Part I. Financial Information [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents Vertex Pharmaceuticals' unaudited condensed consolidated financial statements for the quarter ended March 31, 2025, including income, balance sheet, and cash flow statements [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Vertex reported increased total revenues for Q1 2025, but net income significantly decreased due to an intangible asset impairment charge and higher operating expenses Q1 2025 vs Q1 2024 Income Statement Highlights (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | **$2,770.2** | **$2,690.6** | | Total Costs and Expenses | $2,140.1 | $1,551.1 | | *Intangible asset impairment charge* | *$379.0* | *$—* | | Income from Operations | $630.1 | $1,139.5 | | **Net Income** | **$646.3** | **$1,099.6** | | **Diluted EPS** | **$2.49** | **$4.21** | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Vertex's balance sheet showed a slight increase in total assets and shareholders' equity compared to year-end 2024 Balance Sheet Summary (in millions) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,674.7 | $4,569.6 | | Total current assets | $10,008.8 | $9,596.4 | | **Total Assets** | **$22,880.5** | **$22,533.2** | | Total current liabilities | $3,783.2 | $3,564.6 | | **Total Liabilities** | **$6,384.2** | **$6,123.6** | | **Total Shareholders' Equity** | **$16,496.3** | **$16,409.6** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased in Q1 2025, while net cash used in financing activities increased due to higher stock repurchases Cash Flow Summary for Three Months Ended March 31 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $818.9 | $1,306.6 | | Net cash used in investing activities | $(55.8) | $(2,136.4) | | Net cash used in financing activities | $(680.4) | $(357.5) | | **Net (decrease) in cash** | **$113.2** | **$(1,202.9)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, collaboration agreements, intangible assets, and segment information, including a significant impairment charge - Acquired in-process research and development (AIPR&D) expenses were **$19.8 million** in Q1 2025, down from **$76.8 million** in Q1 2024. The prior year period included a **$75.0 million** milestone payment to Entrada Therapeutics[36](index=36&type=chunk)[45](index=45&type=chunk) - A full intangible asset impairment charge of **$379.0 million** was recorded in Q1 2025 for the VX-264 clinical program in type 1 diabetes (T1D) after Phase 1/2 trial results led to the discontinuation of its development[74](index=74&type=chunk)[158](index=158&type=chunk) Q1 2025 Product Revenues (in millions) | Product | Q1 2025 Revenue | | :--- | :--- | | TRIKAFTA/KAFTRIO | $2,535.5 | | ALYFTREK | $53.9 | | Other product revenues | $170.8 | | **Total product revenues, net** | **$2,760.2** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, business updates, and strategic outlook, including growth drivers, new product launches, and pipeline progress [Overview and Business Updates](index=23&type=section&id=Overview%20and%20Business%20Updates) Vertex highlights its global biotechnology position, recent FDA approvals for ALYFTREK and JOURNAVX, and progress in its diversified clinical pipeline - The FDA approved ALYFTREK for CF in December 2024 and JOURNAVX for acute pain in January 2025, expanding the company's commercial portfolio[108](index=108&type=chunk)[110](index=110&type=chunk) - For CASGEVY, over **65** authorized treatment centers have been activated globally, and reimbursement agreements are in place with NHS England and in the UAE[115](index=115&type=chunk) - The development of VX-264 for Type 1 Diabetes was discontinued after Phase 1/2 results did not meet the efficacy endpoint[124](index=124&type=chunk) - Enrollment is expected to complete in Q2 2025 for the pivotal Phase 1/2/3 trial of zimislecel for T1D, with marketing applications planned for 2026[124](index=124&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Total revenues for Q1 2025 grew, but operating income fell significantly due to an intangible asset impairment charge and increased operating expenses Q1 2025 vs Q1 2024 Operating Results (in millions) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $2,770.2 | $2,690.6 | 3% | | R&D Expenses | $979.7 | $789.1 | 24% | | SG&A Expenses | $396.4 | $342.7 | 16% | | Intangible Asset Impairment | $379.0 | $— | N/A | | **Income from Operations** | **$630.1** | **$1,139.5** | **(45)%** | - The **30%** increase in development expenses to **$773.6 million** was driven by investments in multiple mid- and late-stage