Vertex Pharmaceuticals - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 was a clean beat: total revenue $3.08B (+11% YoY) and non-GAAP EPS $4.80 versus S&P Global consensus of $3.06B and $4.58, respectively; GAAP EPS $4.20. EPS and revenue beats vs consensus reflect continued CF strength and early contributions from CASGEVY and JOURNAVX (CASGEVY $16.9M; JOURNAVX $19.6M).*
• Full-year guidance refined: revenue raised to $11.9–$12.0B (from $11.85–$12.0B), non-GAAP OpEx increased to $5.0–$5.1B, and non-GAAP ETR cut to 17–18% on one-time tax benefits—net positive for FY EPS.
• Commercial momentum continues: ALYFTREK transitions drive CF, JOURNAVX surpassed 300k prescriptions and 170M covered lives; CASGEVY global uptake building with 165 first cell collections and 39 infusions cumulatively by Sept 30.
• Pipeline catalysts: PoV (povetacicept) BLA rolling review granted, full Phase 3 IgAN enrollment completed; PoV initiated Phase 2/3 in pMN; T1D zimislecel dosing temporarily paused pending internal manufacturing analysis.
• Stock-reaction catalysts: estimate beat, FY tax-rate reduction, elevated PoV visibility (ASN data, BLA start), and accelerating JOURNAVX adoption—against higher OpEx for launches.

What Went Well and What Went Wrong

What Went Well

• Strong top-line and EPS beat: “Vertex delivered strong performance across the board in Q3 with $3,080,000,000 in revenue” and diversified growth from CASGEVY and JOURNAVX.
• Guidance upgrades and tax-rate cut: FY revenue raised; non-GAAP effective tax rate lowered to 17–18% on one-time benefits (Alpine-related R&D credits and deferred tax benefits).
• CF franchise momentum: ALYFTREK adoption progressing in the U.S. and early EU markets; management expects majority of TRIKAFTA patients to transition over time due to once-daily dosing and improved CFTR function.

What Went Wrong

• Elevated operating expenses: non-GAAP combined R&D+AIPR&D+SG&A rose to $1.28B in Q3 (+19% YoY), driven by pipeline acceleration (PoV) and JOURNAVX launch investment; FY non-GAAP OpEx guidance raised to $5.0–$5.1B.
• JOURNAVX gross-to-net still high: PSP activity remains significant while payer contracting finalizes; management declined to guide 2026 gross-to-net yet.
• T1D program delay: zimislecel Phase 1/2/3 dosing temporarily postponed pending internal manufacturing analysis, creating near-term uncertainty on timelines.

Transcript

Operator (participant)

Good day, and welcome to the Vertex Pharmaceuticals' Q3 of 2025 Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ms. Susie Lisa. Please go ahead, ma'am.

Susie Lisa (Senior VP of Investor Relations)

Good evening, all. My name is Susie Lisa, and as the Senior Vice President of Investor Relations, it is my pleasure to welcome you to our Q3 2025 Financial Results Conference Call. On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's CEO and President, Duncan McKechnie, Chief Commercial Officer, and Charlie Wagner, Chief Operating and Financial Officer. We recommend that you access the webcast slides as you listen to this call. The call is being recorded, and a replay will be available on our website. We will make forward-looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission.

These statements, including without limitation, those regarding Vertex's marketed medicines for cystic fibrosis, sickle cell disease, beta thalassemia, and moderate to severe acute pain, our pipeline, and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially. I would also note that select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. I'll now turn the call over to Reshma.

Reshma Kewalramani (CEO and President)

Thanks, Susie. Good evening, all, and thank you for joining us on the call today. Vertex delivered strong performance across the board in Q3, with $3.08 billion in revenue reflecting double-digit growth versus Q3 2024. As we continue to extend our leadership in CF, we're also diversifying our revenue base by product and by geography with the growing global momentum of CASGEVY and the broad uptake of Journavx in acute pain across a wide range of prescribers, pain types, and settings of care. Concurrently, we are forward planning for the fourth vertical of Vertex's growth, centered on renal diseases and povetacicept in multiple indications, starting with Pove in immunoglobulin A nephropathy, or IgAN. Moving to the pipeline and starting with CF, our long-standing goals in CF have been threefold. One, bring forward a medicine that can treat CF patients who make some amount of CFTR protein.

Two, bring forward a medicine that restores CFTR function to normal levels, as measured by sweat chloride, and to do so from as early in life as possible so patients have the potential to live a long and healthy life like people who carry just one CF allele. And three, bring forward a medicine for the last 5% of CF patients who do not make any CFTR protein at all. We are making progress on all three fronts. First, ALYFTREK treats more mutations than TRIKAFTA. The number of patients newly eligible for a CFTR modulator that treats the underlying cause of their disease is approximately 400 more patients in the U.S. and approximately 4,000 more patients in the EU than TRIKAFTA. In total, 95% of all patients are eligible or will be eligible for ALYFTREK as we make our way to lower age groups.

Second, ALYFTREK, which launched in the U.S. late last year and is launching in Europe now, has seen a strong response from patients and physicians who are excited for a once-daily medicine that can bring sweat chloride levels down in patients ages six plus to the lowest levels achieved of any CFTR modulator in this age group. Two additional points to make on sweat chloride. We recently completed the pivotal study for TRIKAFTA for the one to two-year-old patient population, and the results are remarkable. The study's primary endpoint was safety, and the data were consistent with the established safety profile of this medicine. The secondary endpoint was reduction in sweat chloride. The baseline sweat chloride was about 100 mmol per liter, and over the course of the 24-week study, there was a mean reduction of more than 70 mmol per liter from baseline through week 24.

