Vertex Pharmaceuticals Incorporated (VRTX) Earnings Call Transcript & Summary

Hi there. This is Liisa Bayko, biotech analyst at Evercore ISI. Welcome to HealthCONx day 2. We're very pleased to be hosting a nice juicy 45-minute session with Vertex. And we've got Stuart Arbuckle, which I think is just like a great person to be talking to today because we do have a lot of commercial questions, and you are the COO. And so you know all about operations and commercialization, and we have a lot of questions there. So I don't -- I think just to frame it up, maybe just give us a quick snapshot of Vertex to frame the conversation for anyone who may be kind of needing a bit of a refresher that's on the line.

All right. Certainly, Liisa. Well, firstly, thank you to you and to Evercore ISI for inviting us. Really pleased to be here. Hello to everybody who is on the webcast. Just a reference, we will be making forward-looking statements on our call. Obviously, there are inherent risks and uncertainties, and I would refer you to our SEC filings to read more about those. But yes, let me give you a quick update, Liisa, on where we think we are. We do think we are at a really important strategic inflection point for Vertex as a company, and I'll explain why I think that, and what we see as some of the really exciting things ahead of us in the future. I'm going to start with our corporate strategy and our research strategy because I think those are incredibly important to understand, to understand why we think we're at this really important inflection point. So our corporate strategy to invest in scientific innovation to discover and develop transformative medicines for people with serious diseases that can be served through specialty markets. And every word in that corporate strategy statement is important. Invest in scientific innovation, we invest well over 70% of our operating expenses in R&D because we believe that is the best way of driving value for patients and for our shareholders. We only invest in things where we think we are going to make a transformative medicine. We're not interested in me-too or incremental improvements. We're only interested in really serious diseases and specialty markets is important because we want to make sure that we can commercialize those medicines through a specialty sales and marketing infrastructure again so that we keep our SG&A as low as possible, to invest the vast majority of our OpEx into R&D. So that's our corporate strategy. Underpinning that is our research strategy. And our research strategy has a number of really important components. The first one is we only go after diseases where we truly understand the human biology. And in addition to that, we only go after diseases where we have a validated target. Now it could be validated genetically, it could be validated pharmacologically. But the reason why we only want to go after validated targets is we want to address the challenges which have been inherent in our industry for decades and decades now, which is R&D productivity is typically not very high. For every 20 molecules, you might put into a first-in-human study is only one ever makes it to the market as an approved medicine. Those are really terrible odds. Most people's answer to those odds is kind of the shots-on-goal hypothesis. We think that's one solution. We just don't think it's the best solution to go after. What we're trying to do is radically increase our chances of success. And we think we can do that by going after validated targets. The last part of the research strategy is being modality agnostic. We are going to choose the right tool for the job. So whilst we were born, if I can put it that way, as a small molecule company, if you look at our pipeline now, we have CRISPR-Cas9 gene editing, we have cell therapies, we have cells plus devices. We clearly still have a big focus on small molecules, but we're going to go after the right tool to hit that validated target because we believe that's the best way of discovering and developing a transformative medicine. That's an [indiscernible] to where we are because that's going to tell you whether that strategy is working. And we fully believe that, that strategy is working. Obviously, we're well known for our success in cystic fibrosis with our latest medicine TRIKAFTA. We've had terrific, terrific success getting reimbursement and access for patients around the world. We shared on our latest earnings call, our revenues for the quarter, $2.3 billion. We've raised our guidance for the full year to $8.8 billion to $8.9 billion as we continue to add new patients around the world. There is still substantial growth left in our CF franchise. That's either through securing new reimbursement agreements in the increasingly small number of countries where we don't yet have reimbursement. It's executing on launches, and it's continuing to develop our medicines down to younger and younger age groups. And then the additional thing is we're continuing to raise the bar. We have a new triple combination in Phase III, which I'm sure we'll talk about, which we're very excited about. And then in addition, there's about 5,000 patients who either produce no protein or the protein is not responsive to our CFTR modulators. And that's where our approach with mRNA comes in for those 5,000 or so patients, and we're on track to submit our IND this year. Outside of that, the pipeline has really delivered. We have seen proof of concept in 5 diseases outside of cystic fibrosis, including sickle cell, beta-thalassemia, pain, type 1 diabetes and AMKD. We have multiple late-stage clinical development programs ongoing. Our next commercial opportunities are on the very near-term horizon. As we've disclosed, we are planning to file for exa-cel by the end of this year for the EU and for the U.K. and begin our rolling submission here in the U.S. for exa-cel, and therefore, we would expect the approval probably to come towards the back end of next year. And then our pain program, VX-548, we are in Phase III development in acute pain and we see that as a very, very significant opportunity as well. So the pipeline has really, really matured, I would say, over the last 12 to 24 months. And that's why we think we are at such an important strategic inflection point. And then the last thing I would tell you is we all know this is a very capital-intensive industry. We are in a very strong financial position with the ability to invest both in internal and in external innovation. We have a very significant cash balance, which gives us all the flexibility that we need to invest in all the great things we've got going on internally, but also continue to look externally. So that's the 5- or 7-minute summary on where I think we are, Liisa, but we -- overall, we think we are at a really, really important inflection point for the company, and it's an exciting time.

