Thank you. Thumbs up. All right, well, thanks everybody for being here. Again, I'm Brian Abrahams, senior biotech analyst here at RBC Capital Markets. I'm really pleased to have our next featured company, Vertex Pharmaceuticals, represented by their CFO and COO, Charles Wagner. Charlie, thanks so much for being here.
Yeah, thanks for having us.
A lot I would love to cover, but why don't we start with CF? It's, you know, obviously been a core driver for many years for you guys. Can we talk about the growth opportunities in CF and maybe in the near term? Can you elaborate a little bit more on the additional 800 patients you've talked about with the TRIKAFTA and ALYFTREK label expansions this year? I guess what we should expect the cadence of those patients coming on therapy to look like, how quickly you're seeing that happen, how much of that will, how many of those patients were already being treated off-label. As we kinda look beyond that bolus, 2027 and beyond, and some of the additional age and geographic expansions, what do you foresee as the key additional growth drivers for the CF franchise over the long term?
Yeah
It continue to grow—More and more patients. Talk to us about what the cadence looks like from here on in.
Sure thing. Yeah. Listen, we are continue to be really excited about CF. Very proud of the leadership position that we've built over the last 20 years. You know, we have an outstanding portfolio of medicines and hundreds of thousands of patient years of experience at this point, yet the business continues to grow.
Yeah.
Generally speaking, the playbook in CF has been a few drivers. It's serial innovation. It is moving to younger patients. It is picking up patients with rare mutations who maybe couldn't benefit from previous generations of medicines. It is geographic expanding access and reimbursement through geographic expansion. Lastly, there is a benefit from price increases as well. You see all of those playing out in the guidance that we gave for 2026 and maybe if you don't mind me backing up, the company's guidance for the year is revenue of $12.95 billion-$13.1 billion. We said that that includes $500 million or more from CASGEVY and JOURNAVX . Re venue from CF, that implies healthy growth over 2025. It's all of those drivers.
Obviously, we see the ALYFTREK uptake both in, some naive patients, particularly those with rare mutations, some from patients who've discontinued from previous, medicines, and then significant switching for ALYFTREK as well.
We'll talk about that as well.
Yep.
Yeah.
That's the serial innovation piece. You know, we continue to see younger patients coming on medicine, and then we haven't talked as much about geographic expansion this year. For example, ALYFTREK, we got ALYFTREK reimbursement agreements done in 11 countries in the first quarter. Then ALYFTREK aside for a second, in recent years, we've expanded to markets like Brazil, Mexico, Turkey, not some of the core European markets where that drove the growth three, four, five years ago. But those have those markets have a significant number of patients, and we continue to try to reach CF patients wherever they are around the world. If you look at 2026, I would say healthy growth drivers. The themes will be the same in 2027.
We are filing for approval for ALYFTREK two to five late this year, TRIKAFTA one to two, and so hopefully we'd expect approvals in those younger age groups next year. You'll continue to see some geographic expansion. Very much the same themes, and year to year, the mix is a little bit different.
Yeah
We continue to see growth in CF.
Excellent. Then maybe speaking of ALYFTREK, conversion seems to be progressing steadily, I think particularly outside of the U.S. How has this aligned with your initial vision, and are there ways to accelerate this further in the U.S.? How have some of those initiatives started to take hold, and what is the level of importance on conversion, or is this something you just will kind of step back and let play out organically over time?
Listen, our, it's crystal clear to us that ALYFTREK outstanding efficacy in ppFEV1 , great results on sweat chloride, great safety profile, convenience of once-a-day dosing. It is the best CFTR modulator we have. That said, we've learned that people are super loyal to their TRIKAFTA.
Yeah
That's not a terrible thing either.
They're doing well on it.
Yeah, they're doing incredibly well. If you look, we have said, we've described the rate of switching from TRIKAFTA to ALYFTREK in the U.S. as steady, and that continues. To your point, you know, certainly the results in the first quarter were very good. Outside the U.S., you see even a, let's say, a steeper, a steeper ramp for ALYFTREK for a couple of reasons. One, I'd say European physicians are, you know, very attuned to sweat chloride, and the advantages of ALYFTREK on sweat chloride are very clear to them. The label is a little bit different in Europe, and therefore doesn't require liver monitoring to switch, and so there's less of an impediment there. Lastly, there were a series of rare mutations that were picked up in the ALYFTREK label, and there are more of those rare mutations in Europe than there are in the U.S.
You do see a little bit of a steeper ramp in Europe in markets where it's reimbursed.
