Joining us this morning at our Cantor Global Healthcare Conference. Really excited to have another year of it. My name is Olivia Brayer. I'm a senior biotech analyst here at Cantor, and we're really excited to have the Vertex IR team with us. We have Susie Lisa, who is a senior vice president, and Manisha Pai, who's a executive director of IR. Thank you guys so much for being here.
Thanks, Olivia. Thanks for having us. Yeah.
Of course. Well, just to kick it off, I mean, I think everyone in this room is very familiar with the Vertex story, so maybe just give us a sense of, you know, the state of Vertex today and the direction that the company's heading.
Sure, and thanks again for, for having us. I'll start there. I think it continues to be a really exciting time at Vertex, with a lot of strong momentum. Maybe to start with our commercial execution in CF, where we reported just last month, and our Q2 results were very strong across the board, and we raised guidance by $100 million, so now we're calling for $10.65-$10.85 billion in total product revenues. That's 9% growth at the midpoint, so continued strong performance in CF. And then, too, I think, as we continue to execute commercially in CF and then adding in Casgevy, where we're providing early metrics on ATCs that we've authorized as well as patient cell collections, good progress there.
And we're really excited for continuing this new era of commercial diversification with the announcement that we had submitted and had two NDA filings accepted, and both are under priority review. So one is our vanzacaftor triple with a PDUFA date of January second of 2025. That's in cystic fibrosis. And then the second is suzetrigine for moderate to severe acute pain, and that's a PDUFA date of January thirtieth of 2025. So look, really excited to potentially two new launches in early 2025. And then from continued development of the pipeline, I'd say broad strength, making good progress, and three things that we highlighted: One is that also in our pain franchise on the chronic pain or peripheral neuropathic pain side of things, we accelerated the timelines for results of our phase II study in lumbosacral radiculopathy, or LSR.
We'll now have results by the end of this year, which previously said we'd just complete enrollment, so we saw faster enrollment there, which is always a good thing. Then we also announced in VX-880, which is our Type 1 diabetes cell therapy, that we have completed enrollment and dosing in the first cohort of our phase I/II study. That's 17 patients. We added an additional 20 patients with regulatory endorsement of that as we move towards pivotal development. And then finally really excited, post our Alpine acquisition earlier this year, povetacicept, we began the phase III in IgAN last month. So good progress across the board there and more to come.
Yeah, you guys have a lot going on, obviously. Busy... It's gonna be a busy 2025, and I'm sure for all of us covering this story. You know, I do wanna start with pain, just because I think there's a lot of interest in pain. Maybe just to start, describe the excitement around the broader pain portfolio at Vertex today. You know, how you guys think about it fitting into your growth strategy going forward.
Yeah. So pain is definitely... We think we have multi-billion dollar potential essentially across our pipeline, but pain is really exciting for many reasons, one of them being the public health crisis with the opioid epidemic, the opportunity to help solve that. Secondly, is the undermanagement of pain. But then, from a financials perspective, we think, you know, it's just massive patient numbers here, and with that unmet need, we see multi-billion dollar market potential, both in acute pain, where we have the PDUFA date, as I mentioned, next January, as well as in peripheral neuropathic pain, which is a segment of chronic pain that we are initially targeting. And I think that, our initial product, suzetrigine, which we're studying in both acute and the peripheral neuropathic pain market, is a selective NaV1.8 channel inhibitor.
So we're stopping pain where it occurs in the peripheral neurons, and because of that, we don't have any central nervous system effects. So you avoid all the side effects of opioids, including brain fog, constipation, nausea, et cetera, and there is no evidence of any sort of addictive potential. And so I think that combination of effective pain relief without the side effects of opioids and the fact there's been nothing new in pain for two decades is a really exciting time for us. There are eighty million Americans who get a prescription for acute pain every year. There are ten million who get a prescription for chronic pain every year, so massive patient populations, and suzetrigine is just the first. We continue to deploy our serial innovation strategy.
We're already in the clinic in VX-993, which is a next-gen, in addition to we think it could enhance some of the properties of suzetrigine, it can be formulated IV, so we kind of own the pain across the entire experience, and it can also be combined with a future NaV1.7 inhibitor, which suzetrigine cannot.
