Vertex Pharmaceuticals Incorporated ($VRTX)

Welcome, everyone, to our session with Vertex. It's very much my pleasure to welcome members of the leadership team on the screen, if you're in the room, Duncan has been retitled as CSO. I guess that's in the wake of the positive pove data, trying to take credit for that.

Yes, hopefully.

So he's out of a title. But to my immediate left is Charlie Wagner, company's COO and CFO; and Duncan McKechnie is to his left, Chief Commercial Officer; and Susie Lisa, Senior Vice President of Investor Relations to Duncan's left.

So thank you very much for being here. Great timing. Thanks for issuing the press release last night I had a conference...

It's for you, it's for you, yes.

So why don't we start with pove? It would be great to hear -- how you view the data, and then we'll go from there.

If you don't mind, I'd like to make just a couple of general remarks, too...

Please.

And then we will, of course, dive into that. Anyways, thank you for hosting us this year. We came into 2026 with four primary goals for the company: one, to extend our leadership in CF; two, to accelerate our commercial diversification, particularly with JOURNAVX and CASGEVY; three, to advance our broad and deep pipeline, which has 5 Phase IIIs ongoing right now; and four, to deliver consistent and attractive financial results while we scale the company for the future. We are, I think, off to a very good start relative to that. We gave guidance for the year -- revenue guidance of $12.95 billion to $13.1 billion, which implies 8% to 9% growth. We said that, that would include at least $500 million of revenue from non-CF products, so JOURNAVX and CASGEVY, which would be a significant acceleration in 2026 over 2025, and we can talk about some of those metrics. But of course, one of the key things that we're doing this year is advancing the pipeline. As I mentioned, we have 5 Phase IIIs ongoing in AMKD, type 1 diabetes, DPN, and two with pove, one in pMN and one in IgAN. Of course, I mentioned that last because last night, we issued a press release on the results of pove in IgAN. There was a 36-week interim analysis. I would say the data are remarkable, and it was a clean sweep across the endpoints for efficacy as well as the safety profile for pove. And if I could just headline it, we showed statistically significant and very clinically meaningful efficacy results -- on all primary and secondary endpoints for efficacy and the safety profile was very attractive. Drilling down into the efficacy data. The primary endpoint was UPCR reading at 36 weeks. We showed a 52% reduction in UPCR relative to baseline, a 50% reduction relative to placebo, very consistent with what we saw at 36 weeks in the Phase II results, very strong data overall. On the secondary endpoints, we saw a 77% reduction in Gd-IgA1 antibodies. And we -- for patients with hematuria, we saw an 85% resolution rate in hematuria. So fantastic results overall. The profile was very rapid, very deep and very durable response across all subgroups. We provided data so that you could see the efficacy results in the patient population by age, by gender, by race, by geography and across all of those dimensions, the clinical data, the efficacy data was statistically significant and very clinically meaningful. On safety, there were no SAEs related to pove. There were no deaths in the trial. There were no unusual or opportunistic infections. There were no discontinuations in the trial due to infection. So overall, a really attractive safety profile as well and one that gives us confidence to move forward. On that point, we had previously said we would expect to submit the filing in the first half of 2026. We've now pulled that in. We've accelerated it, and we expect to submit by the end of this month, which should put us on track, hopefully, for a commercial launch in the not-too-distant future. So as far as the year goes, I think we're confident we're off to a great start. And certainly, the pove data last night punctuates certainly what we are hoping to see in the pipeline.

Excellent. Congrats on that. So could you just go into a little bit more on safety and what you've -- I mean, you highlighted it, but any additional details you can provide and also discuss when we will expect to -- or when we should expect to see additional disclosures?

Yes. Listen, like I said, the safety data was excellent. I think importantly, with no discontinuations in the trial due to infection tells you a lot. The rate of infection -- rate of serious infection in the trial was very low, and it was very similar between the placebo arm and the pove arm at 0.5% for serious infections. So overall, quite low and again, no discontinuations. So overall, we feel great there. In terms of additional data, we will provide additional data through publication and congresses in the future. Though some of that data we can't release until the trial itself is completed. And so that will be -- we'll release additional data at the appropriate time in the future.