clinical programs, including povetacicept, the T1D study of VX-880, and next-generation pain candidates[153](index=153&type=chunk) - SG&A expenses rose **16%** primarily due to increased commercial investment to support the U.S. launch of JOURNAVX[156](index=156&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Vertex maintained strong liquidity with $11.36 billion in cash and marketable securities, and expects sufficient funds for future operations Financial Position (in millions) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total cash, cash equivalents and marketable securities | $11,357.7 | $11,223.8 | | Total working capital | $6,225.6 | $6,031.8 | - During Q1 2025, the company repurchased **0.9 million** shares for **$416.9 million**. As of March 31, 2025, **$964.4 million** remained authorized under the share repurchase program[77](index=77&type=chunk)[176](index=176&type=chunk) - The company maintains a **$500.0 million** unsecured revolving credit facility, which was undrawn as of March 31, 2025[173](index=173&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference market risk disclosures from the 2024 Annual Report on Form 10-K, reporting no material changes for the quarter - The company refers to its 2024 Annual Report on Form 10-K for disclosures regarding market risk, indicating no material changes during the quarter[178](index=178&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[179](index=179&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[180](index=180&type=chunk) Part II. Other Information [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently subject to any material legal proceedings - As of the filing date, Vertex is not involved in any material legal proceedings[181](index=181&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes from the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - No material changes to the risk factors disclosed in the 2024 Annual Report on Form 10-K have occurred[182](index=182&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity under its authorized program during the first quarter of 2025 Q1 2025 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 533,000 | $419.45 | | Feb 2025 | 213,006 | $471.35 | | Mar 2025 | 186,504 | $498.08 | | **Total** | **932,510** | **$447.03** | - As of March 31, 2025, approximately **$964.4 million** remained available for future repurchases under the current program[187](index=187&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) The company discloses the adoption of Rule 10b5-1 trading plans by two executive officers during the first quarter of 2025 - Two executive officers, Amit Sachdev (EVP, Chief Patient and External Affairs Officer) and Jonathan Biller (EVP, Chief Legal Officer), adopted Rule 10b5-1 trading plans in February 2025[190](index=190&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including an employment agreement, CEO and CFO certifications, and XBRL data files

Core Viewpoint - Vertex Pharmaceuticals reported mixed financial results for Q1 2025, with adjusted earnings per share of $4.06, missing estimates, and a year-over-year decline in earnings of 14.7% [1][2] Financial Performance - Total revenues for Q1 2025 were $2.77 billion, slightly below the consensus estimate of $2.82 billion, but up 3% year-over-year, primarily driven by Trikafta/Kaftrio sales [2][4] - U.S. revenues increased by 9% year-over-year to $1.66 billion, while international revenues decreased by 5% to $1.11 billion, impacted by illegal product availability in Russia [4] - Trikafta sales reached $2.54 billion, a 2.4% increase year-over-year, but fell short of estimates [5] - Alyftrek generated $53.9 million in sales, showing steady uptake since its approval [6] - Other product revenues decreased by 17.4% year-over-year to $170.8 million [6] Cost Structure - Adjusted R&D expenses rose by 31.2% year-over-year to $879 million, while SG&A expenses increased by 22.4% to $333 million due to higher investments in clinical studies and commercial launches [10] - Adjusted operating income was approximately $1.18 billion, reflecting a nearly 12% year-over-year decrease [11] Guidance and Outlook - Vertex raised its total revenue guidance for 2025 to a range of $11.85-$12 billion, reflecting growth in CF medicines and new product launches [12] - Combined adjusted R&D, AIPR&D, and SG&A expenses for 2025 are expected to be between $4.9-$5 billion [13] Pipeline Developments - Vertex is advancing its pipeline in various disease areas, including treatments for diabetic peripheral neuropathy and type I diabetes [14][18] - The company is also developing povetacicept for autoimmune diseases and has ongoing studies for its next-gen Nav1.8 inhibitor [16][15] Market Performance - Vertex shares have increased by 24.3% year-to-date, contrasting with a 2.2% decline in the broader industry [3]

