Great. Good morning, everyone. Welcome. I'm Jess Fye. I'm a Large Cap Biotech Analyst at JP Morgan. We're delighted to be continuing the conference this morning with Vertex. There's gonna be a Q&A session right in this room after the company's presentation. No need to switch rooms. There's gonna be mic runners. If you have a question, you wanna raise your hand, you can do that. Alternatively, you can use the portal to fire me questions to an iPad up here. I can ask them for you. You can just listen to my questions. Without further ado, let me pass it over to the CEO of Vertex, Reshma Kewalramani, for the presentation.
Well, good morning, everybody. Jess, thank you so much, and thank you to JP Morgan for hosting this. It is nice to be back in San Francisco in person and to do this live. Some housekeeping notes to start with. This slide has our safe harbor statement listed. In brief, let me remind you that the forward-looking statements made during this presentation are subject to risks and uncertainties that are discussed in our SEC filings, and I encourage you to read the filings. Actual events and outcomes may differ materially. With that, let's get on with it. At its core, Vertex's strategy is to invest in scientific innovation in order to create transformative medicines for people with serious diseases, with a focus on specialty markets. Underlying this corporate strategy is an R&D approach, which is designed to yield disproportionate success.
This approach has fueled our achievements in CF, generated a broad, advanced, and diverse portfolio, delivered multiple programs with near-term launch potential, and built a company with a strong financial profile, talent base, and culture that is going to drive long-term success. The results of this approach are depicted to the right of this slide. We have successfully launched four medicines in cystic fibrosis. Our 2022 guidance is between $8.8 billion and $8.9 billion. We have near-term commercial opportunities in four disease areas. Exa-cel, previously known as CTX001 in sickle cell disease and beta thalassemia, VX-548 in acute pain, and the vanzacaftor triple combination in cystic fibrosis. As a marker for R&D productivity of the six disease areas outside of CF in which we entered phase II development in the recent past, five of the six programs have yielded positive proof of concept results.
This includes sickle cell disease and beta thalassemia, as well as acute pain that I've already spoken about, but it also includes APOL1-mediated kidney disease or AMKD, as well as Type 1 diabetes with our cell-based program. We also have a phase II study underway with VX-548 in neuropathic pain and another phase II study with longer duration of treatment with VX-864 in alpha-1 antitrypsin deficiency. In total, this makes eight programs in mid and late-stage development, all of which I believe have a high likelihood of success. This slide lists the eight programs that are in mid and late-stage development. Each asset presents an opportunity for a transformative medicine, and each opportunity represents a multibillion-dollar market. This vision, this broad potential of our clinical stage pipeline is not a distant vision. This is right in front of us.
We have the opportunity to bring new products to five disease areas in the next five years, our five in five goal. Let me start with CF. Let me start with the numbers. We are updating the epidemiology in CF in the U.S., Europe, Australia, and Canada to 88,000 patients, up from 83,000 patients in 2021. The growth in this population comes really from three places. First, there are additional patients coming forward to receive treatment given the overall improvement in CF care. Second, registries are capturing data better around the globe. Third, and maybe most importantly, CF patients are living longer. Our medicines are delivering meaningful long-term benefit. For example, we recently showed that there is a 70%+ improvement in lung transplantation and mortality with people who are taking CFTR modulators.
Notably, what this means is for a baby born in 2021, the mean predicted survival for this child is 65 years of age. Just a few decades ago, that number was in the mid-30s. Our goal, to be clear, is to have all patients who could benefit from CFTR modulators on our therapy. We see continued significant growth in CF as there are more than 20,000 patients who are eligible for CFTR modulators or could benefit but are not currently on therapy. These patients largely fall into two categories. First, where we have recently secured reimbursement, and we are early in the launch curve, and second, younger age groups. For these younger age group patients, we continue to study our medicines in younger and younger patients.
