Vertex Pharmaceuticals Inc 2026 Q2 Earnings Call

My name is Susie Lisa, and as the Senior Vice President of Investor Relations, it is my pleasure to welcome you to our second quarter 2026 financial results conference call. On tonight's call making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's Chief Executive Officer and President, Charles Wagner, Chief Operating Officer and Chief Financial Officer, and Duncan McKechnie, Chief Commercial Officer. We recommend that you access the webcast slides as you listen to this call. The call is being recorded, and a replay will be available on our website. We will make forward-looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission. I would also note that select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. I'll now turn the call over to Reshma.

These statements, including without limitation, those regarding Vertex's marketed medicines for cystic fibrosis, sickle cell disease, beta thalassemia, and moderate to severe acute pain, our pipeline, the proposed acquisition of Crinetics Pharmaceuticals, and the expected benefits of that transaction and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially. I would also note that select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. I'll now turn the call over to Reshma.

Thanks, Susie. Good evening all, and thank you for joining us on the call today. Vertex's second quarter performance was excellent with strong momentum in the commercial portfolio, rapid progress across our R&D pipeline, and the announcement of the definitive agreement to acquire Crinetics Pharmaceuticals, which brings rare endocrine diseases as a fifth pillar to Vertex. Second quarter total revenue grew 12% year-over-year, driven by the strength of our cystic fibrosis portfolio and the growing contributions from our newer products, CASGEVY and JOURNAVX. As I've previously highlighted, this is a year of execution for Vertex across commercial, clinical, and regulatory, and on each of those fronts, we advanced significantly in the second quarter. Commercially, we delivered strong revenue growth across all diseases, made meaningful progress in reimbursed access, and continued to execute on near-term launch planning to drive the next phase of growth.

Clinically, we continue to make significant progress in advancing our pipeline, including completing enrollment in the AGLOW phase II study of VX-407 in ADPKD, tracking to complete enrollment in the AMPLITUDE phase III study in AMKD by the end of this year, and reporting results from the interim analysis cohort of AMPLITUDE in the beginning of 2027. We also remain on track to release results later this year from a proof of concept study in DM1 and an expanded population for AMKD in the AMPLIFY trial, as well as the initial patient data from VX-828 in CF. On the regulatory front, the BLA for Povi and IgAN was accepted in the U.S. with a November 30th PDUFA date. We achieved expanded labeling in record time for CASGEVY in patients ages two to 11 in the U.S.

I'm very pleased to share that as we continue to dose the phase I/II/III study of zimislecel in type 1 diabetes, the IND was cleared for the blood type O islet cells in our T1D program, VX-017. We expect initiation of the VX-017 phase I/II study in the near term. Finally, with the announced acquisition of Crinetics Pharmaceuticals, we look forward to multiple benefits of the deal. Establishing a fifth pillar in rare endocrine diseases, adding to our innovative R&D pipeline, accelerating revenue growth, and enhancing long-term earnings. Tonight, I'll limit my R&D comments to new news in CF, renal, and type 1 diabetes, and close with some additional remarks regarding the Crinetics acquisition. Let me start with CF, where we continue to extend our market leadership. Data we presented at ECFS reinforced that ALYFTREK best restores CFTR function amongst the available CFTR modulators.

In particular, among children with CF under 12 years of age, the majority across all eligible genotypes achieve a sweat chloride less than 30 millimoles, which is the median among CF carriers. This is remarkable because at these sweat chloride levels, CF carriers do not exhibit the manifestations of disease. In addition, we have initiated global regulatory submissions for ALYFTREK in children ages two to five. Global regulatory submissions for TRIKAFTA in patients ages one to two are also in progress. Turning to our next wave in CF and VX-828, our next generation 3.0 CFTR modulator recently completed dosing in the patient cohort and data are expected in the second half of this year. Behind VX-828, we continue to advance additional correctors in the next gen 3.0 family, and both VX-581 and VX-272 are in healthy volunteer studies. Let me close on CF with this.

Our ultimate goal has been consistent for two plus decades: to bring patients to carrier levels of sweat chloride. Frankly, ALYFTREK's remarkable results, where nearly two-thirds of younger patients achieved sweat chloride levels less than 30 millimole per liter, and for patients ages 12 plus, more than 75% achieved sweat chloride levels within the carrier range of CFTR function means we are very close to that goal. Given the improvements in sweat chloride, ppFEV1, pulmonary exacerbations, hospitalizations, lung transplant, and survival that we have seen in patients in clinical trials and/or the real world, we recognize that the unmet need is far lower today, and the bar for any medicine to beat ALYFTREK is very, very high. Thus, as we develop our next gen 3.0 and beyond programs, we will evaluate multiple regimens in phase I and cohorts of patients with CF.