And with respect to benchmarking data versus competitors, so your data was at week 36. I believe the Otsuka data that's in the label is at a slightly later time point. Could you just discuss that as well?

Yes. Our data is week 36. Their data is week 40. So ours was 9 doses, theirs was 10. I think you could see in our Phase II data that there was improvement -- further reduction in UPCR beyond 36 weeks. We don't have that measurement here in the Phase III. But again, with the 52% reduction at 36 weeks for pove tells you that there was a very rapid and strong response. You would expect that, that would continue over time. But again, we won't have the data on that to publish at this time.

Dave, if I could just add that on the Otsuka data, their secondary endpoints were actually at 48 weeks, so an even longer duration than all of ours, we're at 36 weeks. And I think to contextualize the strong efficacy data that we had, you should also note that it had the highest rates of patients on background therapy in terms of almost 100%, I think 98% on ACEs and ARBs, and 67%, 66% on SLGT2 inhibitors (sic) [ SGLT2 inhibitors ] ...

For our trial...

Yes, for our trial, yes. As well as we think it's very much a real-world population, given it was almost 4 years, right, from diagnosis to enrollment in the study, it was 3.8.

Excellent. Great. Well, I know we have a lot of ground to cover. So why don't we pivot to -- I guess, just a little bit at the higher level, and then we'll go into some of the franchises. So with respect to the growth prospects for the company, could you just talk about the top line outlook as you see it going forward and then the margin outlook as you reinvest?

Yes. We don't give long-term guidance, but I think I can provide some context. Obviously, two of the four goals that I mentioned to start 2026 have to do with the growth, and it's extending our leadership in CF and accelerating our commercial diversification. CF continues to grow. We continue to reach more patients. The ALYFTREK launch is ongoing in the U.S. We now have several launches ongoing outside the U.S. We continue to reach patients in younger age groups. We continue to reach patients in new geographies. And so I expect in 2026 to see healthy growth in CF, and I expect that to continue beyond 2026 as well -- I would say '26 and more meaningfully beyond. With CASGEVY, you saw we had a very strong fourth quarter. In 2026, we expect continued growth in patient initiations for cell collections infusions. In JOURNAVX, we had a very strong year in 2025 with 500,000 prescriptions. We said in our guidance that we expect that number to triple in 2026. And the revenue conversion on those prescriptions will be greater because we've done so well with our coverage goals, and we now have roughly 200 million lives covered for JOURNAVX. So CASGEVY and JOURNAVX, both are on -- at a nice inflection point. And we believe that both of them are going to be multibillion-dollar businesses over time. And you think about that in addition to the growth in CF. We just announced the pove data in IgAN. I think that clearly is a multibillion-dollar opportunity just in IgAN alone. We've got the Phase III ongoing in pMN. So if you look out 2, 3, 5 years, pick your time frame, I would fully expect that we've continued our leadership in CF with growth there. And then we have multiple multibillion-dollar franchises on top of that, allowing for commercial diversification. The second probability of success in generating revenue in the near term. So we're investing in the 5 Phase IIIs that we have ongoing. We're investing in building the commercial organization for CASGEVY, for JOURNAVX and for pove. Those investments are appropriate and will deliver growth in the next couple of years. And so even with the investment, though, we've been able to maintain operating margins in the low to mid-40s, which is super attractive, and we'll continue to manage both the investment and the operating margin in a way that's going to deliver value over the long term. So particularly as these non-CF businesses scale and become multibillion-dollar businesses, that's going to be very attractive and accretive to our profitability.

Excellent. And when you said multibillion for JOURNAVX, what is your assumption that you're including for DPN?

In the statement I just made, I'm honestly just talking about acute. And so obviously, DPN is a separate multibillion-dollar opportunity, but we'll wait to talk about that until we see the Phase III results in late this year, early next year, early next year.