Yeah
So it important I mention we had 11 reimbursements in the fourth quarter. ALYFTREK is reimbursed in several large markets like the U.K., Ireland, Germany, Italy, but not throughout Europe. There are additional reimbursements to gain over the course of this year that'll also fuel the ALYFTREK ramp. I would say overall, it's been very much in line with our expectations. I think we reported in the first quarter earnings call that cumulatively now ALYFTREK has surpassed the $1 billion mark since launch. If you look at the sequential ramp in the first quarter, I think things look really good for a very strong year for ALYFTREK.
Excellent. Great. Let's shift gears to acute pain and JOURNAVX. I know you guys have talked about a lot of really good progress you've made on Medicare deals, securing reimbursement, access overall. What's left to do, and when should we expect that we're gonna start to see the strong prescription density you're seeing pull through to revenue, more robust revenue growth?
Yeah.
I know there are some first quarter dynamics like inventory that may have.
Yep
Obscured things.
Yep
Talk us through what's kinda the expectation?
Sure thing.
On that.
Yeah, no, listen, I personally am very excited about the JOURNAVX launch and the progress that we're making. Again, if I could bring it back to the guidance, we said that JOURNAVX and CASGEVY combined would represent $500 million or more of revenue this year. Additionally, with regard to JOURNAVX, we said that prescription volume would triple compared to 2025. We are off to a great start on that in the first quarter. Prescriptions will triple, and revenue will more than triple because there will be a higher revenue conversion as gross to net normalized.
Yeah
All that into account. You know, first quarter, you asked about progress. The progress on access has been fantastic.
Yeah.
We previously reported we got the third of the large PBMs signed at the very end of 2025. As you contract with those, sometimes it takes a little while for the economics to trickle down into some of the subordinate plans throughout the first quarter. We've made very good progress there with commercial payers and are largely done. We secured a large Medicare provider in May and are in conversations with a couple of more. Would hope to have an update on that sometime this summer. We'll see. Negotiations take as long as they take, basically.
Sure.
At this point, we have 240 million covered lives, we're really far along in terms of our expectations for coverage, and certainly would hope that by the end of this year, that we're not talking about access and coverage anymore. I think that would be the goal. With that, as we gain coverage, we are able to roll back some of the free drug that's being offered through the patient support program. That, of course, in turn helps normalize gross to net, and as that gross to net normalizes, you get better revenue conversion on the prescriptions. You mentioned, the first quarter, we had 350,000 prescriptions, $29 million in revenue. There was I appreciate that outside the company, you can see revenue, and you can see prescriptions. What you can't see is shipments. There is a little bit of a timing difference.
Okay
Between shipments and prescriptions, we had a small channel inventory build in the fourth quarter that drew down in the first quarter. I'm not expecting to talk about that any further in the second quarter. We have said publicly we expect to see a meaningful sequential ramp in JOURNAVX revenues in Q2.
We shouldn't expect that access would come with any more barriers than the free drug program? In other words, will removing the free drug program change the cadence of utilization?
Yeah. In our view, it should not.
Okay.
We have worked very hard in these contracts to avoid things like step edits and other impediments to accessing the drug. In some cases, that's why it's taken longer to negotiate contracts.
Yeah.
That's, in our view, that's well worth it. We don't want there to be impediments to accessing a drug like JOURNAVX, and we're willing to wait and secure the right type of access at the right value. Again, now five quarters, if you will, into the launch, I think access and coverage is becoming less and less of a story, and now it's about revenue conversion.
Great. Let's talk about some of the pipeline. On povetacicept.
Yep
Our KOL feedback has indicated a huge appetite for APRIL-BAFF agents in IgAN. Maybe a little bit less certainty around how the late-stage agents differentiate from one another. What are the key learnings that you can take from the SEBI launch about the market and your commercial strategy that can potentially benefit you as a fast follower there? What do you think you need to do to convince docs around Povi's differentiation, especially once one, if not more, of the other competitor drugs potentially do have a once-monthly subQ label?
Yeah. Yeah, no, I appreciate the question. It's good that your KOL checks match ours.
Yeah
Which is that for those docs that distinguish between APRIL and APRIL-BAFF.
Right
There's a very strong preference for APRIL-BAFF.
Yeah.
You know, I would say, you know, we've said with Povi, it's an engineered fusion protein. That engineering leads to greater binding and affinity and potency and PK distribution. Povi really is designed to be optimal for impacting APRIL-BAFF. We've talked about the profile. You know, you saw the results from the trial that we published recently, 52% reduction in UPCR, 77% reduction in Gd-IgA1 autoantibodies, excuse me, 85% resolution of hematuria.
