Vertex Pharmaceuticals Incorporated (VRTX) Earnings Call Transcript & Summary

Welcome, everyone, to day 2 of the Bank of America London Healthcare Conference. I'm Dan Lundquist. I'm the health care specialist over in New York. I'm very pleased to have Susie Lisa, Senior Vice President of Investor Relations with me from Vertex. A lot to talk about, Susie, not to mention saying yesterday, you had me change up all my questions. But maybe we'll start with just an intro. Can you give us an overview, anything that you want to flag today with the commercial franchise, key upcoming milestones for the maturing kidney and endocrinology franchises, and then we'll launch into some questions on the products.

Sure. Thanks for having me, Dan. Thanks for being here. And I think it is a really exciting time at Vertex with a lot of commercial progress and momentum. We call this a year of execution for us, and then an exciting lineup of upcoming catalysts in terms of data. So maybe first up, I'd talk about is that we see continued expansion of our leadership in CF, and it's been an exciting year there and continue to see good progress with our switch to ALYFTREK and development of our NextGen 3.0 family. On CASGEVY, really good commercial progress and seeing nice 3 quarters straight now of 100 or more patient initiations and good progress in the ultimate number of infusions and recent label expansion down to ages 2 and up. And then for JOURNAVX, I think on acute pain, we remain very excited and on track for tripling our prescriptions this year versus -- in 2026 versus 2025. And in terms of upcoming catalysts there on the chronic pain side of things, in peripheral neuropathic pain, we remain on track for our 2 Phase III diabetic peripheral neuropathy studies to complete enrollment by the end of this year. They are 12-week studies. We haven't given definitive time lines, but I think that would put you at least roughly midyear, mid-'27 for data from diabetic peripheral neuropathy, the 2 Phase IIIs there. Then moving to our next commercial area now, which is Crinetics and the rare endocrine space. I think very pleased with the uptake of PALSONIFY thus far. And we called that a blockbuster opportunity. And then we see multibillion in sales opportunities from Atumelnant, where we haven't given updates on timing in terms of completing the Phase III enrollment in congenital adult adrenal hyperplasia in adult or pediatric, but look for us to do that likely on our third quarter call, November 2, we'll update time lines there. And then in terms of one of the biggest upcoming catalysts is in the renal area, we have the November 30 PDUFA date for Pove in immunoglobulin A nephropathy, or IgAN, that remains on track and pleased with the progress there for November 30. And then with inaxaplin, we just had our AMPLIFIED Phase II proof of concept, if you will, patient expansion population study that -- the results were yesterday and then remain on track for Q1 of '27 for you to see the Phase III interim analysis results. We also were excited to announce yesterday that we completed enrollment of that Phase III AMPLITUDE study. And then in terms of other catalysts before year-end, in the myotonic dystrophy type 1 space, you'll see proof-of-concept data from VX-670 from us. And we've talked about seeing initial data from sort of the first in the NextGen 3.0 CF family, 828.

Great. So maybe just digging back into inaxaplin. What were the key takeaways from the Phase II data you reported yesterday from the AMPLIFIED study?

Yes. I think really excited about the results and to see the consistency and the magnitude and the reduction of proteinuria. So we reported UACR, which is albumin, which is the endpoint for this type of trial, but I'll do the conversion to UPCR because I think particularly with IgAN, that's how everyone is used to talking. So in Cohort 1, which just to remind folks was you have 2 APOL1 alleles and then a more modest level of proteinuria than in the AMPLITUDE Phase III study. So in AMPLITUDE, you're 0.7 and above. In AMPLIFIED, you could be in the 0.2 to 0.7 range. And so the proof of concept of the expansion here was, could you get that sort of proteinuria reduction with less dynamic range starting from a lower baseline, right? And we did see that. So the UACR reduction was 42.7%. That converts to 44.7% proteinuria reduction at just 13 weeks. And so that's very consistent with the Phase IIa, we saw from AMPLITUDE, which was in just an FSGS population. So this was less severe proteinuria and minority FSGS population. And so I think very encouraging and exciting results to us there. Similarly, while not a strong reduction in Cohort 2, so 2 APOL1 alleles as well as type 2 diabetes. The UACR reduction was 17.3%. That converts to UPCR reduction of 25.4%. So I think getting into that mid-20% level, again, at just 13 weeks is exciting, promising as well, not as much reduction because clearly, we know we're inhibiting APOL1, but we are not acting on their type 2 diabetes, which is also impairing kidney function. But I think a really encouraging, exciting result. And now we're looking forward to the interim analysis from AMPLITUDE on the Phase III and then going to FDA with the -- having a discussion in the context of the AMPLITUDE results about AMPLIFIED and seeing where things go from here.