Okay. Great. And so -- maybe we could just touch on ALYFTREK first, and then we'll come back to JOURNAVX. So Duncan, could you comment on the conversion and the prospects for conversion going forward?

Yes, I can. If you don't mind, Dave, before that, I'll just make a couple of other comments on pove...

Please.

And IgAN as the commercial guy. Just to reinforce the point, this is genuinely remarkable data that we saw on pove this week. We are incredibly excited about the profile of the product because we really do believe it has best-in-class potential when you combine 3 things. Firstly, the superb efficacy and safety data that we saw in the data set this week. Secondly, when you add to that, the dosing administration advantages that we believe povetacicept has. So as you know, it's dosed once a month. It's a low-volume dose. It's with an easy-to-use at-home auto-injector, which we think has a very differentiated profile in the market. And we've seen many times over both in the biologics market, but also in our recent engagements and market research with physicians, nephrologists, how important dosing administration is to them. And then third and finally, of course, we'll be looking at other indications for povetacicept that are relevant to the nephrology community like the ongoing study in pMN. So we really do think that this has set us up very, very nicely for potential best-in-class positioning for pove. And I do think what Susie said is incredibly important. These were very well-treated patients who've been diagnosed or had their biopsy up to 4 years prior to coming into the study, and yet we still saw these incredible results on top of that. So I just wanted to add from a commercial perspective that we are incredibly excited about pove. And as you know, we've been gearing up for this launch since the middle of last year. So we are well underway in terms of our launch planning.

And so before you...

I was going to go then to the ALYFTREK...

Since you're commenting on pove, I'll just ask a few more on that because obviously, there is.

Sure.

A lot of interest there. So could you just comment on how you see the relative safety profile as well? What your view is at this point? And then just talk about when you think about commercializing pove, how much will it matter from a messaging standpoint that you have a dual-acting agent versus a single mechanism? And how do you think that will resonate?

Okay. So as far as the safety profile is concerned, we feel very, very good about what we saw in the study. So the vast majority of the adverse events were mild to moderate adverse events. There were no serious adverse events related to povetacicept. There were no discontinuations related to povetacicept for any adverse event, including infections. So we feel very, very good about the safety profile on the infection front, as Charlie alluded to, there were no opportunistic or unusual infections. And where there were serious infections, it was at 0.5% for both pove and placebo. So we feel really, really good, frankly, about the safety profile. To answer your second question in terms of the mechanism of action and the dual mechanism of action, it's important insofar as mechanism of action is important to physicians.

True.

And simply how you think about the, A, in BAFF is activating, the P in APRIL is proliferating. So if you want to treat a disease, you'd like to stop the activation and stop the proliferation. And of course, that's exactly what pove does. So we think from a mechanism of action point of view, that is important versus just doing one or the other. And certainly, in the engagements we've had with nephrologists and in the market research we've done, the dual mechanism of action is definitely seen as an advantage by nephrologists, and they would prefer to use something with a dual mechanism of action versus one with only a single mechanism of action. Having said that, it's also true to say that mechanism of action is only ever part of the story with physicians. You can have a great mechanism of action, but you have to back it up with clinical data, dosing and administration, market access, ease of use for the product, quality patient support programs as well. So I think the duality is important in the realm of mechanism of action, but that's certainly not the only pillar of the story that I think leads you to believe that pove is best in -- has best-in-class potential.

I think just one more thing to add, too, in terms of that dual mechanism, it clearly shows up in the [indiscernible] that we provided in the press release, right, the consistency of the results across race, across region, across any of the subgroups, right? You don't see -- everything is way far to the left.

Excellent. And then with respect to the 48-week data, that will probably come shortly after the approval based upon the filing clock that you've outlined. Is that correct? Is that the right way to think about it?

I think that is correct.

It's -- so 36 weeks is the interim analysis. The full -- the final study is a 2-year study.

104...

Yes. 104 weeks. Yes.