I'm pleased to let you know that our TRIKAFTA two to five- year old submission has been accepted for priority review in the U.S. with the PDUFA date of April 28th. Our next in-class, vanzacaftor triple, has completed its enrollment, and the 52-week dosing period continues. We now project that this study, the vanzacaftor triple combination phase III studies, will complete by the end of this year. We have high expectations for this program, and we look forward to the data readout. We're not done. We have already identified additional potentiators and correctors in the lab, and we are already advancing them into the clinic. Lastly, there are about 5,000 CF patients cannot benefit from CFTR modulators because they simply don't make sufficient protein. For these patients, our mRNA approach, or VX-522, may be appropriate.
This molecule, VX-522, is a result of our partnership with Moderna. It has been cleared to enter the clinic. It was also recently granted Fast Track designation by the FDA. The initiation of this trial, which has already occurred, is an enormous milestone. It is our first mRNA therapy to enter clinical trials and brings hope to the remaining CF patients who are waiting for a drug to treat the underlying cause of their disease. Let me move from CF to the pipeline. Let me start with exa-cel for sickle cell disease and beta thalassemia. This is our next near-term commercial opportunity. Exa-cel holds transformative potential for patients and is poised to become the first approved gene-editing therapy for any disease. Sickle cell disease and beta thalassemia are a significant burden to patients, to families, and to the healthcare system.
In the U.S., economic analyses have predicted and modeled that the lifetime cost of sickle cell disease, severe sickle cell disease, is between $4 million-$6 million over a lifetime. Exa-cel is a one-time autologous ex vivo gene-editing investigational therapy in which a patient's own cells are collected. Using CRISPR-Cas9, these cells are precisely and durably edited at the BCL11A locus. These edited cells are transfused back into the patient. The clinical benefits, they are evident from the data that we've shown to date, and we're excited to bring this therapy that holds the potential for a one-time functional cure to patients who have been historically underserved. I'm gonna move on to our commercial preparedness, but I do wanna give you an important update on our regulatory status with exa-cel.
I'm pleased to let you know that exa-cel has been filed in the EU and the U.K. for both sickle cell disease and beta thalassemia as of last December. You know that we've initiated the rolling submission in the US, and we remain on track to complete that submission later this quarter. We are making strong progress in our commercial readiness to launch exa-cel. Our commercial and medical affairs teams are hired and trained, and we have established the infrastructure to support physicians and patients through the treatment journey. Our initial launch of exa-cel is gonna focus on the 32,000 most severe sickle cell patients and beta thalassemia patients out of the universe of approximately 150,000 sickle cell and beta thal patients in the U.S. and EU.
We believe these 32,000 patients can be efficiently served with about 50 authorized treatment centers in the U.S. and about 25 authorized treatment centers in the E.U. because the geography of these patients, both in the U.S. and outside the U.S., are concentrated into specific geographies. In parallel to engaging with the treatment centers, we've also been working with payers as well as policymakers to ensure that these stakeholders understand the significant burden of this disease and to ensure patients have access and reimbursement to this therapy if and when exa-cel is approved. Let me move on now from exa-cel to the pain program. I'll focus my comments on acute pain with VX-548. There is a staggering unmet need in acute pain.
The toolkit for the management of acute pain has remained largely unchanged for decades. VX-548 is a NaV1.8 inhibitor, and if approved, would represent the first new class of medicines with the potential to treat this high unmet need. It's important to know VX-548 acts on the peripheral nerves. It blocks the pain signal there, and thus it may be available to provide effective pain relief without abuse potential. Abuse potential is a central nervous system phenomenon. The NaV1.8 target is both genetically validated and pharmacologically validated. We ourselves have completed successfully five phase II proof-of-concept studies with VX-150, the predecessor molecule to 548, and with VX-548 itself. The pivotal development for 548 in acute pain initiated last year.
We're concurrently enrolling two randomized control trials and one single arm study with a goal of seeking a broad, moderate to severe acute pain label. I'm pleased to share that we now anticipate that the VX-548 pivotal development will complete towards the tail end of this year or the beginning of next. With that, we see the opportunity for a potentially near-term and significant potential to support patients and launch yet another molecule. Let me talk a little bit more about the treatment gap that exists. The current standard of care for acute pain has NSAIDs and acetaminophen on the one end of the treatment landscape and opioids on the other. While NSAIDs and acetaminophen have pain relief, the relief level is limited, and there are concerns with GI and liver toxicity.