And maybe can you provide any color on the safety profile? I know that there were 5 people who had some AEs of transaminase elevations. Just any thoughts on that, and whether it's a source of concern?

Yes. So I think important to recognize that overall, there were no SAEs. SAEs related to inaxaplin and no liver SAEs. We did see the 5 patients with transaminase elevations, as you said. They were all isolated, asymptomatic and they all resolved, but you did see 2 discontinuations of these patients, 2 in each cohort. And so I think that, again, the important thing is that they all resolved, but you did see 2 in each cohort discontinue. I think not uncommon or surprising necessarily in small molecule drug development. We certainly have experience and have seen this in CF. And I think, obviously, AMPLITUDE, the much larger study will be sort of the definitive safety outlook. But I think we're pleased with the outlook, a small study and some small numbers. But again, back to the resolution and no SAEs encouraging to us, otherwise, well tolerated.

And how are you thinking about potential next steps in these specific subgroups? You alluded to the AMPLITUDE study will read out next year. It's a much broader population, a much bigger study. Just how are you thinking about these 2 populations?

Yes. So if I might parse words a bit, right, it is a narrower population in some ways, a bigger study, narrow population. So for AMPLITUDE, it is 2 APOL1 alleles and again, that severe proteinuria at 0.7 or above. I think with the results from AMPLIFIED getting from 0.2 to 0.7 and seeing very consistent results, at least on a Phase II basis, that's encouraging to us. And if you think about the patient population, it doesn't line up exactly with AMPLITUDE or AMPLIFIED, but broadly speaking, 2 APOL1 alleles and no comorbidities. We view that as 150,000 patients. The vast majority of those are in the U.S., probably 80% or so. And a majority of them, we would say, are in the severe, that 0.7 or above. And then if you take people with 2 APOL1 alleles, kidney disease and some sort of comorbidities, whether it's diabetes or HIV, et cetera, that adds another 100,000 patients. So getting to 250,000 total.

Got it. Okay. And how are you thinking about the competitive positioning in AMKD vis-a-vis some of what else is out there from a molecule standpoint?

Yes. I think that we're clearly sort of years ahead with Phase III interim analysis data early next year. And if the data are supportive, we'll move to filing as quickly as possible. And I think you have seen some other data in the field, but very heterogeneous populations unlike very narrowly defined populations that we think you can draw clear conclusions from. And we'll wait and see how the landscape develops. But I think particularly you can add to the excitement we have in renal broadly, right? Pove in IgAN will be our first commercial launch, but then to follow up quickly potentially with inaxaplin, I think, will be exciting, and it's helping us kind of carve out a leadership space in disease-modifying therapies in renal, which is an area that's had sort of repurposed cardiovascular meds for a long time. So a lot of excitement and buzz around what we're doing because recall after that, you also have Pove being studied in primary membranous nephropathy. And then we have another compound in -- also in a Phase II study that's completed enrollment called the AGLOW study, and that's for autosomal dominant polycystic kidney disease, which is another 330,000 patients. So large rare diseases, rare disease populations. And I think really trying to carve out a leadership position with novel disease-modifying therapies.

Maybe one last one for me on inaxaplin. Can you just help us think about what would be good data for AMPLITUDE's interim next year? Just help me frame some of the expectations.

We haven't given a bogey and recall the endpoint here, although the PARASOL meeting is happening today, I believe, right? The endpoint here for accelerated approval is the slope of eGFR. So it's a controlled study where you have inaxaplin on top of standard of care and then placebo on top of standard of care. And I should have mentioned that on AMPLIFIED, very high levels of background therapy, sort of well-treated patients with ACEs, ARBs, SGLT2s and GLP-1s for the diabetics. And so it is a 48-week endpoint of eGFR slope and essentially separation of the curve. So we haven't given a bogey there. But I think with the 47.6% reduction you saw in the Phase IIa at 13 weeks, now with what you've seen in the more modest proteinuria arm, I think we feel confident that, that type of proteinuria reduction at 13 weeks will translate to a change in the slope or starting to approach stabilization, particularly compared to placebo because these patients progress at twice the rate in terms of the deterioration of their eGFR versus sort of traditional kidney diseases. We'll also report out UPCR for AMPLITUDE, but the FDA endpoint for accelerated approval is the eGFR slope.