Yeah. Well, a bit of a, you know, it's a little early to ask this question because you don't actually have a drug approved yet, but what inning do you think we're in in terms of just transforming the overall, you know, pain treatment landscape? I mean, obviously, we'll have to see what happens and how it plays out with the commercial launch, but, you know, like you said, you do have this sort of first-generation agent. You are developing next generation-... potentially combination agents? I mean, where do you think we are today in terms of actually, you know, in the development stage for being able to tackle this landscape?
I think you laid it out exactly right. We're in the early innings, and it's really exciting. With a potential launch early next year with suzetrigine, which is our first gen. I know our CF team out in San Diego, which is the same team developing pain, talks about this feeling like in pain, where we were with Kalydeco ten years ago. So we think it could be that sort of potential. So NaV1.7 activates, and then NaV1.8 propagates. So the thought of having both agents, either singly or in combination, I think is really compelling to continue to enhance the level of pain reduction, all of which are acting in the peripheral neurons, and so again, you avoid that addictive potential. I mentioned briefly that there's been nothing new in this space for twenty years.
Obviously, there's trust issues in the market.
Mm-hmm.
There's the opioid epidemic, and then this chronic mismanagement or under management of pain, given all the restrictions and guidelines in reaction to the opioid epidemic. So we think there's significant potential, and the word you used is exactly what we're trying to do. We're trying to transform fundamentally and forever the treatment of pain.
Yeah, and you mentioned, you know, acute and chronic both pain categories, but obviously very different. And I know you laid out some numbers. Those are helpful. I mean, how do you think about those two in terms of areas of priority, in terms of... You know, obviously, commercial potential is a big part of the conversation, but really just your level of conviction, right? Whether it's acute, whether it's chronic, whether it's maybe both, but do you have a higher level of conviction in one of the areas over the other? You know, whether it's commercially, whether it's clinically, you know, where you feel like your wheelhouse as Vertex will be, you know, in this broader pain market.
Yeah, the true answer is that we have equal conviction in both markets, right? I think a lot of investors say, well, for every one... And it's true, for every one chronic pain patient that you get, a PnP patient, right, you have to go find twenty-six acute patients, right? The average prescription length in acute is about two weeks, but there are eighty million acute patients, right, and there are ten million peripheral neuropathic pain patients. So, and again, I think you know, there are a real need, I think, particularly on the acute side, where patients who have nothing, they have a... Their lives are perfect. They go, they have a trauma or an injury or a surgery, and they develop opioid use disorder, and they die, right?
It is a real issue, and so to be able to avoid that, I think is really exciting. And we intend to fully develop both of these markets at Vertex. We see them both as specialty markets. And longer term, given the mechanism of action, we know from our predecessor molecule, VX- molecule, VX-150, that it did have positive proof of concept in musculoskeletal, but that is something we'd look to partner with, given that that is a primary care market, and we're more focused on the specialty aspects of this market.
Okay, understood. So for the specialty aspects of the market, there's no plan to potentially partner them out at this point. They are wholly owned programs-
That's right.
As you're going forward.
Our field force... You didn't ask this, but maybe just to jump to the next topic, our field force has been hired, right? And sort of our leadership and strategy team has been on board a while, but in June, we completed the hiring and training of our field force. So they are in the field now, and we've talked about that 80 million patients, split into about half, is an area where we won't focus, and that's prescribed in the physician's office market. The other half is, the prescription originates in an institution. It may be inpatient, outpatient, or ambulatory surgery center. That's about 15% of that 50%, and the other 35% is in the discharge segment. So the script is written in an institution of some form, but you fill it at your retail pharmacy going home.
So we will focus this field force on high-volume procedures, where there is a heavier component of pain relief needed at home in the discharge segment because we think that'll be potentially faster uptake from a... working through the system of payer coverage, discharge orders, et cetera. We could see faster uptake there, but we're convinced in the opportunity across the board over time.
Yeah, and you mentioned the payer coverage. Obviously, PBMs and reimbursement is going to be a really important part of that commercial launch. So where are you in terms of those conversations? I mean, I know a lot of them happen once you're actually approved and on the market, but is there legwork that you can be doing now or are doing now as a company to set yourself up for success when it comes to the coverage side of the equation?