We will only advance assets into phase II and beyond that show promise to beat ALYFTREK. In other words, to bring even more patients to sweat chloride levels less than 30 across all genotypes with once daily dosing and excellent drug-like properties, including drug-drug interactions. Anything less would not be competitive. Moving now to our renal franchise, where we have four programs in mid- and late-stage development. Povetacicept in IgAN and primary membranous nephropathy, inaxaplin in APOL1-mediated kidney disease, and VX-407 in ADPKD or Autosomal Dominant Polycystic Kidney Disease. Let me start with the most advanced program and significant milestone. In late May, the FDA accepted our BLA for Povi and IgAN and assigned a PDUFA date of November 30th of this year.

As a reminder, the RAINIER phase III interim analysis was a home run, delivering statistically significant and clinically meaningful results across the primary and all secondary endpoints with a favorable safety profile and consistency in the primary endpoint of change from baseline in proteinuria across all groups. We are in the final stages of launch readiness. Duncan will provide more details regarding our approach and excitement to go to market with Povi's differentiated profile of potentially best-in-class efficacy, a well-tolerated safety profile, and patient-centric administration through small volume, once monthly dosing via an auto-injector at home. We are also advancing Povi internationally. We have completed the regulatory submission for accelerated approval of Povi in IgAN in Saudi Arabia, where Povi has received breakthrough designation. Turning to Povi in membranous nephropathy, our OLYMPUS Phase II/III pivotal trial is well underway.

The phase II portion is complete, the phase III portion initiated last quarter. I'm pleased to share that the IDMC has completed its review and selected the phase III dose, 80 milligrams subcutaneously every four weeks. We hold fast track, orphan drug designation, and EMA Prime designations for Povi in membranous. Stepping briefly outside of renal, on Povi in myasthenia gravis, I'm also pleased to share that the 30-patient, phase II proof of concept study is on track to complete enrollment by the end of this year. Recall, this study evaluates 80 milligrams and 240 milligram doses of Povi versus placebo for 12 weeks. Turning now to inaxaplin in AMKD. On AMPLITUDE, our pivotal phase II/III study in AMKD, we completed enrollment of the interim analysis cohort in September of last year and are on track to complete full enrollment by the end of this year.

The interim analysis will be conducted following 48 weeks of treatment, we remain on track to share these IA results in early 2027. If positive, we would be positioned to file for potential accelerated approval in the U.S. thereafter. AMPLIFIED is our phase IIB basket study of inaxaplin in AMKD patients with either lower proteinuria or AMKD patients with diabetes. Expanded patient populations not studied in AMPLITUDE. The AMPLIFIED study has completed enrollment and dosing, and we expect to share results this fall. Lastly in the renal portfolio is VX-407 in ADPKD or Autosomal Dominant Polycystic Kidney Disease. Our AGLOW phase II study has completed enrollment. This is a proof of concept study with up to 52 weeks of treatment. We are excited about the potential for VX-407 in ADPKD and look forward to sharing more information as dosing continues and the data matures.

Let me now touch on type 1 diabetes. We had very constructive meetings with the FDA following our voluntary pause in order to conduct a manufacturing analysis of exemlcel. As we shared on our Q1 call, we have resumed dosing patients in the exemlcel phase I, II, III study. The new news today is that the FDA has cleared the IND for VX-017, our type O or universal donor cell product. VX-017 has a similar target product profile to exemlcel, but is designed for people of all blood types, and we expect the VX-017 phase I, II study to initiate in the near term. By designing and bringing to market VX-017, another allogeneic, off-the-shelf, glucose-responsive, insulin-producing, fully differentiated islet cell therapy, in this case, for any blood type, we anticipate doubling our market opportunity from about 60,000 to about 120,000 patients.

A silver lining to the pause we took in the exemlcel type A program is that the type O program time differential versus exemlcel has shortened. Type O is making rapid progress, and thus we are considering options to further streamline our regulatory strategy and commercialization approach. We expect to provide updated T1D plans, including timelines, later this year. We also continue to progress our serial innovation work focused on improved immunosuppression and hypoimmune programs to make our potentially one and done curative therapy available to even more patients with type 1 diabetes. Let me close with a few words on our announced acquisition of Crinetics Pharmaceuticals, which we detailed in a separate call last month. Crinetics is an excellent strategic fit for Vertex, with its focus on serious endocrine diseases, high unmet need, validated targets, and well-understood causal biology, as well as a strong people and culture fit.