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# Vertex Pharmaceuticals Incorporated presents at Leerink’s Global Healthcare Conference 2025

Monday, March 10, 2025 10:00 AM

# Event Participants

Analysts 2 David Risinger, Unknown Analyst

Executives 2 Charles Wagner, David Altshuler

# David Risinger Analyst

All right. Great. Well, thanks very much, everyone, for joining us for our next session with Vertex. My name is Dave Risinger. For those of you who don't know me, I cover diversi!ed biopharmaceuticals.

And it's my pleasure to welcome Charlie Wagner, who is CFO and was recently appointed COO as well; and David Altshuler, who is the company's Chief Scienti!c O"cer to be with us today.

So I thought we could start o# by turning it over to you, Charlie, to kick us o# with some opening comments.

# Charles Wagner Executive

Yes. Thank you, David, and thanks for everyone who's here. Listen, we're not that far removed from 2024, a year in which Vertex saw exceptional growth and !nancial performance, regulatory approvals and the im...

# Vertex Pharmaceuticals Incorporated presents at Leerink’s Global Healthcare Conference 2025

Monday, March 10, 2025 10:00 AM

# Event Participants

Analysts 2 David Risinger, Unknown Analyst

Executives 2 Charles Wagner, David Altshuler

# David Risinger Analyst

All right. Great. Well, thanks very much, everyone, for joining us for our next session with Vertex. My name is Dave Risinger. For those of you who don't know me, I cover diversi!ed biopharmaceuticals.

And it's my pleasure to welcome Charlie Wagner, who is CFO and was recently appointed COO as well; and David Altshuler, who is the company's Chief Scienti!c O"cer to be with us today.

So I thought we could start o# by turning it over to you, Charlie, to kick us o# with some opening comments.

# Charles Wagner Executive

Yes. Thank you, David, and thanks for everyone who's here. Listen, we're not that far removed from 2024, a year in which Vertex saw exceptional growth and !nancial performance, regulatory approvals and the important acquisition of Alpine Immune Sciences. Now squarely in 2025, we continue to extend our leadership in CF, notably with the recent approval and ongoing launch of ALYFTREK. We are continuing to build momentum with CASGEVY, our gene editing therapy for sickle cell disease and beta thalassemia, executing that launch.

And then importantly, now kicking o# the growth of our franchise in acute pain with the launch of JOURNAVX. So a very, very busy start to the year. We've also got 4 programs in Phase III that will have signi!cant milestones during the year. So something for folks to look forward to there. And I guess I would just say, in a period of time when it seems like a lot of people are very -- feeling very uncertain and focused on turbulence, we continue to execute very consistently and are really excited for the year and happy to take your questions today.

# David Risinger Analyst

Excellent. And could you comment on your sort of key areas of focus in your new role for Vertex in coming years?

# Charles Wagner Executive

Yes, I think listen, my areas of focus are the same for the entire executive team, and I alluded to it in the opening remarks. We've got a business now that is very healthy, very growing, diversifying in many ways. Certainly, a lot of our focus in 2025 is on the launches, the launch of ALYFTREK, the launch of CASGEVY, the launch of JOURNAVX. Sort of all attention on making sure that we are building momentum that patients and physicians are having a great experience in the early days of these launches.

And for those that are in pain, for example, ensuring that we are contracting and pricing in a way that is both responsibly balances access but also preserving value for Vertex for the long term. So a lot of attention there. And then as I mentioned, with 4 programs in Phase III, David and our colleagues in clinical and Reshma, our CEO, are very focused on making sure those are shepherded through the process. As I mentioned, we will achieve a number of milestones in those programs this year, some of which will produce data this year, others producing data next year.

But that really does set us up for a whole another wave of diversi!cation, not in the distant future but in the next couple of years, something that requires a lot of our attention these days.

# David Risinger Analyst

Excellent. Excellent. And how would you paint the picture of where you are with respect to garnering attractive insurance access for JOURNAVX.

# Charles Wagner Executive

For JOURNAVX, yes. So yes, so keep in mind with JOURNAVX, the approval was January 30. So we're just over a month in, and I know people expect great things from us. We are moving as fast as we can. Honestly, the -- we've had as many sort of appropriate preapproval conversations as we could have with IDNs and payers.

