Analyst Conference Summary

Biotechnology

conference date: April 29, 2021 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2021 (First quarter, Q1, 2021)

Forward-looking statements

Overview: Another quarter of strong revenue growth.

Basic data (GAAP):

Revenue was $1.72 billion, up 6% sequentially from $1.63 billion, and up 14% from $1.52 billion in the year-earlier quarter.

Net income was $653 million, up 8% sequentially from $604 million and up 8% from $603 million year-earlier.

Diluted Earnings Per Share (EPS) were $2.49, up 8% sequentially from $2.30 and up 9% from $2.29 year-earlier.

Guidance:

Conference Highlights:

Reshma Kewalramani, CEO, said "In CF, our goal is that all eligible patients have access to and can benefit from CFTR modulators. In the first quarter, we continued to make significant progress towards this goal, and in so doing again delivered strong revenue and earnings growth. Beyond CF, we have also seen continued significant progress across our broad pipeline, including advancement of VX-548 to Phase 2 in acute pain, initiation of the Phase 1/2 clinical trial with VX-880 in type 1 diabetes and completion of enrollment and dosing in our Phase 2 proof-of-concept study with the AAT corrector, VX-864. The recent amendment of our agreement with CRISPR Therapeutics for the CTX001 program further enhances our leadership position in cell and genetic therapies and we look forward to completing enrollment of our ongoing trials for CTX001 in sickle cell disease and beta thalassemia this year and bringing this first-in-class treatment to patients with these devastating diseases as soon as possible."

Trikafta (Kaftrio in EU) Phase 3 trial to expand the label to children aged 6 to 11 reported positive data and a PFUFA of June 8, 2021 was set. Believes Trikafta can treat about 90% of CF patients. Label expanded by FDA to include people 12 and older. Approved for marketing and reimbursement in Switzerland in Q4 2020.

On April 28, 2021 Kaftrio (ivacaftor/texacaftor/elexacaftor) was approved for cystic fibrosis patients 12 years or older with at least one F508del mutated CFTR gene.

In April, 2021, Vertex entered into a research collaboration with Obsidian Therapeutics to discover novel therapies that regulate gene-editing for the treatment of serious diseases. This collaboration enables us to leverage Obsidian’s cytoDRiVE platform technology to discover gene-editing medicines whose therapeutic activity can be precisely controlled using small molecules.

Non-GAAP results: Net income $781 million, up 18% sequentially from $661 million, and up 16% from $674 million year-earlier. EPS $, down % sequentially from $2.51, and up % from from $ year-earlier.

Vertex and its partner CRISPR Therapeutics are evaluating the use of a CRISPR gene-edited therapy for the treatment of transfusion-dependent beta thalassemia and sickle cell disease. Enrollment is ongoing in the clinical studies for CTX001, with more than 20 patients have been dosed with CTX001 to date. Completion of enrollment in both studies is expected in 2021.

VX-880 for type 1 diabetes (T1D) was cleared for clinical trail by the FDA. The Phase 1/2 trial should begin first half of 2021.

Vertex continued a Phase 2 dose-ranging study evaluating the once-daily potentiator VX-561 as a monotherapy as requested by the FDA. The study is designed to evaluate multiple doses of VX-561 to support potential Phase 3 development of VX-561 in a once-daily triple combination regimen. Vertex also initiated a Phase 2 study evaluating the next-generation corrector, VX-121, in combination with VX-561 and tezacaftor as a potential once-daily triple combination regimen

In Q4 2020 Skyhawk Therapeutics and Vertex entered a strategic collaboration to discover and develop novel small molecules that modulate RNA splicing for the treatment of diseases.

A Phase 2 trial underway for a second AAT therapy, VX-864. Data expected in first half of 2021.

See also the Vertex Pharmaceuticals Pipeline page.

Cash and equivalents balance ended at $6.9 billion, up sequentially from $6.66 billion. No debt.

Cost of revenue was $192 million. Research and development expense was $456 million. Sales, general and administrative expenses were $192 million. Change in contingent consideration $3.9 million. Total costs and expenses were $836 million, leaving operating income of $888 million. Interest expense net $14 million. Other expense $53 million. Income tax $168 million.

Q&A:

Audio recording was not yet available; may come back to this later. Or not.

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