Opioids, on the other hand, are effective pain medicines, but they have important side effects, including somnolence, dizziness, nausea, and most importantly, abuse potential. This leaves a gap in the treatment landscape for medicines that can be used for effective pain relief with a desirable benefit risk profile without abuse potential. VX-548 showed strong efficacy in the phase II program, an attractive benefit risk profile, and by way of its mechanism of action, that's to say peripherally acting, lacks abuse potential. VX-548 has been granted both Fast Track and Breakthrough Therapy Designation, indicative of FDA's recognition of the high unmet need and the compelling clinical profile to date. Let me put some numbers around this opportunity. Today, in the U.S. alone, there are approximately 1.5 billion treatment days of an acute pain medicine prescribed annually.
Even though 90% of these prescriptions are generic, currently this is a $4 billion market. With respect to the settings of care and where these prescriptions are written, approximately two-thirds or $1 billion of these prescriptions are driven by hospital or institutional prescribing. These are concentrated in about 1,700 hospitals and about 200 IDNs or integrated delivery networks. In other words, it's concentrated, and we believe we can approach this opportunity with a specialty sales force. In addition, we see both high demand and a clear path to access and reimbursement. Let me give you some examples for why I say that. Almost all institutions and all 50 states have some guidelines in place with regard to opioid prescriptions.
Most recently, the NOPAIN Act, signed into law on December 29th of last year, directs CMS to make a separate add-on payment to hospital outpatient settings and to ambulatory surgical care settings for non-opioid medicines. This new law is an example of the growing movement to empower hospitals, patients, providers to utilize non-opioid treatments. We are excited for VX-548 to be a potentially near-term, effective non-opioid treatment for patients who are waiting. Let me move from pain to inaxaplin or VX-147. VX-147 has the potential to treat the underlying cause of APOL1-mediated kidney disease. This genetic disease was just recently defined in 2010. This is a disease that relentlessly and rapidly progresses to dialysis, transplantation, or death. There are no approved treatments for this disease.
We've already shared that in our 13-week phase II study, we demonstrated a 47.6% reduction in proteinuria. That is an unprecedented result in FSGS, let alone in APOL1-mediated kidney disease. We are now in a phase II/III pivotal trial with inaxaplin, with a pathway established for accelerated approval if the data are supportive. Given that AMKD has only recently been defined, and it is a relatively asymptomatic disease until late in its course, diagnosis rates are low. We are addressing that with multiple initiatives, including one with Alonzo Mourning, the Basketball Hall of Famer, who himself suffered from AMKD until his transplantation. Our goal here is to improve awareness, diagnosis, as well as screening. In short, AMKD affects about 100,000 people in the U.S. and EU.
With inaxaplin, we see the potential of bringing a first-in-class treatment that could transform the underlying cause of this disease, and thereby unlocking a big market opportunity. Let me move from inaxaplin to Type 1 diabetes. This slide shows you a trio of our programs that are all grounded in the VX-880 cells. These are the naked cells. This VX-880 program has already demonstrated proof of concept with the first two patients dosed at half the target dose. What I mean by that is we've demonstrated that patients have improvements in hemoglobin A1c, elevations in C-peptide, and decreases in exogenous insulin needs. In fact, for patient number one treated at half the targeted dose, there was a complete elimination of exogenous insulin. As I mentioned, all three of our programs in this disease area rely on the foundational VX-880 cells. The VX-880 program itself is now in part B.
That's where we dose with the full targeted dose. This part of the study is now fully enrolled, and we expect to be able to share more data and longer-term data from these patients this year at upcoming medical congresses. I should note that the next portion of the study, Part C, is the part of the study where we are able to dose at full targeted dose without a stagger. Part B has a dosing stagger between each patient. Moving to the middle panel, the VX-264 program. The VX-264 program is the cells, the same VX-880 cells, this time cloaked in a device so as to evade the immune system. Whereas VX-880 uses standard immunosuppressants, this program does not have a need for immunosuppressants. Last year, we simultaneously filed a CTA in Canada as well as the IND in the U.S.