What's the #1 question that you get from investors, Stuart?

The #1 question I personally probably get because of the reason that you cited at the beginning, having responsibility for commercial is about our future growth prospects in CF. Obviously, we've seen terrific, terrific growth in CF over the -- literally, over the last decade since we launched KALYDECO back in January 2012. And as we continue to discover and develop better and better medicines, we continue to see our revenue grow at really, really prodigious levels as we've been able to get access for more patients around the world. So the biggest question I typically get is, what does the future look like? And we think the future looks really good for our CF business. They continue to be patients, as I mentioned in my opening remarks, who aren't yet on a CFTR modular. They're either in countries where we're early in the launch, for countries where we've recently secured reimbursements, places like France and Italy and Australia and places like that. Or they're in a relatively small number of countries in Europe, for instance, where we don't yet have reimbursement. And then we're also continuing to work down the age ranges for all of our medicines for ORKAMBI 1 to 2, for TRIKAFTA for 2- to 5-year-olds. We are planning to submit global regulatory filings by the end of this year. So continuing to get down into younger and younger age groups. And then as I mentioned, there are 5,000 or so patients who don't produce a protein, which is responsive to our CFTR modulators. And for them, we're working with our partner, Moderna, on our mRNA program which as I said, we will be -- we're on track for the IND for that program for the end of this year, and that's an incredibly exciting program. This would be the first time those patients might have something which addresses the underlying cause of their CF as opposed to just the sort of symptomatic therapies that they are currently on today, which is the same situation the rest of the CF population was in 10 years ago before KALYDECO was approved.

CF business stands alone in terms of like ownership of the category and the size of the market. I mean, I pointed this out to people multiple times. I've been doing this for a long time. I've never seen this before where you can really own a category, get almost all the patients and you have virtually no competition. It's incredible. I do get a lot of questions on kind of like valuation based on forward growth as you kind of near the peak as, right, you talked you're close to $9 billion at the end of this year. I think a lot of people might see think of it as kind of maybe an $11 billion business in total. Like where do you see kind of like the peak in terms of the size of the CF franchise? Let's not talk about the mRNA platform right now, but just the oral.