Obviously, that's kicked into high gear since the approval.

We are really encouraged by the conversations. So whether they are currently now conversations with physicians, with hospitals, with IDNs, with payers, with GPOs, there is very, very clearly an unmet need for an alternative to opioids and JOURNAVX !lls that need very nicely, and there's a lot of interest in procuring coverage for this medicine.

Now that takes some time. We have said all along that going through P&T committees, going through the contracting process would take some time and it will. But we've already seen signs of progress. There was some news in the press last week about ongoing conversations we have with Optum, not complete yet, but I think positive that these are occurring so rapidly. There are 2 states, New York and Arkansas that have already provided coverage for JOURNAVX.

And so we have a lot to go, but the early signs are really encouraging. And I think, in particular, some of the conversations that are going on right now indicate that coverage in many cases will be sooner rather than later. But again, we're going to balance that responsibly.

# David Risinger Analyst

Excellent. And so, yes. I think you actually understated the 2 states providing coverage. When I say that, my understanding is that it's fully open access, no prior authorizations, no step edits, which is quite extraordinary for states that are not in the best of !nancial health, in particular, right? So New York and Arkansas were the ones that provided that access.

Could you add a little more color.

# Charles Wagner Executive

Yes, you're right about that. So obviously, our goal is to provide access for patients without any prior authorization or step edits. That is, in fact, what we've achieved in those 2 states. And again, I think it speaks to the compelling proposition, if you will, including the economic proposition for JOURNAVX. These are states that have understand the cost of the opioid epidemic, understand the role that an alternative to opioids can provide in this case.

And so the fact that they provided broad coverage quickly, I think, again, is very telling.

# David Risinger Analyst

Excellent. Well, hopefully, the rest of the states follow.

# Charles Wagner Executive

Hopefully. 48 to go -- 49 maybe.

# David Risinger Analyst

Excellent. So maybe we could just then pivot to thinking about how the inpatient setting is quite di#erent from the outpatient setting. So clearly, broad access without constraints by PBMs is important, but also within IDNs, it's quite complicated. But how would you paint that picture?

# Charles Wagner Executive

Yes. And I think we've talked about the fact that annually in the U.S., about 80 million people a year seek a prescription for moderate-to-severe acute pain. Importantly, about $6 0 %$ of those of the prescriptions are written or in$uenced in an institutional setting, so in a hospital or a surgical center.

Some of those prescriptions, the medicine is used in the institution. The majority though of the prescriptions, the medicine is !lled at discharge or at retail and administered at home essentially. So the largest part of the market is outside of the institution, but there's a lot of in$uence around the writing of prescriptions in the institutional setting.

And so therefore, our commercial e#orts in the early days are concentrated on a couple of thousand hospitals that ladder up into a couple of hundred IDNs that represent the majority of prescription writing. Over time, we expect to reach the rest of the market, partly through e#orts in our virtual or digital sales e#ort. We have kind of nonpersonal outreach to other aspects of the market, and that will grow over time. But the greatest commercial leverage for us in the early days is in the institutional setting where the greatest volume of prescriptions are written.

# David Risinger Analyst

Got it. Okay. Excellent. Why don't we pivot to the pipeline a little bit. So it'd be helpful, David, for you to talk about the VX-993, your vision for it and just color and perspective on that !rst follow-on agent.

# David Altshuler Executive

Sure. Let me start just with sort of our long-term vision and then I'll speak to the nearer term. We do believe that this is sort of JOURNAVX opening the door to what I think will in the long run prove to be a transformation of how pain is treated because the selective sodium channels to block peripheral nerve signaling, getting the pain basically -- the signals that take the pain from your tissues to your brain has great potential ahead of us.

And the reason for that is NaV1.8, JOURNAVX approved, and I'll come to 993 in a minute, but also there's NaV1.7 which is another sodium channel, selective sodium channel that's expressed in the same neurons that partners with NaV1.8 and that NaV1.7 triggers, NaV1.8 8 propagates the signals. And so there's really tremendous potential in the future for this. But in the near term, as we do with all of our programs, we continue to out-innovate ourselves. And with 993, I'd say, there's 3 things that are particularly a focus with that molecule, which, as you know, is in Phase II, both in acute pain and also in DPN.

