Launch. We are now seeing the building of momentum as we build up that franchise. Most recently the launch of JOURNAVX in acute pain. We're keenly focused on those three launches as we also think about the next wave of innovation that's either in or nearing phase III development. There are three, actually four, programs that are already in phase III development and the fifth one, POVI in membranous, is coming very soon. As I look beyond that, we have programs like ADPKD in phase II. We're making rapid progress with the Nav1.7, which could be used alone or in combination with our Nav1.8 in acute or chronic pain. We're also making progress, for example, on things like improved conditioning for CASGEVY. The pipeline is keeping us quite busy.
As I look at the company and round it out, we're also scanning, scaling and growing to get to patients in the Middle East, to get to patients in Asia with our growing portfolio. I really like what we're doing with regard to our balance sheet and how we're thinking about capital allocation. Lots going on across the company, not just in launches, not just in the pipeline.
Maybe just to go forward on your comment on capital allocation.
Yeah.
How does business development or that lever play a role in the company right now? We saw you do a decently sized acquisition recently, but is that what we should expect from you going forward?
Yeah, I'm really going to sound like a broken record, Salveen. We really stay close to our knitting. Our approach to capital is to invest heavily in innovation, be that internal or external. That does not change. We have a share buyback program and you saw us re-up that a couple of weeks ago. That is fundamentally how we think about it. As we think about going forward, the balance sheet is strong. We have the flexibility to do what we think is right, but our strategy and what we are prioritizing does not change one bit.
Great. I want to ask you about 2025 guidance. You recently raised the lower end of your revenue guidance for 2025, implying about 8% growth at the midpoint. Walk us through in a little more detail the key growth drivers here, particularly in the context of these two launches, but also how you're thinking about the OPEX aspects of your balance sheet.
Yep, absolutely. As you heard me discuss on the Q1 call, we are upping the lower end of our guidance from $11.75 billion- $11.85 billion and the upper end remains at $12 billion, so we're going from $11.75 billion-$12 billion- $11.85 billion-$12 billion. As you point out, that implies an eight percent growth at the midpoint. That comes from largely CF. At this point, it is our biggest franchise and it continues to grow. It's growing as we serve more patients with ALYFTREK. The U.S. launch is underway. We have an approval in the U.K. and positive opinion in Europe with the CHMP. We're waiting on those launches to go on. We're also continuing with TRIKAFTA down into lower age groups and into the expanded population, those with ultra rare mutations. Lastly, we have growth coming through geographic expansion. Think Brazil. That's through the CF franchise.
Then we have CASGEVY. What we talked about is that this year we are seeing building momentum. We have about 90 patients who've had a first initiation of their cell collection. We have double that who have started, so they've been referred to a transplant center, they've been entered into the Vertex system to start to set them up for a slot allocation. Clearly there's some growth coming from CASGEVY. There is the new launch of JOURNAVX. What we've said there is the first half of the year you should see prescription growth. As we secure access and reimbursement, you should expect to see revenue growth in the second half of the year. As it pertains to OPEX, the guidance is $4.9 billion-$5 billion for the year, and we're on track for that.
What we talked about was it was kind of evenly spread in the first half and second half of the year. You should expect a little bit of an uptick in Q2 as we get ready to launch that fifth phase III program and then spread out through the second half of the year. That is sort of what the inside scoop and guidance both on revenue and OPEX looks like.
Great policy dynamics. I know Vertex doesn't really have as much exposure as some of your peers, but could you just touch on the policy environment and how you're positioning yourselves around it with regard to not just, you know, CF, where you have Medicare Part B and mostly Medicaid exposure, but the pipeline at large?
Yeah, it's a very fair question and it's a really tough question to address because we don't have a lot of facts and we don't have a lot of detail of what the policy considerations might be. If you try to draw a picture, and I'll keep this contained to how I see this for Vertex. Maybe what we can talk about is what is the exposure in the various segments? Insofar as CF is our biggest franchise, I'll spend more on that, but I'll just take off the—let me at least take the swipe at and a pass at CASGEVY. CASGEVY is a Type A Drug, so it's in its own sort of basket. I'll put it aside. JOURNAVIX is just getting going, so I won't comment too much on that. On the large franchise, which is CF.