Absolutely, yes and yes. So those conversations are underway, have been underway, recognizing the timelines that are required in this market for whether it's a hospital formulary P&T committee, or it's a payer who puts a six-month moratorium on any new branded medicine, right? But we are having these preliminary conversations through pre-approval information exchange, very formalized, compliant method of having these conversations. And as our Chief Operating Officer, Stuart Arbuckle, will say, "There is no one that we've had a conversation with that isn't excited about the potential for something new in pain that's non-addictive and provides effective pain relief," back to where your question started. So we're pleased with those. We said that it will take time to work through this market, but I think we continue to be increasingly excited about the potential.
Yeah, and then you mentioned earlier, you do have a PDUFA date coming up. The last I heard was FDA was not requiring an AdC om. Any update there, or is that still the latest that you all have heard?
That is still the communication, that they do not intend to host an AdCom. They can change their mind anytime up to the PDUFA date, but the communication continues to be that they don't expect to have one.
Okay, great. And then in acute, you know, the goal, and you guys have spoken about this many times, but the goal is to get a broad label. But there are a lot of different sort of subcategories, right, within the acute setting. So when you think about the biggest concentration of patients, the areas that you want to tackle first, I mean, what are some of those? Maybe subcategory is the wrong word, but what are some of those sub-indications within acute pain that are the highest priority areas?
Sure. So maybe just to step back for a sec, we do think this broad, moderate to severe acute pain label is critically important. There have been other launches recently in pain, but they've been very indication or, or procedure specific.
Mm-hmm.
This broad label not only enables us, as we studied, right, abdominoplasty, bunionectomy, and then an all-comers trial, but it also enables us to tackle that discharge segment, which is the majority of the kind of institutional script writing, but then, as I mentioned, within that, we're focusing on high volume procedures where there's a heavy discharge component to the pain therapy, so if you want to think orthopedics, some general surgeries, ER physicians, we're also targeting anesthesiologists, pain specialists, et cetera, so those are the areas of focus.
Okay, understood, and then you said, again, you mentioned earlier, but you guys did pull up timelines for your phase II LSR readout. That's now expected in the fourth quarter. I know everyone in this room is highly anticipating those data, myself included. You know, maybe just help us, you know, help frame what we're looking to see in that study, what you all plan to present, maybe how you all plan to present that data. I know that's top of mind for a lot of people as well.
Sure. Yeah, we're really excited about the opportunity in chronic pain and peripheral neuropathic pain. We will begin this month our phase 3 in diabetic peripheral neuropathy, which was the first indication we tackled within peripheral neuropathic pain, which, as I mentioned, is about 10 million patients. 2 million of those are DPN patients. LSR, lumbosacral radiculopathy or sciatica, is the largest patient population. It's about 4 million patients. So between these two indications, again, ultimately, our goal here would be a broad peripheral neuropathic pain label if we have positive studies in 60% of the patient population. But.
Maybe I'll ask you before we get to the LSR readout. For that phase III trial, how are you guys thinking about enrollment timelines?
We haven't said, because we're just beginning now, but we'll update as soon as we have a better sense of the enrollment dynamics.
But you could announce it here.
I think we need to-
Next year
... start before we're ready to give a timeline, but that is a thousand-patient study, right? It is a larger study, and we're excited to get going, but we haven't given timelines. On LSR, one of your questions, we'd expect to release top-line results in a press release, as we did with DPN last December, and the study is looking at... It is roughly two hundred patients. It is randomized, double-blind, and there is a placebo arm for comparison. There's nothing specifically approved in LSR, and hence the placebo control arm, and what we're looking for really is the magnitude of treatment effect so that we know how to size, appropriately size our phase III study.
We are looking, just to be clear, at within-group change from baseline to through the end of the study, which is a twelve-week study. There'll be that change in NPRS score. It's a leg pain score on a numerical pain rating system, that within-group change, for the LSR arm, and then within-group change for placebo. We'll have two numbers, and then we'll look at how they're not powered to be compared directly, but we'll have those, to help, because placebo effect is a very real thing in these studies, as you know.
Yeah. And I know it'll be a press release, but for your, you know, initial phase II chronic readout, when was that? Last year, maybe December?
December, yeah.
You did have a call, you did have slides, you did actually show, you know, the change-
Curves.
-time, curves.
Responder analysis, et cetera. Yeah.
So again, I'm giving you the opportunity to tell us all today.