Core Insights - Vertex Pharmaceuticals experienced a significant stock decline of 11.9% following the announcement of its Q1 2025 results, which missed Wall Street estimates despite a year-over-year revenue increase of 3% to $2.77 billion and adjusted earnings rising to $1.24 billion or $4.76 per share [1][2][4] Financial Performance - Q1 revenue reached $2.77 billion, reflecting a 3% increase year over year [1] - Adjusted earnings were reported at $1.24 billion, or $4.76 per share, compared to $1.05 billion, or $4.06 per share, in the same quarter last year [1] - Both revenue and earnings figures fell short of consensus Wall Street estimates [1] Clinical Developments - Vertex has temporarily paused the multiple ascending dose portion of its phase 1/2 study for the experimental mRNA therapy VX-522 due to a "tolerability issue," with no further details provided [2][5] - VX-522 is aimed at treating approximately 5,000 cystic fibrosis patients who cannot benefit from existing CFTR modulators [5] Market Context - The disappointing Q1 results were attributed to an expected revenue decline in Russia, impacted by copycat versions of Vertex's CF therapies, although the company views this as a limited issue [4] - Vertex is in the early stages of launching two new drugs: CF therapy Alyftrek and non-opioid pain medication Journavx, which are expected to drive stronger growth in the future [4] Investment Outlook - Despite the recent stock pullback, Vertex's share price remains positive year to date, and the company is considered a strong long-term investment due to the growth potential of Alyftrek, Journavx, and its pipeline programs [6]

Core Viewpoint - Vertex's Q1 2024 financial results showed slower growth compared to previous quarters, with revenue rising only 3% year-over-year, impacted by a decline in sales in Russia due to intellectual property issues [2][3]. Financial Performance - Total revenue for Q1 2024 was $2.69 billion, increasing to $2.77 billion in Q1 2025, reflecting a 3% growth but missing expectations [1]. - Adjusted earnings per share fell from $4.76 to $4.06, a 15% decrease, also missing expectations [1]. - Trikafta/Kaftrio revenue grew by 2%, from $2.48 billion to $2.54 billion, while other revenue increased by 9%, from $207 million to $225 million [1]. Challenges and Costs - Research and development expenses surged by approximately $190 million compared to the previous year, contributing to the decline in adjusted earnings [3]. - Overhead costs rose by 16%, further impacting the company's profitability [3]. - An asset impairment charge of $379 million was recorded due to the decision not to advance the VX-264 program for type 1 diabetes [3]. Management Outlook - CEO Dr. Reshma Kewalramani expressed optimism about the business's future, highlighting the launch of new treatments and ongoing success in existing markets [4]. - The company is focusing on the new Journavx treatment for acute pain and continued growth in cystic fibrosis and sickle cell disease treatments [4]. Market Reaction - Following the earnings report, Vertex's shares dropped about 3% in after-hours trading, as investors had anticipated stronger growth [5]. - The stock had previously increased by approximately 25% since late December, leading to a pullback after the earnings miss [5]. Future Guidance - Vertex raised the lower end of its full-year 2025 revenue forecast by $100 million, now projecting a range of $11.85 billion to $12 billion, aligning with analyst expectations [6]. - Investors are advised to monitor potential impacts from tariffs or trade barriers, as current guidance does not account for significant cost impacts from anticipated tariffs [7].