Yes. I mean I would say that we're not in the practice of giving long-term guidance, Liisa. But as I said, we do think there is substantial growth still to come from a number of areas. TRIKAFTA is an amazing medicine. We still have some work to do there, as I said, both in terms of launches, new reimbursements and getting down, importantly, into lower and lower age groups. The second area of growth that I think is underappreciated -- and it really talks to the kind of durability of our franchise. It really talks to, I think, why we have had such a strong leadership position is that we have continued to serially innovate in cystic fibrosis. KALYDECO was a great medicine but it only served 3.5% of the population when we first got it approved. ORKAMBI was an incredible breakthrough when it first came along, have the potential to treat patients with up to sort of 50% of genotypes, but we knew we could do better and that's where SYMDEKO came along. But we knew we could do even better in terms of efficacy and get into more genotypes. That's where TRIKAFTA/KAFTRIO came along. But we're not done yet. And our real goal is to try and get the vast majority of patients to carrier levels of chloride transport and to get into those patients as early as possible in life because our belief is that if we can do that, and restore their chloride transport to carrier levels, essentially the same as their parents, we may be able to prevent CF developing in people as we know it today. That's the kind of the ultimate goal. It's been our goal for the -- all the time that I've been here at Vertex. And whilst TRIKAFTA is an amazing medicine, we believe we can do even better. And why do we believe that? We believe that from our in-vitro assays, which have proven incredibly predictive of what is going to happen in our hands with -- in people with cystic fibrosis. And the vanzacaftor/tezacaftor/deutivacaftor combination in vitro shows superior impact on chloride transport than even TRIKAFTA did. We then did our Phase II studies with that same triple combination, and we saw greater impacts on sweat chloride and really profound impacts on FEV1 as well with that combination. Now obviously, that Phase II program was not comparing it with TRIKAFTA. But in that study, if you kind of accept cross story comparisons, that was the greatest levels of sweat chloride reduction we had ever seen. And so that's why we're so excited about taking that program into Phase III. As I say, it's in Phase III now. We fully expect that the 2 Phase III studies will complete enrollment this year. It is a 52-week treatment period, just to set expectations on when we might see data from that program. So it's a 52-week treatment period. But we are excited about the potential for that triple combination to provide even greater benefit to patients with CF. So we still think we've got a long way to go in CF and even accepting the mRNA programs and additional kind of growth driver. We think there's lots we've got yet still to do to serve the CF population around the world.

Yes. We've been keeping our eye on the competition, and we don't need to get into it because who knows about AbbVie, but there's a company Ciona, that I've also been tracking and they're going after this kind of target, I guess, what they say it's been really hard to get to Nnd2, along those lines. Can you talk about kind of your thoughts on maybe kind of partnering with someone on the outside or bringing something in? Or is it something you would need to do? And what do you think about this particular target that Ciona is working on?

Yes. So as you know, it's not our practice to talk about specific competitors, but let me provide a few comments for context. The first one is around business development. And as you know from a capital allocation point of view, we've essentially had the same priorities for a number of years. And one of those has been that we continue to look at everything that people were doing in cystic fibrosis to see if they've got things that we believe could be additive to what we are doing internally. And I think it's fair to say that we have seen the list of things that look potentially attractive to us that could be better than what we're doing internally through our own labs has kind of decreased over time. That doesn't mean to say we are complacent. That doesn't mean to say we're not looking at everything that the people are doing. In cystic fibrosis, we're certainly not lacking in humility. We've been out innovated before by ignoring what's going on in the outside world, and we're not going to let that happen to us again. But we're very confident in the work that we're doing in cystic fibrosis. I think the best thing that we can do is continue to raise the bar on ourselves, continue to out-innovate ourselves. And as I said, reach higher and higher, so that we're providing incredible levels of clinical benefit to patients. I think that's the best thing that we can do. As I say, it's not that we're ignoring anything that's going on outside. We look at absolutely everything that could be incremental to what we are doing. But we're very confident in the hand that we've got right now.

The mRNA program, I did want to talk about that briefly. Others have tried mRNA for CF and it hasn't worked out very well. What gives you confidence? I know when I was talking to Michael Partridge and with that guy, but when I was talking to him in the past, he's like, look, like we're really committed to CF patients, and we're not going to bring something forward unless we really feel like it's going to work. And so you obviously feel that way because you were expecting IND relatively soon. What is different about your mRNA program than others that have gone before you and tried this unsuccessfully?