Um-
Is that the plan as well? I mean, to-
I think we-
-to sort of give that level-
Yeah
... of detail.
Frankly, we always look to be as transparent as possible, so we'll look to make it as helpful and informative as we can. I will say a secondary endpoint is sleep interference, which has been another endpoint that had been in other prior LSR studies. So typically, we cover the primary and then the key secondary endpoints, and more to come.
Okay, understood. And then you did mention that it is, you know, versus placebo, but no statistical comparison, right? It is a single dose-
Mm-hmm
... study-
That's right
... if that's correct. So how are you guys thinking about... I know we'll have to wait and see what the data look like, but in an ideal world, the data, you know, meet maybe the internal bar for success, whatever that may be. How do you think about what the phase III will eventually look like?
I think, I guess maybe the closest I can come to answering that is similar to what we did in acute pain, in a pursuit of a broad label. Here, you can think that we'd like to try and do the same thing. So potentially a similarly sized study to the DPN phase III.
Yep.
And then with those two indications, perhaps an all-comers in particular. But it's really early, and we are not at that point for us to opine, and then obviously, we need to meet with the agency. But in theory, that could be one avenue.
Sure. What about potential timeline for initiating a phase III? I mean, you'll have data, you know, in hand, maybe even in the next few weeks, couple months, and then obviously, you know, by the end of the year-
Yeah
We'll see it publicly. But how do you think about, I mean, similar timelines to between phase II and phase III start time for-
I think, yeah, DPN Phase II-
DPN
- results in December, and then starting in Q3. There's always a sense of urgency at Vertex, so-
Sure.
Yeah, and I think we're really excited about this opportunity, but stay tuned.
Obviously, we would have to meet with the regulators to talk about what that study timeline would look like.
Yeah, FDA tends to slow things down, I'm sure. Okay, great. Well, I know we're all looking forward to those data. And then I... Maybe last question on pain is, you know, I know you guys have the NaV1.8, NaV1.7. You've obviously talked a lot about sodium channel blockers in general. What about other mechanisms that you could potentially use to treat pain, right? I mean, is sodium channel blockers, is that kind of the wheelhouse that you guys are hoping to continue with the next generation, and the next generation, and the next generation of pain products? Or are there other, you know, MOAs out there that you guys are interested in exploring?
I think our view is that it really is kind of the holy grail, is the term we'll use, of pain inhibition, and given that you're essentially inhibiting right at the source, and to avoid any sort of CNS impact or all of those side effects, but where we'd like to go beyond just suzetrigine inhibiting 1.8, right, as we talked about, is continuing to serial innovate along 1.8, so IV and better potency, et cetera, and then with to inhibit as well the 1.7 channel, which actually activates the whole system, you could see that used singly, we think, or definitely in combination for more effective pain relief, so there's a whole pipeline.
As I mentioned, we're already in a phase I study in the IV formulation for VX-993, and then we're getting underway for two studies, both in acute and PnP for 993 as well, and then there are follow-on molecules, and then we'd hope to have something to talk about in NaV1.7 over the, you know, coming quarters, if you will, and then move on to combo beyond that.
Yeah. Well, looking forward to all the progress that you guys are making in pain, and all the progress to come. Maybe we'll switch gears to Casgevy, obviously another area of... that we get a lot of questions on. I'm sure you all get a lot of questions on. I mean, maybe I'll just come out and ask it. Have any patients been infused with Casgevy?
Yeah, so we have begun infusing. But as is our practice, we'll provide updates on launch progress on our quarterly earnings calls, specifically on patient cell collections and ATCs activated.
Okay, understood. Stay tuned. And then fertility preservation has been a big topic of conversation, and I think a lot of people maybe view it as a gating factor. I mean, how are you all thinking about fertility preservation in and maybe that's not just me coming up with that, right? But I know you all have been blocking and tackling, so to speak, around that as well. So how does fertility preservation come into play? How has that sort of, you know, gotten better as the launch has gone on, and how do you think about fertility preservation, you know, as you try to have a successful commercial launch there?
Yeah. So it's a hugely important question for any of the genetic therapies in the hemoglobinopathies space.
Yeah.