And so the 3 things are: one, the ability to dose higher up the curve. So we don't know what will happen when we do that because we've never done it before. So no one else has either. So we don't know if we're already at the ceiling or if there's more e"cacy they can be had. But 993 has the potential to go higher, considerably higher.

And the Phase II studies will do that, so we'll be able to answer that question.

The second thing is the potential for IV treatment because just the physical properties are such that it can be formulated for IV, and we're in the clinic with that, which I think for the clinical in-hospital treatment to be able to go -- to be able to eliminate not only the oral opioids, but also potentially at least some uses of IV opioids would also be powerful. So we're working on that. And the third is the potential for combo therapy, which is why I sort of started by mentioning NaV1.7. NaV1.7 -- NaV1.8 obviously works as a monotherapy. NaV1.7 hasn't yet gone to the clinic, but the human genetics is that people who carry knockouts of both copies of NaV1.7 have something called congenital insensitivity to pain, which is !rst discovered in the family of Pakistani !rewalkers, who could walk on coals.

They could feel the sharpness of the coal, they could feel the pressure of the coal, they could feel the temperature of the coal, and they were otherwise healthy. They just didn't feel any pain and that's lacking NaV1.7. And we've cracked that as well. And although it's not in the clinic yet, we're moving forward aggressively on that.

So the ability to be able to do combo therapy may be important in the future. Now I want to be clear, JOURNAVX could be used in combo therapy. There's no reason it couldn't be. But our team in San Diego who discovered the CF medicines and also leading this pain program knows a lot about how do you actually design molecules not just to work in a dish but actually to work in combo therapy in a person.

And so we continue to optimize so that the best chance not just for the next quarter or 2 or even the next year or 2, but the transformation of the disease in the future. And 1 thing I'll close with is, I !rst became part of Vertex when I joined the Board in 2012 and KALYDECO had just been launched. And one of the reasons that I was so compelled, -- I think Je# Leiden was so compelled by the company was -- he became CEO that year was because you had a target in -- yes had a disease in CF that of course had serious unmet need and no transformative therapy.

You had human genetic target validation in that case of CFTR, in this case of NaV1.7 and 1.8. You had a human cell model that you use; in the case of CF, it's HBEs; in the case of pain, we use human dorsal root ganglion cells. And then you had multiple mechanisms of action and multiple sca#olds that had already been proven their translatability. In the case of KALYDECO that was proving you could translate the target and the cells to a human being.

In the case of JOURNAVX, now we've done that with pain. And so it's not like we're speculating. We might have other molecules and sca#olds. It's not like we're speculating. There might be another target and that they might work in combo like they did in CF.

It's all a reality. And so the question is just sort of as we thought in 2012, how do you execute that. In that case, it took 7 years to get in 2012 to TRIKAFTA. I'm not saying it will happen that fast. But nonetheless, we did move quickly.

And I think in this case, it feels just like 2012 to me.

# David Risinger Analyst

Excellent...

# David Altshuler Executive

Pain 2012, CF -- pain 2025, CF 2012 in case you wonder what I meant.

# David Risinger Analyst

Excellent. And so then going back to NaV1.7, could you tell us a little bit about how you've cracked the code there and what to watch going forward?

# David Altshuler Executive

Yes. In terms of how we did it, I'll give some answers, obviously, especially with the approval of

JOURNAVX, this is becoming, I'm sure, a more competitive area. So I'm not going to give any enabling comments. But what I'll say is that people have worked on NaV1.8 and NaV1.7 for 2 decades. And we're the !rst to ever get to Phase III let alone approval.

And the reason for that is selective sodium channel inhibition. There are 9 sodium channels in the human genome, and they have di#erent functions. NaV1.1, for example, is the gene mutated in Dravet syndrome.

If you have $5 0 %$ less or $5 0 %$ more, you have inherited epilepsy. So that's not a target you want to touch. ${ \\mathsf { N a V 1 . 5 ^ { \\prime } s } }$ involved in the heart, et cetera. And so it's been known from the human genetics that if you can modulate 1.8 or 1.7, you can have e#ects on pain without other e#ects. The question is, could you make a molecule that only did that?

And !nally, if you wanted -- before we started clinical evidence, it's not just JOURNAVX, it's lidocaine, NOVOCAIN.