Yes. So I think there's -- it's important to remember, there's kind of two concepts that you really need to get right for these kind of genetic therapies, including our own program with Moderna. The first one is the construct. Is the construct that you've got able to achieve the impact that you would want it to have. And we have known for some time using our own in vitro assays, essentially the same assays that we have used for our CFTR modulators that with our -- with the mRNA for full-length CFTR protein, we can get high levels of CFTR protein expression in human bronchial epithelial cells in our internal assays. So we've known that the construct can work for a while. The real challenge has been, and you see this with all genetic therapies and gene therapies, which has really been delivery.

Absolutely.

And you need to get delivery to the cells of interest. And I would say it's really on that dimension that working with our partners at Moderna, we've really made great strides over the last 12 to 18 months. So now we've seen not just in, in vitro studies, but in our -- in some of our animal studies in nonhuman primates that we can deliver using the liquid nanoparticle technology where we can deliver to the cells of interest and get high levels of delivery to those cells and protein expression. So it's really the combination of those two things. It's been less about the construct, whether mRNA itself could potentially work. It's been more about solving the delivery challenge. We think we've made great progress there. That's why we're looking forward to the IND. Hopefully, the IND being approved and then being able to move into the clinic and see whether we can deliver clinical benefit to patients. Obviously, today, there really is nothing that can treat the underlying cause of their disease. But it's really that second. It's really been delivery that has been the area that maybe the most advances in. I would say about liquid nanoparticles is there is precedent for dosing with liquid nanoparticles to the lung and repeat delivery. And so that's the other thing, obviously, as part of your IND enabling study because, obviously, there's a lot of work you have to do on kind of toxicology side. Obviously, that's something which has been helpful that has precedent for LNPs for repeat delivery.

Let's start talking about the pipeline and turn to that. So exa-cel is kind of top of the list, right? You've begun to describe your commercial strategy, so we can get into that. But let's start with the regulatory time lines, but can we count on a priority review. I've been giving actually a lot of questions on when we expect approval. I conservatively at end of the year, maybe into early 2024 is kind of what I was thinking. I just wonder if there might -- I don't know, are you going to get a priority review, do you think? Is that kind of really a realistic tangible thing? It seems like it will be eligible for it. At the same time, it's, I think, a very novel technology. You struggled with FDA and kind of agreeing on what you need for submission and all that kind of stuff. So I just wonder if there might be some additional discussion that's required.

Yes. So I mean, we can really comment on the things that we control. And I can't comment on things that we don't control. So what have we said that we are going to do. We've said that we are going to complete our submissions in Europe and in the U.K. by the end of this year, and we're on track to do that and begin the rolling submission for our BLA here in the U.S. and that we anticipate that, that will complete by the end of Q1 of next year. As to exactly what the regulatory timing will be, unfortunately, Liisa , that's not kind of in our control. It will depend on things like what designations we get, how they choose to look at the application, how quickly they choose to move, et cetera, et cetera. None of that is in our control. I would anticipate it's going to be approved towards the back end or going well towards the back end of 2023. But as I say, that is not in our control. And therefore, we can really only comment on what is in our control, which is making sure we get the submissions in as per the time line that we've outlined.

And you've described -- is it 23 centers you said that the centers of sort of excellence kind of thing that you'll be sort of targeting in your initial phaseout of the rollout and have those to be accredited centers? Is that what you said?

Yes. So we have said that we anticipate coming through kind of authorized treatment centers. Clearly, the centers that can perform this procedure are transplant centers, so we'll be working with those transplant centers. The diseases are relatively concentrated, both actually in Europe and in the U.S. It's concentrated in about 25 states, 90% or so of the patients who might be eligible are in about 25 states in the U.S. and over 75% are in 4 countries in Europe. What we've said is that we anticipate kind of getting to a steady state of about 50 or so centers here in the U.S. and about 25 or so in Europe. And we see that network would be able to serve the vast majority of patients in both the 4 major countries that have a prevalent population in Europe and here in the U.S. Obviously, we're already working with those centers now to see who might be interested in kind of being part of that network. So far, the response has been really positive, which is great. But it's 75 between the U.S. and the EU...