The busulfan conditioning that is used to make space in the bone marrow for the edited or otherwise, you know, adjusted cells, is a chemotherapy, and it can cause infertility, and so it's a hugely important issue. For our patients with commercial insurance, eligible patients, we have a fertility preservation program in place. We'd like to be able to do the same for patients with government insurance, and we are working toward that goal, but as of right now, we are not able to do that.
Okay, understood. And then, Manisha, remind me, for the revenue recognition, right? Obviously, you sort of initiate that cell collection process. I know it's a lengthy process. You know, eventually, you infuse a patient. Where along the way does that revenue recognition happen for Casgevy? And then, you know, as kind of a follow-on question to that, when you do plan to provide an update on your third quarter earnings call, you know, maybe give us some insight into, right? I mean, I assume if there is a patient that's been infused, we'll get some sort of revenue breakdown. Will you give us the number of patients that have officially been infused? I mean, what level of granularity will we get around, you know, the revenue recognition, obviously, but obviously, patient numbers?
Sure. So revenue recognition happens at infusion. I don't think we've said one way or another yet whether we will report out on the number of patients infused, but of course, you would see it in revenues. We will probably still focus on the launch metrics that we set forth at the beginning of the year around ATCs and cell collections. And the second part of your question was? I think you got it.
Well, yeah.
Okay.
Just revenue recognition-
Yeah
... which you answered. Okay, understood. And then obviously, it is an expensive franchise, to say the least, and I know you guys haven't necessarily come out with when you expect to hit profitability, but how do you think about spend around the franchise? Are you comfortable with what you're currently spending around the franchise? And then, you know, maybe to that profitability question, you know, is there sort of a target year when you hope to hit profitability? Or maybe it's a sales figure, or whatever you can tell us around, you know, profitability for that franchise.
Yeah. So I think, you know, with bespoke therapies like Casgevy, they're necessarily going to be a bit more resource intensive than, say, a small molecule therapy would be. You know, we are very excited by the physician and patient interest that we've had, the payer engagement that we've had. And as Stuart, our Chief Operating Officer, said on the last quarterly earnings call, you know, it's becoming more and more clear to us that Casgevy has the potential to provide transformative benefit for many patients around the world and become a multi-billion dollar opportunity. Having said that, we are not gonna give guidance right at this point on long-term profitability and time-
... Okay, but safe to say it's still an area of priority for the company?
Absolutely. And one thing, if I could just add, is as we look at the portfolio over time, right? There's a compelling mix of gene therapies and cell therapies, which certainly don't have the same margin profile as small molecules.
Mm-hmm.
But there is, you know, all the pain therapies, AMKD. Povetacicept has attractive margins in addition to CF, so we think the overall portfolio over time offers us, you know, obviously compelling opportunities for patients and the revenue opportunity, but then an attractive margin profile as well.
Sure. Well, let's talk about povetacicept. I mean, big acquisition for you all, something we don't see often from the Vertex team. So maybe just talk through, you know, why you decided to make that acquisition, why you felt like it was the right time, and really how you think about IgAN, right? And your potential, you know, opportunity commercially in the IgAN space.
Sure. So the Vertex approach, I think, can look, from outside a little disparate in terms of our disease areas, but it's a really strict-
Mm
... corporate and R&D strategy to focus on what we call sandbox disease areas, which have a strict set of criteria. And the IgAN space had been in our sandbox. But the approach that we bring in terms of internal programs, that same set of criteria is what we apply to looking at M&A. And I think given the confidence in our pipeline, frankly, we haven't felt the need to chase later-stage assets, or to get in competitive situations with companies that are facing LOEs, given the patent protection on CF. But we had been watching very closely the development in the IgAN space, and I would say B-cell-mediated diseases broadly.
Mm-hmm.
What we do from an M&A perspective is look at things that can accelerate our existing programs or help us establish a presence in key sandbox disease areas where we don't have one. On the acceleration side, Entrada deal we did in myotonic dystrophy type 1 is the best example, and then on the establishing a presence, Semma Therapeutics in T1D, and now Alpine Immune Sciences in IgAN and other B-cell-mediated diseases is a great example of that. It was phase 3 ready. As you know, we're already in phase 3 as per last month, and I think there is a lot of work being done in this space, as everyone knows, but there were multiple factors that led us to make the decision about Alpine.