If everyone who's had dental work or had stitches knows that if you put lidocaine and Novocain, which is a nonselective sodium channel blocker, you can block all pain. You say, why is that used locally and not systemically, it's because it blocks the other sodium channels. So in the case of NaV1.8, our New England Journal paper a couple of years ago showed 30,000-fold selectivity of 1.8 over the others as well as having screened hundreds of other targets and seen nothing.

With NaV1.7, the whole community was working for 20 years on a particular target approach. And we decided a number of years ago technology had changed so much that people were sort of like following the thread that had been laid decades earlier. And we said there's so many new technologies, and we don't -- we're not a platform company. We use all the technologies. So whether it's DNA-encoded libraries, cryo-EM, AI, 10 years of structure activity relationships, our in vivo -- our human assays, and we decided to start again.

So we said, let's pretend no one's ever had done anything, let's try and discover it afresh. And in fact, we did discover something new that's not in the literature that anyone else knows about that has now moved forward rapidly towards the clinic. It's not yet ready for the clinic, but I'm con!dent based on where we are that we'll get there. So it's actually something that's not knowable for others because we decided let's start afresh with all the new technology rather than following something that was discovered with technology from 15, 20 years ago.

# David Risinger Analyst

Excellent. That's very impressive. Thank you. So maybe we can pivot to CF. So it seems to me that many CF patients would likely want to switch to ALYFTREK.

And obviously, you're not providing targets. But could you talk a little bit about your connectivity to patients, both through your specialty pharmacies and Vertex Direct and how you can pretty rapidly educate the existing users about ALYFTREK's availability.

# Charles Wagner Executive

Sure. Absolutely. And I would say the CF community is sort of among the most well-educated patient communities, I think, of any disease area. That's particularly true in the U.S., but

increasingly so in countries outside the U.S. So whether you're talking about patients or the treating physicians, there's very little chance that they don't know about the availability of ALYFTREK at this point.

And we have said all along that TRIKAFTA is a fantastic medicine. Many patients do extraordinarily well on TRIKAFTA, but there is the opportunity to do better. And we think ALYFTREK is the medicine that provides that next level of bene!t for patients and a great pro!le all around, including once-a-day dosing, which obviously is convenient. We think that over time the majority of CF patients who are currently on TRIKAFTA or other medicines will switch to ALYFTREK. We are not sort of actively driving switching because we think it's a very important choice for patients and their physicians to make but we will support that as it occurs.

And again, we do think the majority will switch over time. We're not that focused on how many per se make the switch in this calendar year, but we will be reporting out in our quarterly revenues. People will have a sense of ALYFTREK revenues and therefore, a sense of uptake.

# David Risinger Analyst

Got it. And then could you comment on ex U.S. prospects for ALYFTREK as well?

# Charles Wagner Executive

Yes. Again, I think that -- I think there's a signi!cant opportunity. I think the experience with TRIKAFTA has been one where we secured -- I forget the number at this point, something like 50 reimbursement agreements in relatively short order, which I think shows the power of the pro!le of TRIKAFTA. Again, ALYFTREK with an even better pro!le, we think, is signi!cant. We've recently received approvals.

I think we just announced on Friday an approval for ALYFTREK outside the U.S. So great momentum there. In terms of uptake, it will require reimbursement discussions. So the approval alone isn't enough. We'll have reimbursement discussions that will be ongoing outside the U.S.

throughout the year.

# David Risinger Analyst

Got it. And then maybe we could pivot back to the pipeline. David, if you could paint the picture for type 1 diabetes in terms of the opportunity as you see it, the data sets that we should be watching for? And also comment on the scalability of the manufacturing.

# David Altshuler Executive

No, absolutely. And it's a super exciting program. I should say I trained as a diabetes physician, was a diabetes doctor at Mass General for a number of years before I focused entirely on science. And so one of the things I learned clinically a long time ago is there's no patient I've ever met with type 1 diabetes who doesn't consider the current state to be overwhelming life experience and not in a good way.

And the reason for that is because you have to monitor your blood sugar like every minute of every day. You have to -- in the old days, you have to inject yourself. Now you have a device that pumps and monitors. You have to think about every meal you eat and like what it's going to do and probably the most concerning thing is that if you have any excess insulin, you can have hypoglycemia and pass away.