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Core Viewpoint - Vertex Pharmaceuticals reported quarterly earnings of $4.06 per share, missing the Zacks Consensus Estimate of $4.22 per share, and showing a decline from $4.76 per share a year ago, indicating an earnings surprise of -3.79% [1] - The company posted revenues of $2.77 billion for the quarter, missing the Zacks Consensus Estimate by 1.72%, but showing an increase from $2.69 billion year-over-year [2] Financial Performance - Over the last four quarters, Vertex has surpassed consensus EPS estimates only once, and has topped consensus revenue estimates two times [2] - The current consensus EPS estimate for the upcoming quarter is $4.25 on revenues of $2.89 billion, and for the current fiscal year, it is $17.69 on revenues of $11.86 billion [7] Market Performance - Vertex shares have increased by approximately 24.5% since the beginning of the year, contrasting with a -3.3% decline in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Medical - Biomedical and Genetics industry is currently in the top 34% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance & Guidance - Vertex reported Q1 2025 total revenue of $2.77 billion, compared to $2.69 billion in Q1 2024[56] - The company raised the low end of its 2025 total revenue guidance to $11.85-$12.0 billion[11] - Q1 2025 non-GAAP operating income was $1.18 billion, with a non-GAAP operating margin of 43%[56] - Q1 2025 non-GAAP net income was $1.05 billion, or $4.06 per share diluted[56] Key Product Updates & Pipeline Progress - ALYFTREK was approved in the U S and U K for CF patients ages 6+, with a strong U S launch and $54 million in revenue in Q1 2025[11, 56] - JOURNAVX, approved in the U S for acute pain, saw strong early uptake with over 20,000 prescriptions filled through April 18th[11, 55] - CASGEVY launch is gathering momentum across all regions, with $14 million in revenue in Q1 2025[11, 56] - The pivotal trial for Zimislecel in T1D is expected to complete enrollment and dosing in Q2 2025, with potential global regulatory submissions in 2026 targeting ~60,000 severe T1D patients in the U S and Europe[11, 17] - Enrollment is complete in the interim analysis cohort for Povetacicept in IgAN, with potential for U S accelerated approval in H1 2026[11, 32] - VX-407 for ADPKD is advancing to Phase 2 in H2 2025, targeting up to ~30,000 patients with a subset of variants in the PKD1 gene[11, 39]

Financial Data and Key Metrics Changes - Vertex Pharmaceuticals reported total revenue of $2,770 million for Q1 2025, representing a 3% growth compared to Q1 2024 [7][41] - U.S. revenue grew by 9% year-over-year, driven by ongoing patient demand and the early launch of AlifTrex [41] - Ex-U.S. revenue declined by 5% year-over-year, impacted by illegal copy products in Russia [42][43] - Non-GAAP earnings per share were $4.06, down from $4.76 in Q1 2024, primarily due to increased operating expenses [45] Business Line Data and Key Metrics Changes - The launch of AlifTrex, Vertex's fifth CF medicine, is showing positive early dynamics and feedback from physicians and patients [7][8] - Gernavix, the first oral non-opioid for moderate to severe acute pain, has been launched and is seeing early uptake [33][34] - CASJEVI generated $14 million in revenue during Q1 2025, indicating initial traction in the market [43] Market Data and Key Metrics Changes - The company is expanding its reach with the global launch of Kashyvi, a gene-edited therapy for sickle cell disease and beta thalassemia, with over 65 authorized treatment centers activated [28][30] - In the U.S., formal commercial coverage for Kashyvi is either in place or provided through single case agreements, with significant progress in Medicaid coverage [29][30] Company Strategy and Development Direction - Vertex is focused on commercialization and expanding its product portfolio, with a strong emphasis on advancing its R&D pipeline [7][8] - The company aims to bring most CF patients to normal levels of CFTR function through its next-generation CFTR regimen [12] - Vertex is also advancing multiple pivotal development programs in diabetic peripheral neuropathy, type one diabetes, and kidney diseases [8][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, raising the low end of 2025 total revenue guidance to a range of $11.85 billion to $12 billion [45][46] - The company anticipates continued growth from its CF medicines and expects to ramp up revenue from Gernavix in the second half of 2025 [46][47] Other Important Information - Vertex ended Q1 2025 with $11.4 billion in cash and investments, having repurchased approximately $425 million worth of shares [45] - The company is committed to investing in R&D, with a guidance range for combined non-GAAP R&D and SG&A expenses set at $4.9 billion to $5 billion for the full year 2025 [48] Q&A Session Summary Question: Feedback on Elephthrex launch and chronic pain indications for Gernavix - Management noted that sweat chloride is not routinely used in clinical practice, but the combination of Elephthrex's benefits, including non-inferiority to Trikafta and additional mutation coverage, is compelling [56][58] Question: Impact of tariffs and Russia issue on CF business - The impact from the Russia issue is estimated at $100 million for Q1 and $200 million for the full year, which is included in current guidance [61][62] - Tariffs currently have an immaterial impact due to a well-balanced global supply chain and minimal exposure to China [62][63] Question: Early adopters of Elephthrex and payer coverage for Gernavix - Uptake of Elephthrex is seen across all patient groups, with the fastest uptake among those newly eligible for CFTR modulators [68] - Gernavix is being used in various settings, including surgery and non-surgery, with broad uptake and positive feedback from physicians [75]