Great. So maybe sticking with renal, we'll shift to Pove. So you mentioned the PDUFA on November 30, very exciting opportunity would be your first renal launch. Can you just frame the competitive dynamics? You have 2 therapies that are already approved, both of which have been off to a good start. Just trying to help kind of think about the initial launch opportunity again.

Yes. I think that they have been off to a good start. We're excited to see that. I think it speaks to the unmet need, right? IgAN patients are biopsy diagnosed. They're typically pretty young in their 40s and otherwise healthy and sort of in these ticking time bombs, waiting to see how fast they progress. So I think that speaks to the early launch. But even with that, it still leaves, I don't know, 159,000 patients in the U.S. to go after. Again, it's a rare disease, but a pretty relatively large rare disease population. And we're excited to come to market with what we think is sort of the perfect trifecta of differentiation. So more to come in terms of data, but believe we have potential for best-in-class in terms of efficacy. Recall, we had just 36 weeks in our interim analysis compared to peers that were at 40 weeks and really, I think, looked best or near best in terms of proteinuria reduction, hematuria resolution as well as Gd-IgA1 reduction and the percentage of patients getting to KDIGO guidelines. I think a good safety profile. And then the third pillar of our trifecta is, we believe, clear differentiation in terms of patient administration characteristics. So we are monthly or every 4-week dosing with very small volume, 0.46 ml, and it's an auto-injector, and that compares to one peer who is a weekly injection and one peer who is monthly, but it is closer to 2 mls, which gets more painful, and it's prefilled syringe, which requires more dexterity. So I think in this type of chronic disease, as we've seen in other areas, right, patient convenience, adherence, compliance, all of that does matter. So obviously, a big focus on the patients who are yet on drug, a large opportunity, but we'll go after switchers as well and certainly aim to have a really commanding market share over time.

And in terms of what's driving physician choice, what do you think that the key aspects they're going to account -- take into account when deciding to prescribe Pove?

Yes. I think certainly, patient adherence and compliance, that will be part of it. But I do think that if this is a chronic therapy, you hear some people say stable is stable in terms of eGFR. Our view is that if you can get more proteinuria reduction, no one wants protein in the urine or physicians don't want their patients to have it, no one wants blood in their urine. And if you're taking this every year and you're getting a percentage point or 2 more in proteinuria reduction, that's compounding over time. And so our belief is that you will see efficacy as a key driver as well as the patient convenience aspect in terms of driving physician and patient choice.

And maybe shifting a little bit to the pre-commercial activities and commercial activities, how is your sales force planning to detail the product in IgAN? Do you expect that this sales force build-out will allow you to support multiple launches in nephrology?

Yes, yes. So the investment in the renal sales force is -- we have made the vast majority of that this year. We sort of had headquarter corporate types a year ago and then have fully built out our sales force. Very pleased to see the vast majority of them have prior nephrology experience, I think because they're excited about the profile of Pove as well as the pipeline behind that. And sort of, again, this space in renal, the halo effect that we'll be able to carve out. They are launch ready. We've been having payer discussions for over a year now as well. And I think ready to go and also excited about Pove's pipeline and the product potential, thinking about physicians who are saying, well, if I get to know the ins and outs of Pove, then potentially I can treat both my IgAN and my PMN patients as well as many of them do know us from our ongoing AMKD work, too. So...

And maybe just kind of thinking about the long-term relevance of eGFR changes for IgAN. So we've been seeing a stabilization across the board. Any thoughts about how important that metric is as it relates to the field?

Certainly, it is critical, but I also think that there is well understood now continued base of evidence, right, that UPCR reduction highly correlates to eGFR stabilization. And in addition, I think it's important to think that eGFR stabilization is in itself a proxy for time to end-stage renal disease and delaying the onset of need for death dialysis or not need but delaying the onset to dialysis or need for transplant or potentially death. So I think well understood of the correlation there. I think having the ultimate 1- or 2-year eGFR data is important, but I think that it won't hinder us in our launch that we won't have that eGFR data because of the magnitude of our proteinuria reduction as well as the other parameters I mentioned like hematuria, Gd-IgA1 and getting people to guidelines.

And do you think -- are you planning to report the full 2-year eGFR data? Or do you think you could take an earlier look perhaps to secure the traditional approval?

I'd say that's still a TBD. We are looking at the Pove opportunity as in the entire global opportunity. And although it is significant in the U.S. with 150,000, 160,000 patients and similar size in Europe, there are even more patients in Asia. And we think the total global population is north of 1.5 million, maybe 1.6 million patients. And we are not focused just domestically, but looking at the global opportunity and regulators outside the U.S., whereas the FDA has made it clear they'll take a 1-year eGFR endpoint, regulators in other regions will not at this point. So we are looking at the entire global opportunity, and I'd say more to come in terms of where our strategy ultimately lands.

