider opportunities in other countries later on. The regulatory path for VX-880, a treatment for Type 1 diabetes, is unclear at this time.

Reshma Kewalramani, the CEO of the company, was asked about the progress of two programs, VX-264 and VX-880. She stated that they are in the full dose stage for VX-264 and results will be available in 2025. For VX-880, they have completed enrollment and dosing for the original 17-patient study and are now in the full dose stage without a stagger. The company has had positive discussions with regulators and plans to expand the study to include 20 more patients. Kewalramani compared the Type 1 Diabetes Program to the efficient sample size of the CASGEVY program and mentioned the possibility of converting it from a Phase 1-2 to a Phase 1-2-3 trial. She stated that they will provide updates as they complete discussions with regulators. The next question came from Evan Seigerman with BMO Capital Markets.

Stuart Arbuckle, in response to a question about the launch of Suzetrigine, explains that their enthusiasm for the drug is growing as they get closer to the launch. However, there are practical factors that need to be addressed, such as going through formulary and policy adoption processes with institutions and payers. They are already engaging with GPOs, IDNs, and retail pharmacy organizations to support the use of Suzetrigine.

In this paragraph, the speaker discusses the challenges that may arise in the process of bringing Suzetrigine to market, including potential delays in obtaining medical policy approvals and insurance coverage. They also mention plans to offer financial assistance programs to ensure patients have access to the drug. The speaker then answers a question about competition in the IgA nephropathy market, comparing Pove to other treatments such as felzartamab and anti-CD38. They also address a lawsuit regarding CASGEVI and its impact on the drug's launch.

The paragraph discusses the high prevalence of IgA nephropathy in the US and the lack of specific therapy for the disease. The speaker expresses enthusiasm for Alpine's povetacicept, a dual APRIL BAFF inhibitor, which directly targets the underlying cause of the disease by inhibiting B cell proliferation. The drug has shown promising results in preclinical and clinical studies and has potential to be best-in-class for IgAN and other B cell-mediated kidney and heme diseases. The speaker is excited for the drug's Phase 3 program in IgA nephropathy.

Stuart Arbuckle discusses the support services provided to patients undergoing treatment for CASGEVI, including travel and lodging assistance and fertility preservation. However, there is currently a lack of approval for fertility preservation for government-insured patients, leading to a lawsuit. This is not expected to affect the successful launch of CASGEVI, but the company is committed to fighting for equitable access for all patients. The next question is about Vanzacaftor pricing.

Reshma Kewalramani and Stuart Arbuckle were asked about the potential pricing for Vanzacaftor and the release of Phase 3 data for VX-548. Kewalramani confirmed that the data will be presented at the ASA Fall Conference and accepted in the Best Abstract category, with full manuscripts to follow. Arbuckle stated that pricing for Vanzacaftor will be based on its clinical benefits and value to patients, and a decision will be made closer to launch. The next question was about the LS-SAR trial and expectations for a two-point improvement, as well as the possibility of an adcomm for the acute pain program.

The speaker addresses two questions about the company's recent developments. Firstly, they are pleased that their submission for Suzetrigine was accepted and granted priority review, and the agency has informed them that an advisory committee may not be necessary. Secondly, the speaker discusses the LS-SAR trial for VX-548, which has exceeded enrollment expectations and is expected to share results this year. The study uses a high dose and has a placebo arm, as there is currently no approved therapy for this type of pain. In response to a question about Vanzacaftor, the speaker mentions that they expect patient uptake to be positive, but does not provide further details.

The company is excited about the launch of Vanzacaftor, a new therapy for CFTR modulation. They expect it to be of interest to patients who are already on CFTR modulators as well as those who have discontinued. The therapy's once-daily dosing is also seen as a benefit. The company has received positive feedback from physicians and patients, but they cannot predict how quickly people will switch to the new therapy.

The speaker discusses patients with CF and their interest in drug development, specifically Vanzacaftor. They mention that patients visit their doctors once a quarter and are interested in medicines that may bring higher efficacy. The next question is about the Alpine product and how it compares to other programs. The speaker believes it is best-in-class and will have greater reductions in proteinuria and stabilization of EGFR, potentially benefiting lupus and other autoimmune diseases. The question also touches on the No Pain Act and its impact on reimbursement for acute pain, with a focus on government-paid patients and commercial plans.

The speaker addresses a question about the company's product not being listed and explains that it is because it has not yet been approved. They anticipate being added to the list once approval is obtained. The speaker also discusses the company's efforts in the Medicare and commercial areas. Another question is asked about the company's product for IgA nephropathy and the speaker explains that proteinuria is important in many B-cell mediated diseases, but other biomarkers may be more relevant in certain diseases.

In this paragraph, the speaker explains that while proteinuria is an important marker, there are other markers of interest such as hemoglobin or platelets. They express enthusiasm for povetacicept because it is effective in suppressing B-cells, which is important in B-cell mediated diseases. The moderator then thanks the participants and provides information on how to access a replay of the call.

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