Financial Data and Key Metrics Changes - Vertex Pharmaceuticals reported Q1 2025 revenue of $2,770 million, representing a 3% growth compared to Q1 2024 [5][38] - U.S. revenue grew by 9% year-over-year, driven by patient demand and the early launch of AlifTrex [38] - Non-GAAP earnings per share for Q1 2025 were $4.06, down from $4.76 in Q1 2024, primarily due to increased operating expenses and lower interest income [43] Business Line Data and Key Metrics Changes - The CF franchise continues to grow, with the launch of AlifTrex and ongoing global launch of Kashyvi contributing to revenue [21][26] - AlifTrex has shown strong early uptake, particularly among patients who are naive to CFTR modulators and those switching from Trikafta [24][66] - Gernavix, a new non-opioid treatment for acute pain, has been launched with positive early feedback and broad retail pharmacy stocking [30][31] Market Data and Key Metrics Changes - The company is expanding its market presence with new product launches and regulatory approvals in various regions, including the U.S., UK, and Europe [9][28] - The illegal copy product issue in Russia negatively impacted revenue, with an estimated $100 million impact in Q1 2025 [60][61] - The company has secured reimbursement access for Kashyvi in several countries, enhancing its market potential [28][78] Company Strategy and Development Direction - Vertex is focused on commercialization and expanding its product portfolio, with multiple launches and advancements in its R&D pipeline [5][6] - The company aims to bring innovative therapies to market, including the next-generation CFTR regimen and various pain management solutions [10][12] - Vertex is committed to maintaining attractive profitability while investing in R&D and commercial capabilities [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, raising the low end of 2025 total revenue guidance to $11.85 billion [43][44] - The company anticipates continued growth from its CF medicines and expects to ramp up revenue from Gernavix in the second half of 2025 [45] - Management highlighted the importance of securing payer coverage and expanding access to new therapies as key drivers for future success [35][68] Other Important Information - Vertex has five programs in pivotal development, with multiple additional programs in early and mid-stage clinical trials [48] - The company ended Q1 2025 with $11.4 billion in cash and investments, having repurchased approximately $425 million worth of shares [43] Q&A Session Summary Question: Feedback on Elephthrex launch and sweat chloride as a biomarker - Management noted that sweat chloride is not routinely used in clinical practice, but the combination of Elephthrex's benefits, including non-inferiority to Trikafta and additional mutation coverage, is compelling [55][56] Question: Impact of tariffs on Vertex - Management confirmed that current tariffs have an immaterial impact due to a well-balanced global supply chain and minimal exposure to China [61][62] Question: Early adopters of Elephthrex and payer coverage for Gernavix - Uptake of Elephthrex is seen across various patient groups, with the fastest growth among those naive to CFTR modulators [66] - Gernavix is making progress with payers, aiming for broad coverage with minimal restrictions [68]