And how will you or will you be disclosing 48-week data then early next year? Because I think the -- if I'm right, the enrollment completed in November of last year...

2025...

How should we think about that potential future disclosures?

No. I mean -- so we've published the data on the interim analysis. We feel that's going to support an accelerated approval and then the trial will run to its primary endpoint around eGFR stabilization at 104 weeks.

Got it. Okay. Thank you.

Yes. And we're feeling very confident about the data that we have based on 36 weeks in the label and being able to launch the product with those data. I mean the key point -- one of the key points that Charlie alluded to is from a nephrologist point of view, they think of eGFR to understand where the patient is at and proteinuria to understand where the patient is going. And so the fact that we had very rapid, very deep and sustained impact on proteinuria and indeed the other efficacy endpoints as well is incredibly important from a nephrology community, and we'll be able to show those data to nephrologists, assuming we get regulatory approval.

Excellent. ALYFTREK?

Yes, ALYFTREK. So we're very happy with the progress that we're making both here in the U.S. and in Europe on ALYFTREK. We continue to see patients transition from TRIKAFTA to ALYFTREK, and I think you can expect to see that transition continuing to occur both here in the U.S. and ex U.S. for the balance of this year. I don't have any particularly new news for you on that, Dave. We expect to see the transitions continue, and we continue to hear incredibly positive physician and patient feedback on their clinical experience with ALYFTREK. So we're very happy with how it's going.

Excellent. And congrats on the recent JOURNAVX Phase IV results. Could you talk about those and why they may be more impactful than first meets the eye for the investment community?

Yes, sure. So to step back a little bit, we conducted 2 Phase IV studies. I think we communicated really top line data on them in the earnings call. We presented the first of those studies at the AAPM meeting last week, and that study was aesthetic and reconstructive surgeries. And I'll come back to the data in a second. The second study is arthroscopic and laparoscopic procedures, and those data will be presented at an upcoming medical meeting in the next, let's say, 4 to 6 weeks or so, so relatively near term. Both of the studies had a relatively similar study design. So suzetrigine was given preoperatively and then given, obviously, postoperatively as well. And in the data presented at the AAPM last week, which again was the aesthetic and reconstructive surgery data, we saw -- the primary endpoint was patient satisfaction with treatment that came out at just above 90%, satisfaction with treatment. So they were super happy with how their pain was managed, which essentially was JOURNAVX with multimodal treatment with ibuprofen or Tylenol, but then opioids generally reserved as rescue medication. The key endpoint that we were particularly interested in and the physician community is particularly interested in is how many patients needed that opioid rescue. And the answer to that is that 90% of them were able to treat -- complete their 14 months' worth of treatment -- 14, no months, 14 days worth of treatment without the need for using an opioid. So 90% of them were essentially opioid-free. If you look at historic data for those procedures and how many patients are opioid-free, normally without the presence of JOURNAVX, it's about 10% of them. So it's almost reversed the numbers from 10% being opioid-free to 90% being opioid-free as a result of using JOURNAVX. So we're super happy about those data. And they are very compelling to physicians because as you alluded to in your question, they're a little bit more real -- it's a little bit more real-world use of suzetrigine rather than perhaps the studies that we did for regulatory approval. And we saw relatively similar data in the arthroscopic and laparoscopic procedures as well, where, again, just over 75% of the patients were opioid-free over 14 days, which compares very, very favorably with the amount of opioids that would usually be used in those types of procedures. So very happy with the data. And as you say, it's very relevant to physicians because it's a bit more real-world evidence for them.

Excellent. And congrats on the exceptional progress with coverage at over 200 million lives. Could you comment on the outlook or the prospects for potential Medicare coverage?

Yes, of course. So we're very happy with securing the third PBM towards the end of last year. So we now have over 200 million lives covered, and they are actual lives covered. And we're also making great progress in Medicaid as well, 21 states also passing legislation to support the use of non-opioid treatments. And as far as Medicare is concerned, we are engaging closely with the 4 main players in the Medicare arena and are looking forward to making progress with them over the balance of 2026. So we feel good about securing Medicare coverage. It is, I would say, relatively common place for commercial coverage to precede Medicare coverage, not least because Medicare coverage is driven by bid cycles. So you either submit into the bid cycles, which are actually happening right now and/or you seek to break the bid cycle, which we are essentially doing both of those concurrently at the moment.