Maybe the points that are helpful for you to know are we have about 9% exposure to Medicare, about 23% exposure to Medicaid. Whatever it is that we're talking about, whether it's changes to Medicaid or perhaps an MFN type implementation of a CMMI demo project, we're talking about it in the setting of Medicare or Medicaid. Beyond that, other than MFN as a construct, it's very hard to know what we're talking about beyond that. If we're looking for some clues, maybe we can go back to 2020, when in the first Trump administration. There also was an MFN construct. At that time, what it was was Medicare. It was Part B, as in boy. It was the top 50 drugs. We have no Medicare Part B exposure because we don't have any injectables. There's a lot of detail that still needs to be fleshed out.
But what we are hearing from DC more is a focus on the bill that's going through and MFN is not in that bill. So that's sort of where we are from our vantage point.
Great. Let's dig into ALYFTREK with the launch recently, maybe speak to the early launch progress with the drug, including reimbursement dynamics and physician feedback. Specifically, if we could silo look at the various silos across these different patient groups that you're targeting?
Yeah. So ALYFTREK is the fifth CFTR modulator that we have brought forward. David Altshuler and that San Diego team has been busy at work. I'm going to tell you a little bit about the launch of ALYFTREK. While we're still launching that and haven't yet even gotten approval in the EU, we're already planning for the next molecule to go into CF patients. That's the VX-828 combination. I do expect that that will be in CF patients before the end of this year. So ALYFTREK, we've talked about the fact that there are three categories of patients that we see who may want to avail themselves of this medicine. The first is patients who are just plain naive to CFTR modulators. In large part, those are patients with ultra rare mutations. The ALYFTREK label has even more mutations than the TRIKAFTA label.
Thirty-one more mutations. That translates to hundreds of patients more in the US and it will translate to thousands more in Europe because there are more ultra rare mutation patients in Europe. That is the first category. Unsurprisingly, the uptake there is the fastest because they have been waiting for medicine to treat the underlying cause of their disease. The second category are patients with CF who are discontinued from either TRIKAFTA or a previous medicine. They have CF, they are known to the healthcare system, they have a doctor, and at some point they were on a CFTR modulator, but for whatever reason, either twice a day was inconvenient to them or they could not tolerate it. Maybe they had a rash, maybe they had another tolerability concern.
They may want to come back onto medicine and we expect that if they do, they're going to want to come back onto ALYFTREK. The third category are the bulk of the patients, they're on TRIKAFTA and patients love their TRIKAFTA and it is an amazing medicine. We've never forced switching and we are not forcing switching here. If patients want to be on TRIKAFTA, it's a Vertex medicine. It's a terrific medicine. We're very happy for them to be on there. That being said, CF patients are a very highly educated group of patients. They know their specific mutation, they know that the malfunction is in a protein called the CFTR protein, and they know that the direct readout of the functioning of that protein is sweat poisoning.
In that regard, the ALYFTREK medicine has even better sweat chloride results than TRIKAFTA. The doctors are very well educated on this. I do expect that over time the majority of patients will switch to ALYFTREK because they're going to want to avail themselves of the best available therapy.
Could you just touch on why the transition hasn't been at a faster pace than maybe we've seen in the past? How much of that might be driven by the liver testing?
Yeah, yeah. Really good question. I think one part of this is what is the expectation and how do we model the transition of patients? It's very fair to say, we're going to model it based on what happened with TRIKAFTA. We have to remember that when patients were moving to TRIKAFTA, it was 2019. The best available medicine before that was SYMDEKO. SYMDEKO is available for about 60% of CF patients. The next medicine, TRIKAFTA, was available for about 95% of CF patients. There's 35% of patients in our previously described category one patients who just did not have anything for them. Now we're talking about 31 mutations in a few hundred patients. That group of patients is smaller now that TRIKAFTA is in the market.
As we think about people moving to ALYFTREK, for those who are on TRIKAFTA and want to think about switching to ALYFTREK, there is more monitoring. As Salveen points out, in December of 2024, when TRIKAFTA was approved for expanded label, more mutations, it also had increased liver monitoring. Because at that time, the agency was also looking at some post marketing data. It was 165,000 patient years, which is an enormous number for an orphan disease. Real world data. In that 165,000 patient years, there were 11 cases of LFT abnormalities. In that setting, the agency said, we want to change the liver monitoring from when you start on a CFTR modulator like TRIKAFTA.