Financial Performance [First Quarter 2025 Financial Results](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) Vertex reported a 3% increase in total revenue to $2.77 billion for Q1 2025, with GAAP Net Income decreasing to $646 million from $1.1 billion due to a $379 million impairment charge and increased operating expenses Q1 2025 Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $2.77 billion | $2.69 billion | +3% | | U.S. Revenue | $1.66 billion | - | +9% | | International Revenue | $1.11 billion | - | -5% | | **GAAP Net Income** | $646 million | $1.1 billion | -41% | | **Non-GAAP Net Income** | $1.1 billion | $1.2 billion | -8% | | **Cash & Marketable Securities** | $11.4 billion | - | - | - A significant intangible asset impairment charge of **$379.0 million** was recorded related to the discontinued VX-264 program for type 1 diabetes, impacting GAAP operating income[6](index=6&type=chunk) - Combined GAAP R&D, Acquired IPR&D, and SG&A expenses increased to **$1.4 billion** from **$1.2 billion** in Q1 2024, driven by investments in late-stage clinical programs and the commercial launch of JOURNAVX[5](index=5&type=chunk) [Full Year 2025 Financial Guidance](index=3&type=section&id=Full%20Year%202025%20Financial%20Guidance) Vertex raised the lower end of its full-year 2025 revenue guidance by $100 million to a new range of $11.85 billion to $12.0 billion, while operating expense and tax rate guidance remains unchanged FY 2025 Financial Guidance Update | Guidance Metric | Current FY 2025 | Previous FY 2025 | | :--- | :--- | :--- | | **Total Revenue** | $11.85 billion to $12.0 billion | $11.75 billion to $12.0 billion | | **Combined GAAP R&D, AIPR&D and SG&A Expenses** | Unchanged ($5.55 billion to $5.7 billion) | $5.55 billion to $5.7 billion | | **Combined Non-GAAP R&D, AIPR&D and SG&A Expenses** | Unchanged ($4.9 billion to $5.0 billion) | $4.9 billion to $5.0 billion | | **Non-GAAP Effective Tax Rate** | Unchanged (20.5% to 21.5%) | 20.5% to 21.5% | - The updated revenue guidance reflects continued growth in the Cystic Fibrosis franchise, uptake of CASGEVY, and early contributions from the launch of JOURNAVX[9](index=9&type=chunk) Business and Pipeline Highlights [Marketed Products Update](index=3&type=section&id=Marketed%20Products%20Update) Vertex is seeing strong commercial momentum across its portfolio, with continued growth in the Cystic Fibrosis franchise, expanding global launch of CASGEVY, and rapid initial uptake of JOURNAVX - **Cystic Fibrosis (CF):** ALYFTREK, the new once-daily CFTR modulator, is now approved in the U.S. and U.K., with a positive CHMP opinion in Europe potentially leading to H2 2025 approval, and the KAFTRIO label expanded in the EU to include patients aged 2 and older[12](index=12&type=chunk)[14](index=14&type=chunk) - **CASGEVY (SCD/TDT):** The global launch is expanding with reimbursement secured in England, Wales, Austria, and parts of the UAE, over **65** authorized treatment centers active, and approximately **90** patients starting treatment as of May 1st[13](index=13&type=chunk)[15](index=15&type=chunk) - **JOURNAVX (Acute Pain):** Following its U.S. launch in March, over **20,000** prescriptions have been filled, with payer coverage rapidly expanding to **94 million** lives covered and **42 million** having unrestricted access as of May 1st[18](index=18&type=chunk) [Select Clinical-Stage R&D Pipeline](index=5&type=section&id=Select%20Clinical-Stage%20R%26D%20Pipeline) Vertex's R&D pipeline is advancing with four programs in pivotal development, including povetacicept and zimislecel, both on track for potential 2026 filings, spanning multiple diseases with several studies expected to start or report data in 2025 - The company has four programs in pivotal development, with plans to start a fifth pivotal study for povetacicept in primary membranous nephropathy (pMN) this year[2](index=2&type=chunk) - Key programs are on track for potential regulatory filings in 2026, including povetacicept for IgAN and zimislecel for Type 1 Diabetes[2](index=2&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [Cystic Fibrosis (CF) Pipeline](index=5&type=section&id=Cystic%20Fibrosis%20%28CF%29%20Pipeline) - Phase 3 studies are ongoing to expand labels for TRIKAFTA/KAFTRIO (1-2 year olds) and ALYFTREK (2-5 year olds)[18](index=18&type=chunk) - The next-generation, once-daily combination therapy VX-828 is expected to enter clinical trials in people with CF this year[19](index=19&type=chunk) - The Phase 1/2 study of VX-522, an mRNA therapy, is temporarily paused to assess a tolerability issue observed in the multiple ascending dose portion[19](index=19&type=chunk) [Pain Portfolio (Acute and Neuropathic)](index=6&type=section&id=Pain%20Portfolio%20%28Acute%20and%20Neuropathic%29) - **Acute Pain:** A Phase 2 study of an oral formulation of the next-generation NaV1.8 inhibitor, VX-993, is expected to complete this quarter, with results anticipated in H2 2025[21](index=21&type=chunk)[24](index=24&type=chunk) - **Neuropathic Pain:** A Phase 3 pivotal trial of suzetrigine (the active ingredient in JOURNAVX) for diabetic peripheral neuropathy (DPN) is currently enrolling patients[22](index=22&type=chunk)[24](index=24&type=chunk) [Type 