Vertex Pharmaceuticals reported a strong start to 2024, with a 13% year-over-year revenue increase to $2.7 billion in Q1.
Product and Pipeline Updates
CF patients continue to grow with TRIKAFTA’s performance, including newly approved age groups contributing to revenue growth.
Launched CASGEVY for sickle cell disease and beta-thalassemia, marking the beginning of revenue diversification.
Advanced multiple programs into Phase III, including vanzacaftor for CF, VX-548 for acute pain, and inaxaplin for kidney disease.
Resumed VX-880 trial in type 1 diabetes and initiated VX-407 in polycystic kidney disease.
Announced acquisition of Alpine Immune Sciences, adding povetacicept for IgA nephropathy to the pipeline.
Financial Performance and Guidance
Non-GAAP operating income increased to $1.3 billion, up 48% from Q1 2023.
Non-GAAP EPS for Q1 2024 was $4.76, benefiting from revenue growth and a lower tax rate.
Maintained 2024 revenue guidance at $10.55 billion to $10.75 billion and operating expenses guidance at $4.3 billion to $4.4 billion.
Plans to fund the $4.9 billion acquisition of Alpine Immune Sciences with existing cash.
Commercial and Strategic Initiatives
CF growth continues with TRIKAFTA and KAFTRIO expansions, and upcoming vanzacaftor launch.
CASGEVY launch progressing with over 25 activated treatment centers and initial patient cell collections.
Preparations for suzetrigine launch in acute pain are well underway, targeting a significant portion of the acute pain market.
Conclusion
Vertex Pharmaceuticals continues to demonstrate strong financial performance and progress in its product pipeline, with significant milestones expected throughout 2024.
Question and Answer
Vanzacaftor Triple and Sweat Chloride Benefit
Question
Will Vertex Pharmaceuticals receive a claim for the sweat chloride benefit in the Vanzacaftor triple therapy label, and what regulatory steps can be taken to emphasize this benefit?
Answer
The inclusion of sweat chloride data in CFTR modulator labels is standard practice due to its status as a pharmacodynamic marker.
Vertex expects sweat chloride data from the Vanzacaftor triple studies to be reflected in the label, but negotiations are still pending as the filing has just been submitted.
VX-548 and Acute Pain Labeling
Question
Will Vertex seek to make a claim for VX-548 as an alternative to opioids or Lyrica in the acute pain setting, and how might the regulatory climate influence this decision?
Answer
Vertex is submitting all data generated in acute pain studies for VX-548, including comparisons with placebo and data with opioid arms.
Label negotiations are not yet underway, but the company is open to discussions with regulators on how to display the data and will share data with prescribers, including the pre-gabalin arm in the Phase III DPN study.
Medicare Reimbursement and Non-Opioid Alternatives
Question
Will the availability of non-opioid alternatives be necessary to facilitate Medicare reimbursement for VX-548 in the acute pain setting?
Answer
While the primary endpoint data will be crucial for securing reimbursement, policy plays a significant role in ensuring no barriers to prescribing non-opioids.
Vertex is seeking a broad label for VX-548 to allow physicians the flexibility to use the product for various types of acute pain.
Advancement of Additional Pain Molecules
Question
Will Vertex consider advancing another molecule for musculoskeletal pain, potentially through a commercial partnership, to maximize value in the pain pipeline?
Answer
Vertex intends to serve all patients in the pain space, including those with musculoskeletal pain, through its NAV1.8 and NAV1.7 programs.
The company will focus on acute and neuropathic pain with internal development and will explore partnerships for musculoskeletal pain to capture value while prioritizing one step at a time.
Key Decision Makers and Hospital Adoption of Suzetrigine
Question
Can you elaborate on the importance of hospital administrators and physician treaters in the institutional adoption of Suzetrigine for acute pain, and what factors might influence their decisions?
Answer
All stakeholders, including administrators and physician advocates, play a role in decisions regarding the use of a new medicine in the institutional setting.
Hospitals typically go through a standardized process, involving P&T committees, to decide on formulary placement, with a focus on efficacy, safety, and the potential for opioid sparing.
Outcomes Data and Hospital Adoption of Suzetrigine
Question
What specific outcomes data might hospitals require to justify the use of Suzetrigine over opioids, and how might this impact adoption?
Answer
The data demonstrating opioid sparing potential is already available and will be impactful in discussions with stakeholders.
Hospitals are particularly interested in the use of Suzetrigine in the discharge setting, where adoption is expected to be earlier.
Cell Collection for CASGEVY in the U.S.
Question
Can you provide any additional information on the number of patients in the U.S. who have undergone cell collection for CASGEVY and the expected growth of cell collections in the future?