We want you to, instead of doing quarterly and then annually, we want to change that to once every six months for six months, once a month for six months, then quarterly, then annually. There is increased monitoring in those first six months. Even though this comes from TRIKAFTA data, it was also applied to ALYFTREK. Interestingly enough, it does not actually affect the TRIKAFTA patient population because almost everybody who was eligible for TRIKAFTA was already on TRIKAFTA. This monitoring change is about new patients. It does have an impact on ALYFTREK. People who want to make the switch have to think about, do I want to do monthly monitoring for six months and if I want to do it, how do I do it? Do I have to go to my CF center?
Can I do it at home? Can I do it at a nearby lab? What does it entail? Is it just a blood test or is it simply, is it more than that? It is simply a blood test. I imagine these are exactly the conversations that are going on between patients and physicians as they think about when and if they want to make the transition from Tri to ALYFTREK. As I said, this is a very educated group of physicians and doctors and I do think the majority of patients will want to switch to ALYFTREK over time.
In one quarter there was about $100 million impact to revenue due to an illegal copy in Russia. Is there any read forward here for the second half or second quarter onwards, or is there even a broader dynamic that could play out globally?
Yeah. What we talked about on the Q1 call and it is the way I see the world today. There is a limited, isolated, only in Russia issue where there is an illegal copy being sold. It is about a $200 million impact. We have accounted for that for the full year. We talked about $100 million was going to be a Q1 2024- Q1 2025 dynamic. We talked about the other $100 million being through the rest of the year. Most of that will be in Q3, but all of it will be in the second half. We fully accounted for that $200 million and that is accounted for in the revised upward guidance from $11.75 billion-$12 billion- $11.85 billion-$12 billion. We are fighting vigorously for our patents in Russia. We have made the decision to just take the revenue out.
It's a bit of a perfect storm in Russia. The war has put economic pressure on the country. There's a movement towards nationalizing and having manufacturing in country. In that setting, this is one of the outputs. Is this illegal copy situation. I will also say that I don't see this as being anything beyond Russia. For the following reason. In all of the Western world, it is a near 100% of patent being upheld when it comes to composition of matter. That composition of matter patent is up to 2037 for TRIKAFTA in Russia. The way the patent system and legal system works is unlike the rest of the Western world, there are not high barriers to this kind of illegal copy in the Western world. There is the possibility of an immediate injunction, treble damages, et cetera. Those constructs do not exist in Russia.
Perfect. Shifting to pain here. Can you walk us through what you're seeing with the early launch of JOURNAVX in acute pain, including what you're observing with scripts, physician feedback, and reimbursement, recognizing you had one of the three big payers on board?
Yeah, I have high expectations from the JOURNAVX launch and I will say that I've been very pleased with the way the first few months have gone. It's very early days. What I see that makes me quite pleased is there is broad physician writing for JOURNAVX across physician types. Its use is in surgical and non-surgical settings. The feedback that we're getting from physicians and patients, and I'm actually surprised to be receiving direct feedback from patients in. I get a lot of letters from CF patients, but that makes sense to me. Small community, we've been in the space for a long time. It's a disease where there's very high advocacy and a lot of knowledge, and pain in that way is a little bit more diffuse. I received personal letters from patients who talk about the improvement in their pain management.
They might have gone through a left knee, now they're getting a right knee. The left knee was done with opioids, the right knee was done with JOURNAVX and the feedback is positive. Everything I see on that side looks really good. The one big pushback that people talked to us about prior to the launch was, we have no concerns about the fact that opioids are medicines with safety and tolerability issues. We get that. We need no explanation. We also do not need any explanation for why non opioids are a good thing and a necessary thing. The thing that we believe is going to happen is payers are going to have a hard time paying for this because opioids are cheap. That is clearly not the case. We have had very productive conversations with the PBMs, as you point out.