1 Diabetes (T1D)](index=6&type=section&id=Type%201%20Diabetes%20%28T1D%29) - Enrollment and dosing for the pivotal Phase 3 study of zimislecel (VX-880) are expected to be completed in Q2 2025, with marketing applications planned for 2026[23](index=23&type=chunk)[26](index=26&type=chunk) - Development of the VX-264 "cells plus device" program has been discontinued as it did not meet its efficacy endpoint[26](index=26&type=chunk) [Kidney Diseases](index=7&type=section&id=Kidney%20Diseases) - **IgAN & pMN:** The Phase 3 interim analysis cohort for povetacicept in IgA nephropathy (IgAN) is fully enrolled, with a potential accelerated approval filing in H1 2026, and a pivotal Phase 2/3 trial in primary membranous nephropathy (pMN) will begin this year[25](index=25&type=chunk)[27](index=27&type=chunk)[31](index=31&type=chunk) - **AMKD:** Enrollment for the interim analysis cohort of the Phase 3 AMPLITUDE trial of inaxaplin is expected to complete in H2 2025[28](index=28&type=chunk)[31](index=31&type=chunk) - **ADPKD:** Following a completed Phase 1 study, VX-407 will advance into a Phase 2 proof-of-concept study this year in a subset of ADPKD patients[30](index=30&type=chunk)[32](index=32&type=chunk) [Myotonic Dystrophy Type 1 (DM1)](index=8&type=section&id=Myotonic%20Dystrophy%20Type%201%20%28DM1%29) - The company continues to enroll and dose patients in the multiple ascending dose (MAD) portion of the Phase 1/2 trial of VX-670, which will assess both safety and efficacy[29](index=29&type=chunk) Financial Statements [Consolidated Statements of Income](index=11&type=section&id=Consolidated%20Statements%20of%20Income) The income statement for the three months ended March 31, 2025, shows total revenues of $2.77 billion and a GAAP net income of $646.3 million, or $2.49 per diluted share, compared to $1.1 billion, or $4.21 per diluted share, in Q1 2024 Consolidated Statements of Income (in millions, except per share) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total revenues** | $2,770.2 million | $2,690.6 million | | Total costs and expenses | $2,140.1 million | $1,551.1 million | | Income from operations | $630.1 million | $1,139.5 million | | **Net income** | $646.3 million | $1,099.6 million | | **Diluted net income per common share** | $2.49 | $4.21 | [Total Revenues Breakdown](index=12&type=section&id=Total%20Revenues%20Breakdown) Revenue for Q1 2025 was primarily driven by TRIKAFTA/KAFTRIO, which generated $2.54 billion, with newly launched ALYFTREK contributing $53.9 million and other product revenues totaling $170.8 million Total Revenues by Product (in millions) | Product | Q1 2025 Revenue (millions) | Q1 2024 Revenue (millions) | | :--- | :--- | :--- | | TRIKAFTA/KAFTRIO | $2,535.5 | $2,483.6 | | ALYFTREK | $53.9 | $— | | Other product revenues | $170.8 | $207.0 | | **Total revenues** | **$2,770.2** | **$2,690.6** | - In Q1 2025, "Other product revenues" included **$14.2 million** from CASGEVY[40](index=40&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Information](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) Vertex provides a reconciliation of GAAP to Non-GAAP results, adjusting for items like stock-based compensation and impairment, with Q1 2025 Non-GAAP operating income at $1.18 billion and net income at $1.05 billion GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | Q1 2025 GAAP | Q1 2025 Non-GAAP | Q1 2024 GAAP | Q1 2024 Non-GAAP | | :--- | :--- | :--- | :--- | :--- | | Operating Income (millions) | $630.1 | $1,183.0 | $1,139.5 | $1,336.3 | | Net Income (millions) | $646.3 | $1,054.1 | $1,099.6 | $1,241.8 | | Diluted EPS | $2.49 | $4.06 | $4.21 | $4.76 | - Major adjustments from GAAP to Non-GAAP pre-tax income in Q1 2025 included a **$379.0 million** intangible asset impairment charge and **$166.1 million** in stock-based compensation expense[45](index=45&type=chunk) [Condensed Consolidated Balance Sheets](index=15&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Vertex held $11.4 billion in cash, cash equivalents, and marketable securities, with total assets at $22.88 billion and total shareholders' equity at $16.50 billion Condensed Consolidated Balance Sheets (in millions) | Metric | March 31, 2025 (millions) | December 31, 2024 (millions) | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $11,357.7 | $11,223.8 | | Total current assets | $10,008.8 | $9,596.4 | | **Total assets** | **$22,880.5** | **$22,533.2** | | Total current liabilities | $3,783.2 | $3,564.6 | | **Total liabilities and shareholders' equity** | **$22,880.5** | **$22,533.2** |