And in fact, like I was talking to a young woman the other day who's in college and her mother has -- like her monitor is tied to her mother's phone so that if she has hypoglycemia, which he has and doesn't wake up, her mother's phone at home rings and she calls the front desk of the dormitory and they send someone up to try and save her life. That's what it's like to have type 1 diabetes.

So the idea that you could have a therapy that's a onetime therapy, perhaps where you can be o# insulin and have normal blood sugar is like a dream that people had. And what's remarkable is we bought Semma 5 years ago, Doug Melton, who was 1 of 14 university professors at Harvard moved full time to Vertex a few years ago, he was so excited about it. He spent 25 years developing this because his kids both have type 1 diabetes.

The current data for VX-880, as you know, which is in pivotal development, is that approximately 3/4 of the patients who we described and we will be updating at a clinical meeting this year at ADA were o# insulin with normal blood sugars. They all had severe hypoglycemic events, and they hadn't had any since the treatment.

The others all had substantial reductions in insulin use, although that they weren't o# insulin. And that led to the conversion of that Phase I/II trial to a pivotal trial, which will have 50 people agreed to with the regulators, 50 people, we will complete dosing this year. And then the endpoint has changed from removing hypoglycemic episodes to actually being o# insulin and blood sugar then with elimination of hypoglycemic events as secondary.

And that's remarkable sort of progress in the !eld so -- in the program. So we really couldn't be more excited about that. Now you asked about -- what about how would that be scaled? And I think that it's obviously the case that manufacturing cell and gene therapies is no trivial thing, but we've been working on it for years. And there's sort of 3 ways that we work on it.

The most near term, obviously, is we've just been working our manufacturing group to scale the current process, make it more e"cient.

And also, we have a site in Hampshire with -- that's being developed a factory basically to build it with Lonza, in addition -- and we already have an existing site, I should say, in Boston for manufacturing that already exists. And so we're building all that. But the other thing we're doing, which I think in the long run will have a lot of value is Doug and the rest of the science team is actually going through and saying, can we fundamentally improve the process. So the sort of scaling of the existing process is the current focus for the launch of 880.

But you can imagine by dissecting every aspect of this process, we believe we'll be able to substantially sort of make it more scalable, which will also, of course, be a competitive advantage if we've discovered things others don't know. And our goal is not going to happen in a year or 2 is to treat 1 million people. There's 3 million people in the U.S. and Europe with type 1. I can't imagine one of them who, if it was e#ective and safe enough, would choose to be treated with insulin treatment if they could be cured.

# David Risinger Analyst

Excellent. That's a great framework, and we look forward to the progress. So the next data readout?

# David Altshuler Executive

So we'll be describing data for VX-880, there'll be an update at ADA. And then we also have VX-264. One thing I didn't mention is, obviously, I focused on the cells and that in the last answer because the cells are the key. If you can't make -- if you can make islets o# the shelf and you can manufacture them at scale, there's lots of ways to !gure out how to deliver them to patients but obviously a critical issue since they're allogeneic, they're not the person's own cells is how do you modulate the immune system.

In the case of VX-880, it's traditional, transplant immunosuppression. And the reason we did that was we wanted to limit the number of variables in the !rst clinical trial. That approach to immunosuppression had been used with cadaveric islets, so we knew that if we held that constant, we could see how our pilots did and they've done very well. But there's 3 ways we're working to improve that because that certainly has some properties that you could improve upon. One is the device that is now called VX-264, where the cells are put inside of a device and that device is then put inside of the patient.

And the device was invented by our team who was at Semma and now at Vertex that are still all there as the device has novel -- material novel design to try and keep the cells healthy and alive with the glucose going in, the insulin coming out and not have the kind of responses others have had. But there are 2 other approaches in parallel. So that data, I should say, 264 will be reading out this year, we'll read out some data on that. That's, as you know, in phase -- the Part B of the trial.

The other thing I should say is there's 2 other approaches. One is hypoimmune gene editing. That's conceptually very appealing, and we're the only company that has a CRISPR medicine approved, so we're good at gene editing. But nonetheless, it's picking the targets you need to edit. And I think it's going to be a little bit -- I don't want to overpromise, like I think anyone who claims you can like knock out 1 thing, \[ press \] 1 thing and evade the entire immune system is oversimplifying the e"cacy of the human immune system after 100 million years of evolution.