First was we think the dual pathway inhibition of both BAFF and APRIL is very important in this disease area and others. Secondly, we were really excited by their preclinical data, where we think there is evidence of greater potency. Thirdly, the clinical data, admittedly small n's and early, but continue to see, I think, remarkable reductions in proteinuria and hematuria. And then, two, I think in this market where potentially could be competitive, delivery is an important part of it. So subcu every four weeks, 80 mg, smaller volume, I think that could be important from a patient factor and convenience aspect. And then also, I think just the breadth of the development program and their clever designs for their basket studies, all of that was what was compelling to us. And we're really excited the integration is essentially done.
We're off and running, and excited to have started the IgAN study and more to come on the other indications as well.
Yeah. Congratulations. Trying to figure out a PC way to ask this, but were there other companies that were potentially in the running in IgAN? Because it is a very competitive space. There are a lot of companies that are developing assets. I mean, I understand the rationale, but were you all looking at other companies? Were there other companies that maybe you were considering in IgAN?
I think that, at Vertex, we pride ourselves on leaving no stone unturned, right? And doing all the research we need to do. There's been a lot of data publicly available in this space over some time, and so really, it was all the factors that I mentioned previously about Alpine, that we felt it was the clear winner, where we wanted to place our bets and acquire Alpine. So, we're really excited about the opportunity.
Okay, great. And, like I said earlier, you, you all don't do M&A very often, at least in a bigger, maybe more public setting. Is that something that we should expect to see more from, from the Vertex team going forward?
I think we actually have had a consistent drumbeat of it, but they've been smaller deals, and so I mentioned we apply the sandbox criteria to what we're looking at, just as strictly as we do internally, and truly, size within that is not one of the criteria. Just typically, though, it has been earlier stage and thus smaller dollars, but I wouldn't say that we're precluded from doing something like this. I mean, given povetacicept and its pipeline, and a product potential-
Mm-hmm
... there's a lot to chew on there for a while, just from sort of a management time and expertise and gaining full leverage from that asset. But from a cash flow perspective, $5 billion there still leaves us with about $10 billion, and we'll probably replace the cash that we spent for Alpine within about a year's timeframe. So we'll continue to look to be acquisitive, but really, size is not one of the key criteria. It could stay small, it could be large again.
Understood. And then the other program that you guys are focused on, and have had some interesting data in, is diabetes, obviously, right?
Mm-hmm.
You do have two programs there. You have VX-880 and then you have your islet cell program. Maybe just give us an update. I know you had some data at EASD.
Yeah.
Where do both of those programs stand, and what should we expect next, right, in terms of next data disclosures, et cetera, et cetera?
Yeah, sure. So to take a step back, we have three programs in Type 1 diabetes that we got when we acquired Semma Therapeutics, and they are all based around the same cells, which are the allogeneic, fully differentiated pancreatic islet cells. So the VX-880 program is what we call the naked cells program, and there, the cells are infused through the portal vein, and patients take immunosuppression to prevent, to protect the cells, essentially. And we think there's about 125,000 of these patients across North America and Europe.
We did share updated data from the phase 1/2 study at EASD on Friday, and what we saw was that four patients now have reached a year of follow-up, and all four of those patients have met the primary endpoint of elimination of the severe hypoglycemic episodes and an HbA1c below 7%, and then one of the key secondary endpoints, all four patients are now insulin independent as well, so that's very exciting. You know, next steps there, we've expanded the study with permission from regulators, from the original 17 patients now to a target of 37 patients.
Mm-hmm.
And, you know, we look forward to having those end-of-phase 2 meetings with regulators to talk about the pivotal path.
Second program, VX-264. We take those same cells, and we encapsulate them in a novel proprietary device to essentially protect them from the immune system, and the device is implanted in the abdomen. That is in a phase I/II study as well. It has completed part A, which was the sort of low dose of it to look at safety and tolerability, and now we're enrolling and dosing in part B of that study. And then the third program is the hypoimmune program. Once again, those same cells, but we gene edit them to cloak them from the immune system, and that is still in the research stage, so not too much to say about it yet.
Okay, great. Well, I know I went a little bit over time. Apologies for that. But, Manisha and Susie, thank you so much for joining us today. I really appreciate it. Great discussion. Ironically, didn't talk about CF today.
Oh, yes.
But, that's okay. Thanks.