Excellent.

And I would add that patients on Medicare do have access to JOURNAVX through our patient support program...

Yes.

So we had started the patient support program last year as a bridge to coverage for patients. Obviously, the patient support program has sunsetted with commercial payers where we have coverage. It continues for Medicare patients until we have coverage there.

Got it. Okay. That's very helpful. And then just looking ahead to future JOURNAVX and VX-993 readouts. Could you just walk us through the time line?

Yes. I think what we've communicated is we have two Phase III programs with JOURNAVX in DPN. We've communicated that we're intending to complete enrollment of those two studies by the end of this year. Essentially, we've accelerated the second study in order to complete enrollment broadly speaking, the same time. So we see data at a similar point in time. As you say, there is also the 993 DPN study that is ongoing. We've prioritized this as suzetrigine one, though, I would say, ones that I would say ahead of that. And then the other comment I'd make, Dave, is we also continue to make progress importantly on the NaV1.7 program as well, which we're very focused on.

Any other comments on that?

It is in late preclinical as we have previously communicated, and no further comments.

Maybe we could go back to the CF franchise. So with respect to VX-828, which Reshma had described as 3.0 opportunity for the company. She's actually sort of given some mixed messages. So she said that it looks better than ALYFTREK in vitro, but also said that it's getting really, really, really hard to improve upon ALYFTREK. So could you put that into context?

Sure. Yes. I mean, listen, both things can be true. TRIKAFTA and ALYFTREK are fantastic medicines with hundreds of thousands of years of real-world evidence and patient benefit, both on ppFEV1, sweat chloride and other measures. So they are fantastic medicines. That means the bar for us or anybody else is extraordinarily high. That said, I open by saying our -- one of our four primary goals is to extend our already significant leadership in CF. And so we do strive to do better than our own medicines. 828 preclinically does look very interesting, and we think has the potential to do even better on sweat chloride, but that's the bar that we're going to need to clear. So we'll look forward to that data this year, behind 828 or in addition to 828, we have other molecules as well that we're working on because we continue to strive for our goal to reach all patients and bring those who are eligible for CFTR modulators to carrier levels of sweat chloride. So it's an ambitious goal, particularly with the high standards set by ALYFTREK and TRIKAFTA. But if anyone is going to clear that hurdle, it's going to be us.

And what's the timing for seeing that 828 -- it's Phase Ib data, correct?

We said this year, yes...

This year, second half.

Yes, second half.

Okay. All right. Very good. And maybe we could just pivot to CASGEVY. If you could just highlight how you see the hockey stick ahead?

Yes. We are very pleased, as Charlie alluded to earlier, with the progress we made on CASGEVY in 2025, particularly the results we saw in quarter 4. So over 300 patients starting the journey, 150 or so patients, cell collections, as you know, 64 patients infused. We've continued to see that progress into 2026. So we're very pleased with the progress we're making with CASGEVY. And because it's a relatively long treatment journey, of course, we have a pretty clear line of sight in terms of revenue accomplishment in 2026. So very pleased with the progress. I would, though, remind you that quarter-by-quarter, because the patients choose when they want to get infused, that can create -- while the numbers are still relatively small, that can create some volatility around the quarterly coverage. For example, I know there's 2 patients last week who we've made their dose. We've got it ready for them. And they said that's absolutely awesome, but we'd like to do it over the summer while we're on summer vacation. So these things do influence the quarterly numbers. But overall, we feel very pleased with the progress on CASGEVY.

Excellent. Well, we are over time. So I think we need to wrap it up there. Thanks so much for being with us here today. Really appreciate it.

Yes, thanks for hosting.

Thank you very much. Thank you.