Got it. Got it. I was mixing up the states or more like 25 states and then...

Correct. Yes. Just to put that in perspective for people, we currently serve cystic fibrosis patients through about 275 CF treatment centers in the U.S. So just to give you some sort of context, it is a relatively concentrated network of treatment centers that we imagine kind of bringing on board in that scenario.

Like I've always -- and I've talked about this before, Stuart, but one thing that kind of I've always been thinking about is the capacity and maybe that's a good problem to have. But as you think about these 25 centers in the U.S., what's the capacity that you think you can get to with these centers?

50 centers in the U.S.

Sorry, 50, 50 -- 25 states.

No worries. So yes, I mean, I think the capacity is one of those discussions that we are having right now with those transplant centers because clearly, these transplant centers are doing a lot of other things including malignant hematology as well. They are doing some haplo and other transplants like that. So that's one of the conversations that we are having with those centers right now. But clearly, capacity is going to be a consideration in terms of the uptake of these types of technologies as indeed is going to be physicians and patients wanting to embark on what is not a short treatment journey. So certainly, there are logistical if I can call it that issues, and it's really those logistical and administrative issues that we're currently working through with the treatment centers in this period between us filing and subsequently getting approval.

Look, I imagine this is going to be a relatively expensive therapy. And you're targeting a population that I would say as a whole, maybe has more trouble with access to health care than maybe other demographic groups. How -- what can you do to ensure access? This has been on my mind as well, and it actually applies to the -- in a different way, but to the AMKD program as well. I think like -- I think there's never been a better time to try to address some of these difficult topics. But at the same time, what tangibly can you do to ensure access? What are you working on?

Yes. I would totally agree with you, Liisa. I don't think there has been a better time for the payer and policymaker community to kind of step up and address some of the issues that this population and others, but this population has faced over the years in terms of their interactions with the medical establishment. So we are working at all levels, federal level, we're working at the state level with policymakers. A relatively large percentage of this population is Medicaid. And therefore, what individual states choose to do is incredibly important. So as I said, we are working at both the federal and the state level. We are also working with commercial payers. A lot of this is going to be about helping them understand the very, very significant unmet need. The very, very significant emotional, clinical and financial burden that this disease puts on both patients, caregivers and the overall health care system. And therefore, there is a real clinical but also moral imperative to address these two diseases and to provide access as close to day 1, if I can call day 1, the day of approval, as possible. That's what we're focused on. The other insight that we are gathering from those interactions with payers is that we are going to have to be working with them to define what is the appropriate payment models. That is one of the big issues for these kinds of potentially onetime curative therapies is what does the payment model look like for these types of things. It's been fascinating in our discussions with payers, not just here in the U.S. but also in Europe. But it's clear that one size fits all is not going to work. We are going to have to have a variety of different payment models available, we're going to have to be creative. We're going to have to be flexible. I think our experience in cystic fibrosis is going to stand us in good stead there. I think we've done a great job in being flexible and creative with our reimbursement agreements around CF. Our portfolio agreements are, I think, still truly unique in the industry, and I think that same sort of creativity, innovativeness, ability to work very closely with the payer community is going to be really important solving the access challenges that this population has experienced in the past.

So you're a first-mover in this whole area of ex vivo treatment for the sickle cell and beta thal population, but there's a bunch of people coming behind you, right? And they kind of all want to be in the same category. What -- how do you think about kind of, I guess, offensively and defensively positioning yourself given the kind of wave of competitors are coming behind you? And are there any advantages to being kind of first?