Answer
While specific patient numbers and details are not disclosed, Vertex is pleased with the number of ATCs activated globally and the progress of cell collection, which has already begun for many patients.
The company expects momentum to build throughout 2024, a foundational year for CASGEVY, with increasing activations and cell collections.
Pain Pipeline Differentiation and Inventory Movements
Question
Can you provide more details on how VX-993 is expected to be differentiated in the pain pipeline, and does its advancement to Phase II mean that VX-973, which recently completed Phase I, will not be pursued? Are there any inventory movements in the quarter that should be noted?
Answer
VX-993 is a bit further ahead than VX-973 in terms of preclinical development, manufacturing, and readiness for Phase II, which is why it is advancing first.
Vertex is looking for molecules with both oral and IV formulations and the right drug-like properties for combination with NAV1.7, driving the selection of VX-993 for advancement.
Presentation of VX-548 Phase III Data and CASGEVY Pricing in the Middle East
Question
Can you provide insight into potential venues for the presentation of VX-548 Phase III data, and can you share any directional insight on pricing and reimbursement for CASGEVY in the Middle East?
Answer
Vertex expects to present VX-548 Phase III data at fall meetings, both in congress form and through publications.
While specific pricing data for individual countries is not disclosed, the company emphasizes that reimbursement agreements in the Middle East reflect the transformative value and lifetime benefits of CASGEVY.
Formulary and Access Discussions for Suzetrigine
Question
Stuart, you mentioned that government programs could help incentivize reimbursement of Suzetrigine ahead of opioids in the acute pain setting. Can you provide more details on this, and do your discussions suggest that, without legislative initiatives, reimbursement for Suzetrigine is likely to occur after opioids?
Answer
Policy initiatives aim to reduce financial disincentives for selecting branded non-opioids in a market dominated by generic opioids.
Discussions with institutions are more clinically focused on the appropriate use of Suzetrigine, while policy discussions address financial considerations and incentives.
Physician Expectations and CF in Brazil
Question
Is it Vertex’s expectation that patients will have to step through generic opioids before accessing VX-548, as suggested by a recent physician survey? Can you provide some insights into the potential market size for the CF franchise in Brazil?
Answer
While Vertex cannot speculate on individual institutional practices, the company does not believe it would be medically reasonable to require patients to step through generic opioids when a non-addictive, effective alternative like VX-548 is available.
Vertex estimates that there are around 1,500 TRIKAFTA-eligible patients in Brazil, and with a reimbursement agreement in place, the company is positioned to launch and provide access to all eligible patients.
Priority Review for VX-548 and Acute Pain Launch Timing
Question
What is the level of confidence in receiving priority review for VX-548 in acute pain, and what is the expected timeline for revenue recognition following the commercial build-out? Can you clarify the number of patients who have completed cell collection for CASGEVY?
Answer
While a definitive answer on priority review will come after the submission is completed, the company’s interactions with the FDA and the drug’s fast track status and breakthrough designation suggest a favorable outlook.
The acute pain launch is progressing well, and the company will be launch-ready upon completion of the rolling submission and receipt of the PDUFA date.
Unlike CASGEVY, revenue recognition for VX-548 will not be delayed by an extended treatment process since it is a small molecule and will be sold and distributed in a more traditional manner.
Commercial Navigation of Otsuka GFR Data and Myotonia as an Endpoint
Question
How is Vertex planning to navigate potential GFR data from Otsuka upon launching in IgA nephropathy, and do you believe myotonia is an approvable endpoint for DM1, or might the agency require a placebo correction with strength or force measurements?
Answer
Vertex is confident in the clinical differentiation of its dual APRIL/BAFF inhibitor, Povetacicept, for IgA nephropathy based on its best-in-class efficacy, including reductions in proteinuria and hematuria.
While it’s too early to speculate on specific endpoints for approval in DM1, the company acknowledges the potential for accelerated approval pathways in rare and serious diseases with unmet medical needs.
Highlighting BLISS in IgA Nephropathy and U.S. CF Franchise
Question
Have you considered how you might highlight the BLISS mechanism of action in IgA nephropathy, and can you provide insights into potential differentiation strategies based on this feature? Can you clarify the reasons for a slight quarter-over-quarter decline in TRIKAFTA sales in the U.S. despite a price increase?
Answer
While Vertex acknowledges the potential of the BLISS mechanism of action in IgA nephropathy, the company believes that the most compelling data are the clinical results already available, demonstrating the dual inhibitor’s impact on proteinuria, hematuria, GFR, and remission.
Regarding the U.S. CF franchise, the quarter-over-quarter fluctuations are not a cause for concern, as the company experienced strong year-over-year growth and the benefits of a price increase will be more fully realized throughout the year.