I'm very pleased to share that the CTA has cleared, and we look forward to initiating the enrollment and dosing of the VX-264 trial in Canada in the coming months. In the U.S., the IND has not cleared, and the program is therefore on hold until we receive the FDA's questions and satisfactorily address them. On the last panel is our hypoimmune cells. In this program, we're editing the VX-880 cells, and that will cloak the cells from the immune system. That's our second approach, the device being the first, to potentially eliminate the need for immunosuppressants. This program continues to make nice progress through preclinical development. This is a top-line view of our pipeline with select preclinical assets as well as our clinical stage program. I'll make three points on the clinical stage program. It's broad, diverse, and advanced.
It also reflects a nice balance between internal and external innovation, with 40% of the pipeline coming from BD activities. A couple of comments on the select preclinical assets on this slide. The next wave of innovation is right around the corner, and I'll call out the DMD program here, which would be our first in vivo gene editing program for which we expect to file the IND later this year. The improved conditioning program, which would vastly expand the number of patients eligible for exa-cel, and the NaV1.7 program, another pain program that alone or in combination with VX-548 would expand our leadership position there. A moment on our financial profile.
As I've already told you, we guided for 2022 $8.8 billion-$8.9 billion in revenue, and we'll be giving you actuals on February seventh along with 2023 guidance on our earnings call. In the middle panel, you see a select few of our external innovation investments that have led to this pipeline that I showed you on the previous page. With our business model, with the lean SG&A spend, large treatment effects, you see that we continue to provide excellent operating margins at the top end of our peer group. I'm gonna leave this slide for you to review, but in essence, 2022, we had a very good year across the board that sets ourselves up for a very important 2023 with multiple catalysts. I will end with this slide.
You could use this as a marker, a report card for our advancement and progress in the CF business and through the pipeline for 2023 and beyond. We seek to continue our journey in CF, prepare for near-term commercial launches, drive and accelerate our pipeline forward, including our goal of five launches in the next five years, and continue to deliver financial performance. Thank you very much, and I'll turn it over to Jess.
Great. I think some of the other members of the management team are going to come up for Q&A as well. Again, if you have a question, you can raise your hand, otherwise, you can submit it electronically as well. I'll start. Let me just cut right to the chase here. Your company's generating plenty of cash. You've got a nice cash balance. How much of a priority is returning cash at this juncture versus, you know, reinvesting in the business or anything else?
Yeah. Charlie, do you want to take that one?
Yeah, sure. listen, we know that the greatest way for us to create value is to develop transformative medicines for serious diseases, and therefore, innovation continues to be our top priority. For capital allocation, we've been active, investing both internally and externally over the last several years, and I think we've shown that those investments have been wise. You see the advancement in the pipeline, you see the level of success that we've had. Importantly, on the BD side, a number of the programs, 40%, have benefited from BD that we've done in recent years. Looking ahead, investment in innovation, both internally and externally, will continue to be the priority. We have also maintained a share buyback program over recent years.
We've purchased about $1.5 billion of shares in the last two years, and you can expect that we'll continue to have a repurchase program going forward.
Great. There's one that came in on the portal so far. Have you begun price negotiations with payers in Europe for exa-cel, or when can that happen? It's sort of alluding to, Bluebird's negotiations in Germany, I think. How, you know, how do you expect it to go for exa-cel?
Sure. I'm gonna ask Stuart to address that. Obviously, we're at the stage now where we've completed the filings for sickle and beta thal in the EU and U.K. Stuart can tell you a little bit about where we are in the international region and in the U.S.
In both regions, we have both our commercial and medical affairs teams, up and running, and they're already engaging with payers, policymakers, and indeed, potential authorized treatment centers. We haven't started talking about specific pricing negotiations. It's much too early to do that, but we have been talking with payers and policymakers about the unmet need, which I have to tell you is well understood in Europe, the unmet need for new products in this particular area. We've also been talking with them about the potential mechanisms and payment models because pricing is one thing, payment model is another thing for these one-time functional cures as this is obviously a relatively new development across the industry.
