Analyst Conference Summary


Vertex Pharmaceuticals

conference date: May 5, 2022 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2022 (first quarter, Q1, 2022)

Forward-looking statements

Overview: continued strong revenue and profit growth.

Basic data (GAAP):

Revenue was $2.10 billion, up 1% sequentially from $2.07 billion, and up 22% from $1.72 billion in the year-earlier quarter.

Net income was $762 million, down 1% sequentially from $770 million and up 17% from $653 million year-earlier.

Diluted Earnings Per Share (EPS) were $2.96, down 1% sequentially from $3.00 and up 19% from $2.49 year-earlier.


Reiterated full year 2022 guidance. Product revenue $8.4 to $8.6 billion

Conference Highlights:

Reshma Kewalramani, CEO, said "Following upon our success in transforming the treatment of cystic fibrosis, Vertex's unique and differentiated R&D strategy continues to deliver with positive Phase 2 proof-of-concept studies in multiple disease areas, and another wave of therapies set to enter the clinic in the second half of this year. With yet another quarter of strong revenue performance characterized by 22% year-over-year growth, we are well positioned for continued innovation and sustained growth as we work to bring additional transformative medicines to more patients around the globe." Cystic fibrosis can continue to grow as there are still many untreated patients, including in countries that have not yet, or only recently, approved reimbursement.

In January 2022 the EU approved a label extension from Kaftrio (Trikafta) to treat CF in patients ages 6 to 11. In Q4 2021 received Kaftrio reimbursement approvals in Spain and Netherlands.

In March 2022 Orkambi filed an sNDA based on in Phase 3 results in patients aged 12 to 24 months.

Vertex completed enrollment in the Phase 3 study of Trikafta in children 2 to 5 years old. The Company anticipates filing a supplementary new drug application (sNDA) with the FDA before the end of 2022.

In January 2022, the European Commission and the UK Regulatory Agency approved a label extension for Kaftrio (ivacaftor/tezacaftor/elexacaftor) in a combination regimen with ivacaftor, for the treatment of CF in children ages 6 through 11 years old who have at least one F508del mutation in the CF transmembrane conductance regulator (CFTR) gene. With these approvals, approximately 1,900 children are newly eligible.

Non-GAAP results: Net income $907 million, up 5% sequentially from $866 million, and up 16% from $781 million year-earlier. EPS $3.52, up 4% sequentially from $3.37, and up 18% from from $2.98 year-earlier.

$ millions
Q1 2022 Q4 2021 Q1 2021 y/y % change

VX-147 for APOL1-mediated FSGS Phase 2 reported positive results in Q4 2021. Believes this is a multi-billion dollar opportunity. Will advance to Phase 3 in 2022.

Enrollment is complete in the ongoing CTX001 Phase 3 clinical trials in TDT and SCD, with more than 75 patients dosed to date. Vertex anticipates presenting updated data from the clinical trials, with more patients and longer follow-up, at medical conferences in 2022. Two new Phase 3 studies of CTX001 were initiated in pediatric patients with TDT and SCD. Vertex plans to submit global regulatory filings in TDT and SCD in late 2022.

Vertex plans to advance one or more novel small molecule zAAT correctors for Alpha-1 Antitrypsin Deficiency into the clinic in 2022.

Vertex reported positive results in two Phase 2 pain trials in March 2022. TheVX-548 Phase 2 dose ranging acute pain studies included one following bunionectomy surgery and the other following abdominoplasty surgery.

VX-880 for type 1 diabetes 150 day data was very positive; could be transformative. However, the FDA placed a clinical hold on the study in April 2022.

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. Plans regulatory filings for late 2022. Already preparing for launch. Believes about 150,000 patients in U.S. or Europe.

See also the Vertex Pharmaceuticals Pipeline page.

Cash and equivalents balance ended at $8.2 billion, up sequentially from $7.5 billion. No debt.

Cost of revenue was $246 million. Research and development expense was $603 million. Sales, general and administrative expenses were $215 million. Change in contingent consideration $7.5 million. Total costs and expenses were $1.05 billion, leaving operating income of $1.04 billion. Interest expense net $13 million. Other expense $73 million. Income taxes $193 million.

Q&A selective summary:

Acclerated filing of VX-147? Singular Phase 2/3 study, enrolling broad population. Has a 48 week prespecified analyis that provides a pathway to accelerated approval. eGFR is tightly tighed to proteinurea. Our confidence level for the interim analysis is high.

Pain as part of overall strategy? VX-548 treats acute pain, which we see as within our sphere. This mechanism could work across other pain types. We are not a specifically orphan drug company. We think pain fits because it is really a specialty requiring a strong understanding of the biology. We think it is a multi-billion opportunity, as neuropathic pain would also be.

AMKD? Key trial criteria is proteinurea, reduced kidney function, and two APOL1 mutations. Gene testing had not been common because it had not mattered for earlier therapies. Study is in U.S. and EU, with patients on standard of care. We have a genotyping study up and running.

Bluebird experience with payers? DMD (Duchenne Muscular Dystrophy) program involves gene editing, ours delivers the full length protein, others only shorter lengths. Does not believe Bluebird inability to get payment sets a precedent for gene therapy in genreal of for CTX001.

In diabetes, do you see eventual insulin independence? Strict criteria is they do not take insulin, fasting glucose is less than 126, and after food level as less than 180. Patient one met all of those criteria. We think our approach should be durable. The normal cells last a lifetime, we believe our cells can last as long.

Analyst Conference Summaries Main Page


More Analyst Conference Pages:



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 2022 William P. Meyers