Analyst Conference Summary

Biotechnology

conference date: February 10, 2025 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2024 (fourth quarter, Q4 2025)

Forward-looking statements

Overview: Strong revenue growth, looking to expansion beyond CF.

Basic data (GAAP):

Revenue was $2.91 billion, up 5% sequentially from $2.77 billion, and up 16% from $2.52 billion in the year-earlier quarter.

Net income was $913 million, up sequentially from negative $1.05 billion and down 6% from $969 million year-earlier.

Diluted Earnings Per Share (EPS) were $3.50, up sequentially from negative $4.01 and up 6% from $3.71 year-earlier.

Guidance:

Full year 2025 revenue $11.75 to $12.0 billion. GAAP expenses $5.55 to $5.7 billion; non-GAAP $4.9 to $5.0 billion. Non-GAAP tax rate 20.5% to 21.5%.

Conference Highlights:

Reshma Kewalramani, CEO, said "We anticipate 2025 will be another important year with the landmark Journavx approval and launch for moderate-to-severe acute pain; the launch of our fifth CF medicine, Alyftrex; the continuing global launch of Casgevy; and multiple ongoing pivotal trials. We are excited to drive diversification of the revenue base, disease areas of focus, R&D pipeline, and geographies to continue to deliver long-term value to both patients and shareholders" Some executive changes were announced. Still expects five new product launches over five years.

Journavx (Suzetrigine or VX-548) for acute pain NDA was approved by the FDA on January 30, 2025. In Q3 2024 started a Phase 3 trial in diabetic peripheral neuropathy. Believes addresses a multi-billion dollar market.

In Cystic Fibrosis, Alyftrek (Vanzacaftor/tezacaftor/deutivacaftor) was approved in December 2024. Is enrolling a Phase 3 study for children 2 to 5 years old. Hopes will become the new standard of care in CF. It will have a substantially lower royalty burden than prior CF therapies. Vertex has also completed regulatory submissions for the vanzacaftor triple in the EU, United Kingdom, Canada, Australia, New Zealand and Switzerland.

Vertex continues to work to introduce gene therapy Casgevy for sickle cell disease and transfusion-dependent beta thalassemia.

Work continues on VX-880 and VX-264 for Type 1 diabetes.

Povetacicept for IgAN nephropathy Phase 3 study initiated in Q4 2024. Also in earlier stage studies for pMN, LN, and AAV.

VX-522, a CFTR mRNA therapy multiple ascending dose portion of Phase 1/2 is underway. Expects top line data in H1 2025. Partnered with Moderna. For about 5,000 CF patients who cannot benefit from CFTR modulators.

VX 993, the next generation Nav1.8 pain inhibitor, is in Phase 1 with an IV formulation, which initiated a Phase 2 oral study in Q3 2024.

Inaxaplin is in Phas 2 and 3 studies for APOL1 mediated kidney disease.

VX-407 ofr ADPKD (kidney with mutant PKD1 genes) is in a Phase 1 trial.

Non-GAAP results: Net income $1.04 billion, down 9% sequentially from $1.14 billion, and down 5% from $1.10 billion year-earlier. EPS $3.98, down 9% sequentially from $4.38, and down 5% from from $4.20 year-earlier.

No breakdown of revenue for Syhmdeko, Orkambi, or Kalydeco. Lumped them into Other.

See also the Vertex Pharmaceuticals Pipeline page.

Cash and equivalents balance ended at $11.2 billion, flat sequentially from $11.2. No debt.

Cost of sales was $423 million. Research and development expense was $999 million. Sales, general and administrative expenses were $378 million. Acquired in-process R&D $88 million; Change in contingent consideration $1 million. Total costs and expenses were $1.89 billion, leaving operating income of $1.03 billion. Interest income net $125 million. Other expense $15 million. Income taxes $224 million.

Q&A selective summary:

Journavx acceptance? Working with the largest national and regional retail chains. Should be in wholesalers this month, retail soon after. Working with payers and on pre-approvals. Indications people are looking at moving to Journavx. Everyone is acutely aware of the unmet need.

CF business is growing strongly thoughout the world.

Alyftrek? Seeing interest across all three populations we expected, and first prescriptions have been issued.

Public payer coverage of Journavx? We expect broad coverage over time. Waiting for a non-opioid pain killer. Federal and state policy moves should give us a tail wind.

DPN suzetrigine study? Phase 3 has a placebo group and a comparison group.

Onset of action issue for Journavx? We want it to be the first line prescibed medicine for moderate to severe acute pain. We got a broad label, no time limit, but acute pain is considered to last less than 90 days. Early use might be post-procedure for up to 2 week periods. Volumes will ramp faster than revenue.

Rebates to get on formulaties? If there are hurdles for prescribers, that does not work, we are aiming for minimal management controls. Alternatives to Pain Act, if passed and signed into law, could help.

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