And you mentioned PMN in the broader conversation about the Pove opportunity. How does IgAN derisk PMN in your view? And how do you think about the size of that opportunity over time?

Yes. I think that with the dual BAFF + APRIL inhibition, our mechanism of action, right? The autoantibody that you look at there is Gd-IgA1 in IgAN. It's PLA2R in PMN. And I think that's where you could see potentially even more compelling data from our RUBY-3 Phase II, the basket study that we did. So I think, again, this gets back to sort of how Vertex likes to operate in terms of understanding the causal biology and having validated biomarkers and sort of what you measure in Phase II is what you measure in Phase III, and you can derisk your going from proof of concept to a Phase III study. So we're excited about PMN. There's no pathway to accelerated approval there. It's a 104-week study. We moved from -- it's a combo Phase II/III, and we moved into Phase III, chose the dose from Phase II and moved into Phase III earlier this year, continue to enroll and dose patients. And it's a significant opportunity as well. But I think the ultimate patient size is -- I'd have to go back and check, but I think it's probably something closer to maybe 150,000 patients between U.S. and Europe, so maybe half the size of IgAN and a little smaller, but also a significant global opportunity as well.

And what gives you confidence in potential for Pove in gMG? What type of profile do you think Pove would need to show to be competitive in that space?

Yes. We're really excited about the opportunity in myasthenia gravis. It stems largely from a trial in China looking at a wild-type TACI that had excellent results in a myasthenia gravis population. It was a China-only study, but I think very encouraged by the results. And then we view myasthenia gravis as kind of this -- the poster child, the B-cell-mediated diseases, if you will, and also know that we have an engineered TACI, right, that's engineered specifically for higher potency and better tissue distribution. So we're excited about the potential in myasthenia gravis. We have a small Phase II proof-of-concept study that we -- I think it's about 30 patients. We're looking to enroll that as quickly as possible and then it's 12-week follow-up, and we'll see the results and move from there. Clearly, a lot of agents in this space, but I think still unmet need in terms of many of them need to be cycled on and off whereas the autoantibodies don't. And so if you could have a chronic therapy that didn't require that cycling, I think that could be, again, with monthly dosing, small auto-injector, et cetera. I think that's the opportunity there that we're excited about.

Great. So maybe moving away from renal and touching on Crinetics. So can you remind us some of the rationale and why now is the right time for the Crinetics acquisition? And how do you think endocrinology fits within the broader Vertex portfolio?

Yes. Thanks for the question. So we have a very strict R&D strategy criteria that need to be met in order for us to pursue a disease area internally or externally. A few of the criteria include understanding the human causal biology, are there validated biomarkers? Are there relatively -- can we see a pathway to a transformative effect that could help engender pretty efficient clinical development and regulatory pathways? Is it a specialty commercial infrastructure that can deliver it? And the specialty endocrine, the rare endocrine space that Crinetics has carved out fits all of those criteria really, really well. And I think that we have confidence in our due diligence process that when we identify an asset that does meet all those criteria, and there aren't many, right, and it can take some time to find them. When we identify an asset, we have confidence that we don't need to wait for Phase III for it to be derisked that we can do due diligence and have confidence, right? If you recall, Pove was Phase II ready, right? And we surveyed the landscape and identified that and do feel confident that we have potential best-in-class data there. So we identified Crinetics as fitting all of these criteria and didn't want to wait for it to be further derisked from Atumelnant Phase III data or potentially see another bidder in the space get interested in it. So we decided to act and are really excited to have them on board. And I think over time, in addition to the ongoing potential for PALSONIFY to only be a blockbuster in acromegaly, I think we see lots of potential in Atumelnant across a couple of different disease areas and then some upside from the pipeline as well. Existing commercial sales force, some really great medicinal chemists at targeting tough targets, if you will, and fits in over time with our type 1 diabetes work in the endocrine space.

And how would you say you're thinking about the opportunity in CAH, how that could be differentiated vis-a-vis chronicity for Atumelnant?

I think the important thing to -- where we would seek to differentiate is not only can you see your androgen levels come down, but that you can do that simultaneously with being at physiologic doses of glucocorticoids. And I think the opportunity lies in the fact that you can see if the androgen levels are coming down with some other therapies, glucocorticoids are still staying quite high, above at supraphysiologic doses. So our belief is the Atumelnant profile can be differentiated in going to physiologic doses of glucocorticoids and still being able to maintain your androgen levels at lower levels where you want them to be.