Yep.
That was true, the numbers are, that the efficacy impact was true across all cohorts, so gender, age, race, geography. Importantly, the impact is deep and sustained across all.
Yeah
Types of patients, which we think is very powerful. Additionally, the safety profile was excellent. No SAEs attributed to povetacicept, very low incidences of serious infection, similar to what we saw with placebo. Nobody discontinued the trial because of SAEs or serious infections, a great profile there. Lastly, we do think the presentation of the drug, the patient factors are important as well. It's a low dose, 0.46 ML monthly dosing auto-injector. The convenience, not just convenience, you know, these drugs only work if you take them.
Yeah.
If you're worried about a self-injection, a format like Povi is outstanding.
Okay.
We think it's the TRIKAFTA, if you will.
Yeah.
It's the combination of those factors. T hat really differentiate Povi, and we are certainly in our pre-approval conversations, out there emphasizing those benefits. You asked specifically about the Otsuka launch. It seems like the launch is off to a good start.
Yeah.
Right? That's great. You know, I think our view is that this is a huge market with a lot of unmet need.
Right.
160,000 patients in the U.S., more than enough room for multiple transformative therapies. I have no doubt our view is that Povi is a best-in-class offering. We intend to be delivering that message consistently. You know, the early signs on that launch are promising because there are patients there that are eager for access.
Yeah
To transformative medicines. Timing-wise, obviously, we have submitted for accelerated approval. We're waiting for acceptance of the filing, hopefully very soon. If that is the case, then we would at least be on track for the possibility of accelerated approval at the end of the year.
Okay. We're coming up on eGFR data from Otsuka.
Yep
In the very near term.
Yep.
I guess what do you guys think constitutes good data versus not good data, and what's good for Vertex and Povi?
In our data or in their data?
In data.
In their data.
You know, this has the potential to validate the connection of proteinuria, further validate the connection of proteinuria.
Further validate.
I think is eGFR.
Further validate.
At the same time, you know, if there's room for improvement, that could also benefit you guys.
Yes.
I'm curious what you guys are expecting, looking for, hoping to see.
Yeah. I think the literature and the KOL view and our view is that proteinuria reduction and eGFR stabilization are very, very highly correlated. You see that in the data from the RUBY trial and from other companies' trials that there is a high correlation there. I suppose with the Otsuka eGFR data, we're not expecting any surprises.
Okay.
I think the correlation is well understood, but we'll see. You know, with Povi, again, part of the accelerated approval, we're submitting, of course, UPCR and eGFR data. We're not able, because of agency restrictions, can't communicate the eGFR data at this point. Given the high correlation between the two markers, we're not expecting any surprises there.
Okay. Beyond IgAN, you have a program in GMG, generalized myasthenia gravis as well. How important is that market, how quickly can you move into a pivotal study there?
Yeah. As we talk about GMG, we should just talk a little bit about PMN as well.
Yeah.
I think between IgAN, PMN, and GMG, you can already see validation of the thesis that we had about Povi being a pipeline and a product. I am personally really happy to see that playing out so quickly. We do have a trial ongoing in PMN as well, phase II/III there. Specifically, you asked about GMG. We think that Povi is really well-suited for GMG. GMG is sort of a prototypical B-cell-mediated disease.
Yeah.
The majority of patients with GMG have elevated BAFF/APRIL levels. Povi targets BAFF/APRIL, we really feel confident that it's a good fit. There is, as you well know, there is data from another company in China that shows that these mechanisms can have a serious, a significant impact on GMG. For those reasons, we had confidence in moving forward into a phase II trial. I can't really give you an expectation on timing.
Okay.
That trial's enrolling.
Okay
It will take as long as it takes. We do think Povi is well-suited, not only because of the mechanism and the impact on BAFF/APRIL, but also because some of the existing medicines for GMG have limitations because patients have to cycle on and off because of concerns about adverse events. Whereas we believe Povi is gonna be able to be dosed chronically given the safety profile, and that consistency of action on a disease we think is valuable. We think there's a great opportunity. We think Povi is very well-suited to it, but we'll let the data speak for itself.
Okay. Good. Going back to CF for a second and on the maybe some of the next generation agents. I know you have several in development, VX-828, VX-581, VX-272. You guys have been serial innovators in the space. I guess when would you make a go —What would you be looking for to guide a go, no-go decision there? If you see some early biomarker data that looks strong, are there ways to potentially craft a pivotal program to potentially enable a next gen to reach the market, even if you may already be at a ceiling in FEV1 with TRIKAFTA and ALYFTREK? Like, I guess, how can you do What are you looking to try to show so these next generation drugs can actually do better than what's out there?
