VERTEX PHARMACEUTICALS INC / MA Q4 FY2024 earnings call

Leadership Changes

• Stuart Arbuckle will retire on July 1, 2025, after nearly 40 years in biopharma, including over a decade at Vertex. Charlie Wagner will take on the additional role of COO, and Duncan McKechnie will be promoted to EVP and Chief Commercial Officer.

Earnings Highlights

• Fourth quarter 2024 revenue was $2.91 billion, up 16% y-o-y; full-year 2024 revenue exceeded $11 billion, a 12% increase.

R&D Updates

• CF: U.S. launch of ALYFTREK (fifth CFTR modulator) underway; next-generation CFTR modulator regimen (NG 3.0) in clinic. Renal pipeline: Progress on inaxaplin for AMKD, povetacicept for IgAN, and VX-407 for ADPKD.

Commercial Updates

• ALYFTREK: Early positive feedback, once-daily dosing, expanded eligibility; international approvals in progress. CASGEVY: Global launch gathering momentum, with regulatory approvals in multiple regions. JOURNAVX: First selective oral non-opioid pain signal inhibitor approved, commercialization underway with focus on payer and provider engagement.

In the fourth quarter of 2024, Vertex Pharmaceuticals achieved total product revenue of $2.91 billion, representing a 16% year-over-year growth. For the full year 2024, revenue reached over $11 billion, a 12% increase compared to 2023. The CF segment contributed significantly, with strong sales driven by ongoing commercial execution. CASGEVY continued its global launch momentum, and JOURNAVX, a new approval for moderate-to-severe acute pain, started its commercialization. In terms of revenue contribution, CF medicines, CASGEVY, and JOURNAVX each play distinct roles in the company's overall revenue structure.

Revenue Guidance

• 2025 total revenue expected in range of $11.75 billion to $12 billion, ~8% growth midpoint at current exchange rates. U.S. as main driver; ex-US CF revenue impacted by IP violation in one country, most pronounced in Q1 2025. CASGEVY ramp-up and JOURNAVX contribution in back half.

Expenses Guidance

• Combined non-GAAP R&D, acquired IPR&D, and SG&A expenses projected $4.9 billion to $5 billion for 2025, with majority of operating expenses in R&D to support clinical programs.

• IP violation in one country affecting ex-US CF revenue in Q1 2025. - Uncertainties in payer coverage and formulary access for JOURNAVX, including potential utilization management controls delaying patient access.

Q: Can you further elaborate on pre-launch efforts in retail pharmacies and P&T committee review processes for JOURNAVX?

A: We're working with national and regional retail chains for broad availability. In P&T committees, we're engaging compliantly to provide clinical info, and expect broad access to grow over time.

Q: How should we think about the success of the mRNA program in cystic fibrosis?

A: The mRNA program (VX-522) is for the last ~5,000 CF patients with no options. Expected outcomes range from 3% to 14% improvement in ppFEV1, translating to long-term benefits like reduced pulmonary exacerbations.

Q: Talk to me a little bit about how your early discussions with payers have been progressing for JOURNAVX?

A: Pay discussions have gone well, with broad interest due to unmet need for non-opioid pain relief. Expect broad access to grow over time as more payers include JOURNAVX on their formulary.

Q: Thinking about the 2025 top line guidance, can you talk about how we should think about the U.S. versus ex-U.S. contribution to that growth rate in the CF business?

A: U.S. has growth from ALYFTREK and JOURNAVX launches, plus CF growth. Ex-US CF growth impacted by IP violation in one country, most pronounced in Q1 2025; CASGEVY launch continues to ramp ex-US.