But we're working on it. And we, in fact, are investing the time and money to discover those targets not just sort of moving forward. And then !nally, as you all know, immunomodulators are now a very hot area of development. So there's actually immunomodulators we might be able to use in place of the standard immunosuppression that might already exist. We don't have to invent them or develop them.

And that's another way to try and improve the pro!le for patients. So it's de-risked in terms of the cells, obviously, a huge amount to do. And also there's multiple ways that we can get to modulate the immune system so even more patients can bene!t.

David Risinger Analyst

Excellent. Thank you. So why don't we pause for a minute. I just wanted to see if anybody from the audience has any questions. .

Unknown Analyst Analyst \[indiscernible\]

# David Altshuler Executive

We haven't like said exactly...

# David Risinger Analyst

Say the question...

# David Altshuler Executive

I'm sorry, the question was how big is the device for type 1 diabetes. We haven't said exactly, but it's of a scale that it could be straightforwardly put in patients and they would live a normal life.

# David Risinger Analyst

Any other questions from the audience? Okay. Maybe we could pivot back to a few !nancial questions. So obviously, you've described the fact that volumes are going to dramatically outpace revenue initially for JOURNAVX. Could you just discuss that a little bit more and what we should expect you to comment on with respect to painting that picture when you report quarterly results.

# Charles Wagner Executive

Yes. It's -- I think it's fairly straightforward. So JOURNAVX is included within our revenue guidance for the year, a range of $$ 123$ billion to $$ 12$ billion. We have said that we expect the contribution to really show up in the second half of the year. The reason for that is that we don't have broad coverage right immediately after approval.

So while we are working urgently to gain coverage, we would like patients and physicians to have access to the medicine, and we'd like them to have a seamless clean experience.

So we have !nancial assistance programs in place that will allow patients to access the medicine even ahead of payer coverage. That's why volumes will ramp ahead of revenues. As payers provide coverage for JOURNAVX, those assistance programs will fall away. They're temporary. And as those fall away, then we'll achieve a kind of a more normalized gross to net revenue run rate in the second half of the year.

And as I mentioned, we will -- in our quarterly results when the numbers are big enough, we will report out on JOURNAVX revenues.

# David Risinger Analyst

And what about payer coverage? So is that something you'd be able to speak to?

# Charles Wagner Executive

Yes. I think in the early days of the launch, just so that folks have a sense of progress, we will provide data on prescriptions and we'll provide data on payer coverage.

# David Risinger Analyst

Excellent. And then maybe looking beyond this year, and I know that you don't provide longterm !nancial guidance, how should we think about the company's margin prospects? So gross margin would seem to have some upward pressure given obviously what's happening with ALYFTREK and that uptake, but also CASGEVY drives some downward pressure, although very modest at this point. Could you just contextualize that for us?

# Charles Wagner Executive

Yes. I mean the good news is, I think the strategy of the company lends itself to a really attractive !nancial pro!le, both top and bottom line as we work to transform these disease areas with transformative therapies that equates to tremendous value for patients, values for health systems, but also values for Vertex, if we price responsibly.

So each of our disease areas that we select, we think, can provide signi!cant top line growth and attractive margins. In the shorter term, it's -- I think it's natural when you were in the early days of a launch of a product, there are !xed costs that you've put in place, either with the sales organization or manufacturing capacity that have to get absorbed as volume grows. So to your point, if you look at the dynamics for 2025, the margin pro!le for ALYFTREK is better than the margin pro!le for TRIKAFTA because of lower royalties.

So the amount of the bene!t to Vertex will depend on the rate of ALYFTREK growth and switching during the year. O#setting that is margin pressure from CASGEVY, which is very early in its launch and from JOURNAVX, which is very early in its launch. So we see a balancing, if you will, in 2025. Over time, we think each of these disease areas is going to carry attractive margins that are going to allow us to continue to grow and reinvest in the business.

# David Risinger Analyst

Excellent. Well, we are out of time. Thank you so much both for being here with us today.

Really appreciate it.

# Charles Wagner Executive

Yes. Thank you very much, Dave for having us.