There are three large PBMs in the U.S. and one of the three we already have an agreement with to make sure that their members have access to the drug and it's very favorable conditions for the patient. Minimal to no utilization management, no prior offset, people can get the medicine they need. We're in advanced conversations with the other two PBMs and I feel very good about those conversations also leading to access for those patients. All in all, very early days. I am really happy.
How are these discussions or how is your strategy, I guess, progressing with regard to preserving long term value as you look to going into chronic pain, and if you could just touch on the No Pain Act in that context as well?
Yeah, definitely. You know, as Stuart and Duncan will tell you, we could get access on day one of launch, but that would not be the kind of value that we would be happy with and it would not be the kind of value that you would be happy with. We are staunch advocates for our medicines and we believe that the medicines should, the price should reflect the value that the medicines bring and the cost effectiveness here is indisputable. People, we have done analyses, others have done analyses, and it's very clear what the benefits are. We are strong on that. That is why we are going through the negotiations making sure that the data are clear and making sure that JOURNAVX is reimbursed at a value that we think is appropriate.
That is how those conversations are going with regard to where are we with Medicare now and the No Pain Act. You'll remember December of 2023, the No Pain Act was passed and it was implemented in January of 2025. In that first week of January, the first list of medicines that get added to the No Pain list were added. Essentially what this bill, what this act does is it directs CMS to provide an add-on payment over and above the DRG in the hospital, outpatient, and surgical center settings so that there is not a disincentive for the use of a branded non-opioid pain medicine because there is an extra payment, an additional payment over and above the DRG. We are waiting for everyone to get into their seats with the new administration to have added onto the list.
I'm 110% confident that it will get onto the list. It's just a matter of the logistics of adding it to the list.
When you look at expansion here within chronic pain, you're looking at going after peripheral neuropathic pain. Walk us through the strategy you're pursuing with the FDA. Obviously there are meetings that are ongoing with regard to getting this on label post the, you know, given the DPN trial and post the recent LSR study?
David, do you want to talk about where we are with getting to the agency and our aspiration for PNP as an indication?
Absolutely. Our goal is to get a broad peripheral neuropathic pain label. There are about 10 million people in America who have peripheral neuropathic pain. Two million of them are diabetic peripheral neuropathy, about four million, lumbosacral radiculopathy, and the other four million are things like small fiber neuropathy, trigeminal neuralgia, et cetera. Our goal is to work with the FDA and come up with a path which we do not know that they will necessarily do because no one has ever done it before. We believe that it is justified by the mechanism of action, the biology of the diseases.
With our DPN study, which is already the first phase III study is running, we had the positive phase II study and the LSR data. We're going to, we've been working first to design, we think is an optimal sort of LSR approach and come up with our own strategy. We will be meeting with the agency this summer to try and develop, you know, we'll propose what we think is the best path to getting that broad PNP label. We need to work with them. The boundaries are they could say, well, the very traditional approach is do two DPN studies, do two LSR studies, et cetera. We have maybe what you could consider a more innovative approach. We're going to try and propose to get that broad label.
Once we work with them and figure out the solution, we'll share with you what it is.
Could you just also touch on the distribution at this point as well as the progress you've had with P&T committees and getting in the hospital networks?
Yeah. So going back to acute pain with JOURNAVX, you know that the distribution that we have discussed in terms of where pain prescriptions come from, let's call it 50% in the fully retail segment, percent in an institution affiliated segment. In the institution affiliated, 15% is written in the hospital and used in the hospital. 35% is written in the hospital, but you take that script and you go to your local CVS or Walgreens and fill it in the retail. Now what we're talking about is how is it going inside the hospital. The big first milestone to get use in hospital is to go through P&T committees to get that medicine added to the formulary. Where we are is P&T committees have a certain cadence, they work in a particular way and it takes a particular amount of time.
This is not a one day affair, it's a multi month process. We had planned for that. I'm actually pleased to see that some of the larger hospitals have already gone through the P&T process and have already added JOURNAVX to their formulary. I expect that as we get into the second half of the year, more of these committees will finish their work and make their decisions about getting JOURNAVX added to their formulary list. Good wins. Maybe a little bit earlier than I had expected and a little ways to go through all of these various P&T committees. As a reminder, we're targeting about 2,000 hospitals that ladder up to about 150 IDNs.