What I will tell you about that is based on our work in CF and our initial discussions with payers there, I think it's very clear that from a payment model point of view, one size is not gonna fit all. That is a big part of the discussions that we're having, what is the needs of the individual countries, and therefore, what is the right payment model for them? I think our experience in CF is gonna stand us in good stead there. We've been very creative, very flexible in working with different countries, and that's led to our success in negotiating many reimbursement agreements for CF, and I think that's a capability that we're gonna be able to utilize to help us be successful in with exa-cel as well.
Great. One question in the audience. Can we get a mic over there? Right here.
Hi. I was just curious about the stem cell therapy in diabetes and what that might cost individual patients, if it's cost prohibitive, if you could provide any color on that. Thank you.
Yeah. I'll ask Stuart to tackle that. I'll start by sharing that there are islet cell transplants available, cadaveric islet cell transplants, and whole pancreas transplants, and that can give you a sense for where to start. Stuart?
Yeah, again, I mean, it's obviously much too early to be talking about specific pricing ranges. You know, we're absolutely thrilled with the progress of the program to be able to declare proof of concept for the VX-880 program, the naked cells, just based on two patients is truly amazing. As Reshma said, what we're looking to do here is develop a one-time functional cure and a one-time functional cure over time that we can cloak from the immune system so that we don't need immunosuppression as well. That is the promise of what we're doing here. Clearly, the cost of Type 1 diabetes is very, very high. These patients are very intensively managed. The cost of cell therapies, as Reshma said, the cost for cadaveric cell transplants are well known.
The issue with those is really not price prohibitive, it really is quantity and quality of cells prohibitive. That's what we are seeking to fix by developing fully mature, fully differentiated, fully functioning glucose sensing, insulin secreting islet cells, but being able to do that in industrial quantities at very, very high quality. Cost prohibition is not what hold back cadaveric islet cell transplants, it's really quality and quantity of cells, and that's what we're seeking to fix.
On the pivotal program in pain, you talked about that completing as soon as the end of this year, potentially. Should we expect to start hearing data by the end of this year? Is that, is that on the table or is that sort of when the trial completes and then we would hear something maybe in 2024? Second, there's multiple trials here. Should we expect this to come as sort of one update, or could they come sort of in sequence?
Yeah. Just to ground everyone, the pivotal program for VX-548 in acute pain is comprised of three studies. There's one RCT randomized clinical trial in bunionectomy, one in abdominoplasty as a model for soft tissue and a model for hard tissue pain, a single arm study with pain of any variety. That's what comprises this phase III program. The two RCTs are very similar to the RCTs we've already completed in phase II. They're really the same models, they're the same endpoints, and it's the same duration of therapy, 48 hours. We are sharing that we expect the completion of the trial late this year or early next. After that, it takes a little bit of time to bring in the data, to analyze it and to share it, we move pretty fast.
I do expect that the update will be a singular update for the entire program.
You also talked in the presentation about some updated epi data. Can you walk through kind of the reasons why you're able to update it and why you see more patients?
Yeah. Stuart, can I ask you to take that one?
Sure. Yeah. The way we collect the epi is largely working with countries around the world that have very well-established registries. What we've seen over the last few years is increasing numbers of patients reported in those registries and still active and alive in those registries. Really what's driving that increase is a couple of things. The first one is more patients coming forward to be looked at in registries, and we believe that is largely as a result of more patients kind of returning to be treated as a result of highly effective therapies. In addition to that, the registries have continued to develop and expand, and so there's better data capture in those registries. Thirdly, and perhaps most importantly, is the increase in survival that Reshma mentioned that we've seen, which has been going on for a number of years now.
That increase in survival is something that we expect to continue as more and more people are treated with our CFTR modulators over time. We see this being a trend which is gonna continue. Just to dimensionalize it, back in 2021 at JP Morgan, we updated our epidemiology from 75,000 patients in North America, Europe and Australia to 83,000. This year we're updating that for those same geographies to 88,000 patients who are living with CF today.
For your phase II/III study in kidney disease, can you talk about how enrollment's going there, what progress you're making on sort of identifying the patients to kind of put into that study?
