Analyst Conference Summary


Vertex Pharmaceuticals

conference date: November 2, 2021 @ 1:30 PM Pacific Time
for quarter ending: September 30, 2021 (third quarter, Q3, 2021)

Forward-looking statements

Overview: Revenue growth strong.

Basic data (GAAP):

Revenue was $1.98 billion, up 11% sequentially from $1.79 billion, and up 29% from $1.54 billion in the year-earlier quarter.

Net income was $852 million, up sequentially from $67 million and up 28% from $667 million year-earlier.

Diluted Earnings Per Share (EPS) were $3.28, up sequentially from $0.26 and up 30% from $2.53 year-earlier.


Increased 2021 revenue guidance to $7.4 to $7.5 billion.

Conference Highlights:

Reshma Kewalramani, CEO, said "Our financial performance in the third quarter was outstanding, marked by the exceptional continued growth of Trikafta/Kaftrio. Based on these results, we are again raising our 2021 product revenue guidance, and we see significant additional growth ahead as we continue to deliver this transformational medicine to more people with CF,"

In Q3 2021 VX-880 had positive results in the first Type 1 diabetes patient dosed. The idea is to make the cells in industrial quantities to treat patients.

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.

VX-147 for APOL1-mediated FSGS completed Phase 2 enrollment in Q3 2021.

Non-GAAP results: Net income $926 million, up 14% sequentially from $811 million, and up 33% from $697 million year-earlier. EPS $3.56, up 14% sequentially from $3.11, and up 35% from from $2.64 year-earlier.

$ millions
Q1 2021 Q4 2020 Q1 2020 y/y % change

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. In both studies for CTX001 target enrollment was achieved in Q3 2021. Believes will be Vertex's next launched medicine in 2022. Already preparing for launch.

See also the Vertex Pharmaceuticals Pipeline page.

Cash and equivalents balance ended at $6.96 billion, up sequentially from $6.71 billion. No debt.

Cost of revenue was $237 million. Research and development expense was $494 million. Sales, general and administrative expenses were $198 million. Change in contingent consideration $1 million. Total costs and expenses were $0.93 billion, leaving operating income of $1.05 billion. Interest expense net $14 million. Other income $42 million. Income taxes $231 million.

Q&A selective summary:

Moderna collaboration, gene editing? Very excited on mRNA program for CF, which is for patients who do not make any CFTR protein. Delivery to the HBE (bronchial epithelial) lung cells is key. So IND should go in next year.

Diabetes Arbor collaboration? There are the islet cells themselves, then there is the mechanism to cload the cells from the immune system. We plan to use gene editing to create hypoimmune cells.

CF program competition? We have demonstrated the potential of our VX-121 program, including in Phase 2. It is way ahead of competition.

Capital allocation? Focus is reinvesting in innovation. We invest in the smart external investments made in past years. We are not looking for a certain type of deal, but on tools and technologies that fit our strategy.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes, not advice.

Copyright 2021 William P. Meyers