Yes. I mean I think the first thing that's going to be important is what is the level of clinical benefit and what is the benefit risk profile of the technology that you're bringing forward. And we feel really good about the data that we've seen and disclosed to date on exa-cel. We feel really good about the approach we're taking with our CRISPR-CAS9-based approach and the very precise editing that, that delivers. So I do think, as always, with the uptake of any medicine, you really need to evaluate two things. What's the level of unmet need, clearly, super high, in these two populations. And then what's the level of clinical benefit and the benefit risk profile that you're able to bring to bear. Again, we think this is a truly transformative medicine. In terms of what are we looking forward to in the future, it really is similar to what we've done in CF, which is continued innovation to try and improve on the technologies that we've got. We've disclosed previously that we're working on better conditioning regimens because clearly one of the challenges with this kind of procedure with the busulfan-based conditioning regimen is actually the vast majority of the adverse effects that you see are inherently due to the conditioning regimen, not due to the CRISPR-Cas9 gene editing and that process. And so clearly, if you can improve that, that wouldn't make the procedure...

Where are you with that conditioning?

We're continuing to make good progress. We really don't have much to disclose right now, but we are continuing to make good progress on that. And we'll, obviously, keep you and others updated, but that's clearly very important. And then in addition, which I think, to some extent, it's a little bit forgotten. We originally struck our agreement with CRISPR way back in 2015. It's because we were already all working on sickle cell disease as a disease and looking for other approaches to increase fetal hemoglobin. So we continue to do that as well. So without specifically commenting on what's going on externally, I think you can hopefully feel reassured that the lessons that we've learned from both our own experiences in HCV and what's happened to others in the industry is that we're in the innovation business. If you're in the innovation business, and you stop innovating, there's a good chance you're going to get made obsolete. So we are not going to let that happen. We are going to continue to serially innovate in sickle cell disease and beta thalassemia as we have in CF as we expect to do in all of the disease areas that we're working in.

Well, what is the innovation in sickle cell, beta thal look like? Would that be something different than an ex vivo approach or continuing...

Yes. So that there are other approaches that you could take. For instance, if you could develop an oral-based therapy that had the same impact in terms of rating in fetal globin then clearly that would be something which -- would close to be something which could potentially be attractive in places like the U.S. and EU, which have the infrastructure to be able to look at something like exa-cel. But we know there are many, many more patients in other parts of the world for whom a technology like that could be really life-changing and could fit into their health care infrastructure much more so than essentially what is a bone marrow transplant. So there's lots of areas where we could potentially innovate.

Interesting. And then just final question on this, like how big of a product do you think exa-cel can be? Can you give us some ballpark? I think investors are a little like ho-hum, I think they're a little bit not sure how big of a market that's going to be. On paper, it looks like it could be a big market, but we just talked about all the kind of headwinds that you'll be facing, right? So can you give us a sense of how you guys are viewing it?

Yes, yes, definitely not ho-hum, I'll tell you that. So let's just talk about the potentially eligible treatment population to start with. We estimate it's about 32,000 patients who would be potentially candidates for exa-cel based on the current busulfan-based conditioning regimen. And how do we get to that 32,000 number? That's essentially patients who are at the more severe end of the spectrum, the sorts of patients who are -- have been enrolled in our clinical trials, they are the sort of patients who are having multiple red blood cell transfusions a year, experiencing multiple VOCs a year. Of that 32,000, about 25,000 of those have sickle cell, the vast majority of those are here in the U.S. So we're not talking about hundreds of patients here. We're talking about tens of thousands of patients. So we do think this is a multibillion-dollar opportunity. What I think you've described or asked about is really what does the uptake rate look like for something like this? And I would definitely say we are not expecting it to be CF like. As you know, our CF uptake is virtually vertical. There's a lot of different reasons for that. We are not expecting the uptake rate to be like that in this particular population. As I've said, this is a significant commitment to the physician and particularly the patient is making to a lengthy procedure. They have to evaluate the benefit risk. Then obviously, it's something which requires scheduling, needs to fit into a patient's life, needs to fit into the treatment center's schedule. This is not something which is going to be, as I say, CF like in terms of its uptake. But in terms of where do we see it getting to overall, we do think given the very high unmet need, the benefit risk profile we're seeing with exa-cel, we do think this is a multibillion-dollar opportunity.