When you look across your portfolio at this point, what do you think will emerge as the next vertical after CF and pain? In that context, just run us through some of the key timelines for these programs over the next 12 months?
Yep, yep. It's a really great question. I think we need to make a little space for CASGEVY. It is a long patient journey, but I do believe that it is going to emerge into a multi billion dollar product over time. I want to make a little bit of space for that. I think the next big vertical after that is going to be POVI. You can look at POVI in two ways. You could say the next big vertical is going to be kidney disease. I think that's fair because we have POVI and IgAN that has already enrolled its phase III interim analysis cohort. We have to wait for 36 weeks. If positive, we will be set up for a filing for accelerated approval in the first half of next year.
POVI and membranous is going to start its phase II, phase III study in this second half of this year. There are more potential POVI indications that might emerge from the RUBY 3.0.0 and RUBY 4.0.0 basket studies. You can also look at it as renal is the next big pillar because IgAN is a renal disease. Membranous is a renal disease. We have ADPKD in maxeplan. That phase III program will also complete its enrollment for potential accelerated approval this year. That program, we have to wait for 48 weeks. If that's positive, then we'd be set up for an accelerated approval filing there. There is ADPKD, Autosomal Dominant Polycystic Kidney Disease, which is in phase II development. Either way you look at it, it's POV and kidney disease.
It is quite interesting because people think this is happening because I happen to be a nephrology. It is not. It is simply where the sandbox took us.
You will have some data at the upcoming diabetes meeting on your type 1 diabetes program. Do you want to just frame where you stand with the long term follow up there and then the additional programs that are provided?
Yeah, definitely. Maybe I'll ask David to talk about that. Interestingly enough, David is the endocrinologist in the room. We often get asked what our favorite program is. I won't reveal it. I'll just say I'm a nephrologist and he's an endocrinologist.
We love them all. The type 1 diabetes, you know, is a terrible disease. There are about four million people in the U.S. and Europe. There are at least 10 million diagnosed worldwide. You know, it is a disease where despite 100 years of treatment with insulin, not only is it that despite modern technology only about 25% of people actually achieve the target glucose control, but it is also a burden of every minute of every day having to manage your blood sugar. The idea of a curative therapy where someone can have a one-time treatment and no longer have to live that way is truly transformative. VX-880 is the first such program. It is in pivotal development and there are sort of two components.
One is the cells themselves to be able to make, manufacture cells that are human islets that can restore function. The other part, which I'll get to in a minute, is the improved modulation of the immune system so the cells do not get rejected because it is an off-the-shelf product, it is not autologous. The results for VX-880, which is using standard immunosuppression, are actually quite remarkable. I think that if someone had said five years ago that we would have what we described, there will be an updated ADA. The last description, 12 people treated, nine out of the 12 were off insulin with normal blood sugar and the other three had reduction or were stopping insulin as well. That, and also the original enrollment of this group was severe hypoglycemia, which is life threatening, and they did not have any more hypoglycemic events.
That is now in pivotal development and we have agreed with the agency that we will enroll 50 people. We will complete that mid year and then we will follow them for a year. That is for the first potential approval and then really it is about reducing the sort of safety and tolerability of standard immunosuppression with tacrolimus and sirolimus, which we are using. We have multiple approaches we are working on for that. One is just using some of the innovation in immune modulation that is out there, but also hypoimmune gene editing and devices. When we look at it, we see the initial approval could be not that far off, having enrolled all of the patients, but then the ability to expand it will really be just about, one, demonstrating its value and, two, just making increased safety and tolerability of immunosuppression.
It may not yet be the fourth pillar, but it's going to be a big pillar. Once we get it really going.
You can start the process of making the pillar.
Exactly. The pillar is growing but with four million people in a cure, it could be a very big pillar down the road.
Salveen, just to mention at the upcoming ADA there is going to be an investor event. You can expect to see at least one year follow-up data for the first 12 patients dosed in the study. That is to say the phase I, phase II before it was converted to phase I, phase II. You should expect to see some of the steering committee members and practicing physicians also be present to address how they see this.
Great. With that, thank you so much.
Thank you.
Salveen. Thank you.
Thank you.
Thanks Salveen. Thanks everyone.