Yeah. This study, in comparison to something like the VX-548 acute pain study, we always knew would have a different enrollment trajectory, and it would take a little bit of time because this disease itself was just defined in 2010. There is not widespread screening or diagnosis, and the disease itself is actually rather asymptomatic until the late stages, so you don't even know you have it. We are working to ensure that enrollment is efficient by having a concurrently run genotyping study. If you genotype in, you can then enroll in the randomized clinical trial. We're opening many, many sites, so there are sites close to where our patients are. We're embarking on campaigns like the one with Alonzo Mourning to ensure that patients know to look for this disease, ask for testing and such.
Where we are today is that we are expecting the phase II portion of the phase II/III pivotal trial to complete this year.
We're also expecting pivotal data for the new triple coming up. Can you talk about, you know, what you wanna see from that? You know, it seems like TRIKAFTA sets a pretty high bar here. Maybe also talk about what your level of confidence in being able to beat TRIKAFTA.
Yeah. I'll ask David to take that one. Our confidence in the vanzacaftor triple is very high and David can speak to why we feel that way. David?
Yes. No, it's true that TRIKAFTA has a remarkable profile and so it is very difficult to do better. If there's any medicine we think can do better, it's the vanzacaftor triple therapy. The reasons for that are twofold. One, we have evidence from our HBE assay, human bronchial epithelial cell assay, run in our labs in San Diego. That assay, as we run it, has proven quantitatively to translate from the lab to levels of CFTR function in patients repeatedly for all four medicines and multiple others in clinical trials. The vanzacaftor triple at clinical exposures is better in the HBE assay. It drives higher levels of chloride transport than does TRIKAFTA. That's one, laboratory data. The second is phase II data.
We did a phase II trial of the vanzacaftor triple. We focus here on sweat chloride because sweat chloride is a direct measure of CFTR function, but also it's more tightly measured in a small study. You can get a more accurate measure in the small phase II study than you can of FEV1, which just is a more variable measure. In that phase II data, the sweat chloride we obtained when compared through PK/PD modeling cross-study comparison to previous studies with TRIKAFTA clearly shows higher levels of CFTR function. The combination of laboratory data and our phase II data tells us that the vanzacaftor triple has a high likelihood in phase III of driving higher levels of CFTR function. We know from natural history and our own clinical trials, it's higher levels of CFTR function that leads ultimately to patient benefit.
Is there anything you can say about, how long the IP for the vanzacaftor triple might extend beyond the TRIKAFTA IP?
We haven't shared the IP protection for vanza. What I will tell you is that the TRIKAFTA protection runs all the way out to 2037. You could expect it to be longer than that.
I know we're talking about how hard it is to beat TRIKAFTA. Sometimes we get questions about other products in development for CF. Can you talk a little bit about what you're watching for competitively in the CF landscape and, you know, the extent to which you think your franchise is defensible?
Yeah. We look at everything in CF, as you would imagine. As I think about the competitive landscape, the nearest term and most substantial competitor to TRIKAFTA is vanzacaftor and that triple combination. That study will end by the end of this year.
Just a follow-up on the VX-880 program. You said that you're looking for a cure. What is the bar for the data for that to be the modality that you move forward as opposed to the other two?
Yeah. The three programs are both related to each other, and we have somewhat different goals for them. If you're wondering about why you have three programs, the most important thing to understand is that the foundation for each of these programs is the VX-880 cells. There are two things you're trying to do when you're working with cell therapy for Type 1 diabetes. One, have cells that are fully differentiated, insulin producing, self-regulated. You need that. The second thing you need, and it's in this order, the second thing you need is to cloak those cells from the immune system. The big breakthrough here is that we already know that our VX-880 cells work because at half the dose we were able to show proof of concept. That program will use standard immunosuppressants.
What we're doing with the device program and the gene editing program is two alternative ways to cloak those cells so that you don't have to use immunosuppression. As I think about it, that's the secondary issue. The primary issue and the big breakthrough is having cells that are fully differentiated, insulin producing, and can regulate glucose. The data that we've already shared, and you can look through, it goes through C-peptide and hemoglobin A1c and in exogenous insulin, et cetera, gives you that confidence in those cells.
Okay. We are out of time, so we're going to wrap it up there. Thank you, everyone.
Thanks, Jess.
Thanks.