I know we're getting close to time, but I just wanted to touch on a couple of more programs very briefly. The AMKD program reminds me a little bit exa-cel in terms of you're kind of targeting this patient population maybe access with to the health care issues, but it is an oral therapy. So that's the good news. There are 100,000 patients you've talked about that kind of meet the description of patients that would be eligible for this kind of a treatment, meaning they have the genetic variance and they have proteinuria, right? But can you talk about like how many of those are identified of the 100,000? And how will you work to get more people identified?

It's a great question. So you're absolutely right. About 100,000 people is our estimate for patients in the U.S. and in the U.K. -- and in the EU, pardon me, or in Europe, I should say, who fit that definition that you described. In contrast, let's take CF, where the vast majority of patients are diagnosed, identified regularly visiting a physician. This is the polar opposite, both in terms of the number of patients who even know that they have kidney disease and even less, obviously, who have been genotyped and know that they are homozygous for the APOL1 mutation. Now that is particularly surprising. I think this mutation and it's linked to rapidly progressing kidney disease has only been learned for the last 10 years or so. There is no available therapy right now for which knowing the genotype would really help you. And so you can understand why the number of patients who've been tested for APOL1 is relatively small or is very, very small. So for sure, there is a significant market development, if I can call it that need to both have those patients diagnosed with kidney disease and have them tested for APOL1. So clearly, that's going to be a challenge that we need to address. We are at the beginning of addressing those challenges. Certainly, our clinical trial is driving awareness of the disease and APOL1. We have an ongoing genotyping study, which is looking to genotype patients of African-American ancestry for APOL1. And if they are found to be homozygous, then they have the option to consider enrolling in our clinical trial. We recently launched at ASN, a program with Alonzo Mourning, who is probably certainly here in the U.S., one of the most famous people with kidney disease in the whole of the U.S. He had FSGS. He's now a very, very committed disease and health care advocate. We've partnered with him, and we're partnering with others in the kidney community to raise awareness of the disease. So for sure, it is something that we need to work on. We've already begun that work.

Interesting. Okay. Pain, just wanted to quickly ask about pain and then we'll wrap it up. There's so much to dive into in your pipeline, but I'm just going to focus on the main drivers. So sometimes I get questions from people like, "pain, isn't that really deviating from their kind of core strategy?" Could you maybe explain why you think -- how pain kind of fits into your strategy?

Yes, yes, absolutely. So I think in many ways, you need to go back to our corporate strategy and our research strategy, and we think pain fits it beautifully. Why do I say that? Pain is certainly a very serious unmet need around the world. There have not been new pain therapies developed in decades, certainly not new classes of pain therapy. Reformulations and stuff like that saw no new pain classes. And certainly not ones that treat the underlying cause of pain. So our VX-548, which is a NaV1.8 inhibitor, we understand the human biology of pain. We understand NaV1.8 receptors and 1.7 receptors are quarterly linked to the creation of the pain signal and the transmission of the pain signal. That's been known for many, many years. What we've done here at Vertex is the team in San Diego has really -- and in our other research sites cracked the chemistry of how you actually interdict that target. And as you know, we have VX-150, which proved the concept. The inhibition of NaV1.8 can have a profound impact on pain across multiple different pain states. It just was not the right molecule to take forward to commercialization. We feel really good about VX-548. It's demonstrated that it works in acute pain, and we've advanced that into the Phase III program, which has already begun. So super exciting. The other question is, well, isn't pain -- pain isn't specialty. You said your strategy was to focus on specialty markets. So let me just break down the pain market for you. The way we think about pain market, there is acute pain. Obviously, that's short-term pain, multiple different kind of etiologies or causes. There is a neuropathic pain, which is obviously a type of chronic pain where nerve involvement is the cause of that pain. And then there's the broader chronic inflammatory lower back pain, osteoarthritis knee pain. That third segment is clearly a very, very large number of people but is largely served through primary care. And so that will not be an area of focus for us right now. We are focused on acute pain and neuropathic pain. With 548, we're in Phase III for acute pain. We're starting our Phase II program in neuropathic pain with VX-548 this year. So why do we say acute pain is a specialty market? Let me just dimensionalize the market. For acute pain, there are about 1.5 billion treatment days of pain meds prescribed for acute pain in the U.S. alone. And despite 90-plus percent of those prescriptions being generic, the market today is valued at $4 billion. That's the market today at generic pricing. So we think if we could bring forward a novel, effective pain med without the adverse effects of some of the other pain medicines used in acute pain and that's priced at a branded price, we think VX-548 in acute pain alone is a multibillion-dollar opportunity. So then the real question is, is it specialty? Of those 1.5 billion treatment days, the vast majority of that, 2/3 of that is actually instigated in the hospital setting. It's either used for acute pain when somebody is in the hospital, potentially postsurgery, or it's prescribed as discharge for follow-up pain treatment. That's 2/3 of the business. We can get to fully 2/3 by focusing on the hospital segment. And even within the hospital segment, it's concentrated. We believe we can get to that with the specialty sales and marketing infrastructure. Now it may not be the 16 representatives we have in CF, Liisa. But it is not going to be thousands and thousands of representatives. It will be a specialty sales and marketing infrastructure. That's acute pain. Neuropathic pain represents a very, very -- also a very, very significant multibillion-dollar opportunity as well. The market dynamics there are slightly different. The standards of care are different. Now in terms of the size of the current market, it's also very, very substantial. And again, that is almost all genericized if we bring forward, again, a truly effective medicine which doesn't have the adverse effects and side effects of some of the existing standards of care. We think both of those are very, very significant commercial opportunities. The vast majority of neuropathic pain is dealt with by neurologist, again, a specialty segment that we can serve with a specialty sales and marketing infrastructure. So we feel pain fits our corporate and research strategy [ to it ].