Yeah
For the high bar you've set?
If you don't mind, I'll just kind of reaching back to what I said earlier. You know, ALYFTREK is the best CFTR modulator—
Yeah
On the market. We think the benefits even over TRIKAFTA are meaningful, and so it sets a really high bar for subsequent development by us or anybody else for that matter.
Yeah.
That said, given our decades of leadership and our commitment to the CF community, we're gonna keep trying to do better than ALYFTREK. One of your questions was about when what are we looking for and when will we advance. I think the answer is that we wanna keep that to ourselves right now. We will have data on VX-828 later this year. Of course, we'll be looking at things like safety and tolerability and sweat chloride. Lo oking at some other dimensions as well. Behind 828, we have two other molecules as well, and they're not so far behind 828. You know, there's a scenario where we wait to see which is the sort of the strongest in the stable there.
It's possible that, you know, the data is so compelling that we move right ahead. We're gonna reserve the right to make that choice. In terms of trial design and—
Like, how do you move it?
Yeah, going faster.
Yeah.
I mean, listen, the agency's, you know, pretty clear on endpoints for CF trials, and they're crystal clear on the existing standard of care. While we like to think of ourselves as always innovating, including in our approaches to regulatory, I think the reality is that we or anybody else is going to have to run a full large trial against the standard of care. I'm not sure there is a way to make that go faster.
Okay
Again, for us or anybody else.
Maybe just in the last few minutes, you guys are in a pretty favorable capital position. We did an analysis, and this was sort of back of the envelope, but from what we can tell, you're one of only two large biopharma companies that are net cash positive, that don't have net debt. You've had some time now to absorb Alpine.
Yeah.
I guess where do you stand with regards to that overall integration? You know, just because you're in a favorable capital position doesn't mean you need to necessarily deploy your capital.
Right.
Like, you can be opportunistic. You have. How do you think about that overall? What's your appetite for looking externally at BD opportunities? Do you like what's out there? Where might you go?
Yeah.
The ways you might deploy this capital.
Yeah. It's a great question, and in my seven years with the company, it's been very interesting.
Yeah.
Which seven years in the scheme of things isn't that long, and the company had only become cash flow positive slightly before that, right?
Yeah.
We don't have a long history with capital deployment, but that said, in the seven years, I think we've been pretty responsible. Top priority does continue to be investment in innovation, both internally and externally. We have an appetite for BD. I am really proud that we got the Alpine deal done in 2024. Again, like I said, it was the right deal, the right disease, the right size.
Yeah
The right stage of development, I think the whole, not only Povi and IgAN, but the pipeline and the product really is validated by what we're seeing. That's encouraging. It's fully integrated at this point. The organization has capacity. I mean, it was a significant effort.
Yeah
To integrate it and accelerate it. You know, I think it's in a steady state right now. BD continues to be a top priority. Maybe the only challenge, and I think it's a, it's a good one, is that we have incredibly high standards for science and medicine, so there just aren't a lot of assets or companies that kinda clear the hurdle for us. When we find one that does, we move decisively, and that's what we did with Alpine. We are active in BD. We'll continue to be active and do what we need to grow the portfolio. As a secondary use of capital, we've also scaled our share buyback program over the last several years. Again, at the beginning of my tenure, we had a $500 million authorization. We currently have a $4 billion authorization.
Okay.
We lean into that authorization in periods when we think the stock is not priced correctly.
Okay.
There have been periods where we've been very light in terms of share repurchase, periods where we've been very heavy in terms of share repurchase. I like the flexibility of that program, the combination of innovation and share buybacks. That's certainly the right order of priority, and that's the program for the next little while.
Any particular profile of what you might be looking for externally? Are you looking for, you know, the next Alpine, like pipeline and a product de-risked late-stage specialty indication, or might the next BD transaction be larger or smaller, different in profile?
Obviously hesitant to try to characterize that.
Okay.
Alpine was a wonderful deal, and of course, if we could find something similar, given the great experience we had with that, it would be wonderful. We're much like we're modality agnostic. We're a bit agnostic on BD too, which is there are certain programs where what we need is early stage technology or access to capabilities. We'll go get that. Yes, if we can find something that is, you know, further along in development where we can still add value, either clinically or regulatory or commercial, that's a great fit for us, and I think we have the confidence and the positive experience from Alpine to, you know, to stay active.
Great. Out of time, Charlie. Thank you so much.
Yeah.
Really great to speak with you.
Thanks for having us.
Appreciate it.