I've often thought this was kind of the biggest opportunity in the pipeline. Do you agree with that?

That's like saying, what's your favorite child. So we have many different -- it's certainly a very significant opportunity, but then again, so is type 1 diabetes where there's 2.5 million patients...

Got it. But now you're going to be able to get to that, but I love that program.

That we could serve. So we have many, many multibillion-dollar opportunities outside of our work in CF. Again, that kind of goes back to my opening comments. We've been working on this strategy for a number of years, Liisa. It is playing out, I think, right before our eyes, but that's why I think we are at this very, very important inflection point for the company as we continue to execute in CF, bring forward this really, really exciting pipeline, much of what is in late stage, all of which has multibillion-dollar potential. It's just a really exciting time.

Okay. Just in closing, if you could summarize the catalyst for 2023 for Vertex.

Yes. So we'll be saying more about that at JPMorgan. As is our habit, Liisa, we kind of present kind of our scorecard, if you like, the things that we can anticipate...

You don't want to preview it here?

So I won't do that. What I'll tell you is we have a lot of good news, I think, between now and the end of the year. And what do I mean by that? As I said, we are planning complete our filings for the Europe and the U.K. for exa-cel and begin our rolling submission in the U.S. for exa-cel. Our IND for our mRNA program. That's going to be incredibly exciting. We're planning to submit our IND for our cells plus device program in type 1 diabetes. So this is the same cells that we've shown data on with VX-880 encapsulated in our proprietary delivery device. That's an incredibly exciting program, which unfortunately, we haven't had time to talk about. Plus, we're going to be filing for instance, for TRIKAFTA in 2- to 5-year-olds. As I said, our work in CF is not done, and we anticipate completing enrollment in the vanzacaftor triple combination program. So I want to talk about everything we're anticipating for 2023, but even in 2022, we think we've got a lot of work to do between now and the end of the year.

Okay. Well, listen, it's been great to catch up with you, Stuart. I really appreciate the time today. No runover, but, gosh, I didn't even touch upon some of the other things like DMD program, which maybe we'll find out about next year. We'll hold our breath for the beginning of January. Anyway, okay, thank you very much for the time. Thank you, everyone, for bearing with us as we dive into everything and have a good rest of your day. Thanks.

Bye, Liisa.