Furthermore, nearly 70% of patients in the study achieved levels of sweat chloride below the 30 mmol per liter threshold, the level considered normal. This magnitude of sweat chloride improvement is unprecedented and the largest reduction we have seen with any CFTR modulator in any population to date. We are on track to make global regulatory submissions for TRIKAFTA in this population of one to two-year-olds in the first half of 2026. Additionally, as we serially innovate, we continue to develop new CFTR regimens with the aim of reaching our long-standing objective of bringing the majority of patients of any age with CF to normal levels of sweat chloride. As I just discussed with the TRIKAFTA one to two-year-old study, we are already there in our youngest patients.

In our ALYFTREK phase III study of six to 11-year-olds, more than 50% of patients got to normal levels of sweat chloride. VX-828, our next-gen 3.0 CFTR corrector, is the most efficacious we have ever studied in vitro to enter the clinic. I am pleased to share we have now initiated the CF cohort in the VX-828 study. And third, regarding our final goal, VX-522, which we're developing for the 5,000 or so patients who cannot benefit from our CFTR modulators, we have resumed enrollment and dosing in the MAD portion of that phase I/II study. Moving then to pain. In acute pain, during the quarter, we completed enrollment in two phase IV trials evaluating Journavx, initiated preoperatively and as part of multimodal approaches to acute pain management.

The interim analysis for one study will be shared at a medical conference later this week, and top-line results for Journavx show safety and efficacy consistent with the pivotal program, accompanied by substantial reductions in opioid use following aesthetic or reconstructive procedures, with approximately 90% of participants being opioid-free compared to less than 10% after similar procedures, per the literature. In neuropathic pain, the first DPN phase III study is well underway, and we have completed work that sets up the initiation of the second DPN phase III study later this month. Transitioning now to the kidney portfolio. Renal medicine is experiencing a renaissance in drug development, and Vertex seeks to be a leader in the field. With our differentiated R&D approach, grounded in causal human biology, validated targets, and biomarkers that translate, we have a broad portfolio of innovative therapies with transformative potential for patients with serious kidney diseases.

Our clinical pipeline has first-in-class or best-in-class assets for four kidney diseases, three of which are already in or approaching pivotal development: VX-407 for autosomal dominant polycystic kidney disease, or ADPKD. Inaxaplin for APOL1-mediated kidney disease, or AMKD. Pove for IgAN. And Pove for primary membranous nephropathy. Starting with VX-407 for ADPKD, where the phase II proof of concept study was initiated earlier this quarter. Recall there are approximately 300,000 patients with ADPKD in the U.S. and Europe. These patients have limited treatment options and no approved therapies that treat the underlying cause of this disease. We believe that up to 10% of patients with ADPKD may be eligible for treatment with VX-407, a first-in-class, small-molecule protein-folding corrector. VX-407 is designed to target the root cause of ADPKD by restoring PC1 protein function.

This phase II proof of concept study is a single-arm trial of 24 patients that evaluates the effect of VX-407 on height-adjusted total kidney volume. The second kidney program to highlight is inaxaplin for primary AMKD, a disease that affects 150,000 patients in the U.S. and EU. Enrollment in the interim analysis cohort of the AMPLITUDE pivotal study has completed. The patients in this cohort are now being treated for 48 weeks, after which we will conduct the interim analysis, and if positive, we will be poised to submit for potential accelerated approval in the U.S. Additionally, we are running the AMPLIFIED study, which is a phase II proof of concept study of inaxaplin in patients with AMKD with moderate proteinuria or patients with AMKD and diabetes, populations not being studied in the AMPLITUDE trial. AMPLIFIED is on track to complete enrollment by the end of this year.

Now turning to povetacicept. The lead and first indication for Pove is IgAN, a disease impacting more than 300,000 diagnosed patients in the U.S. and Europe and over 1 million patients globally. There are four points to highlight in this program. First, we completed enrollment of the interim analysis cohort of the RAINIER phase III trial earlier this year. Second, the FDA has granted Pove breakthrough therapy designation and rolling review for our BLA. Third, we have completed the studies to support the launch of Pove for at-home self-administration with a subcutaneous autoinjector. Lastly, the new news I'm very pleased to share tonight is that we have completed full enrollment in the RAINIER phase III trial. The trial enrolled approximately 600 patients in approximately 15 months, the fastest of any contemporary phase III study in IgAN, and is a testament to the significant opportunity ahead for Pove.

Here's the outlook when you put these four major milestones together. With the rolling review that the FDA has granted, we will begin our submission for potential accelerated approval before the end of this year. Once the interim analysis cohort completes 36 weeks of treatment, assuming the results are positive, we will complete our BLA submission for potential accelerated approval in the U.S. in the first half of 2026. We have used a priority review voucher, and thus we have certainty that Pove's BLA in the IgAN indication will receive an expedited priority review in the U.S. That is a six-month review versus a traditional 10-month review. Next, and consistent with this pipeline and product potential, we are pleased to have initiated the pivotal study for the second potential renal indication for Pove in primary membranous nephropathy.

There are approximately 150,000 patients with membranous nephropathy in the U.S. and Europe and nearly 500,000 globally. Today, there are no approved therapies that treat the underlying cause of this disease, leaving a significant patient population with high unmet need. Pove was recently granted Fast Track designation by the FDA in membranous nephropathy, and our phase II/III adaptive study OLYMPUS is now underway. One final note in R&D regarding Zimislecel in type 1 diabetes. While we have completed enrollment in the pivotal trial for T1D, we have temporarily postponed completion of dosing while we work through an internal manufacturing analysis. As this is an ongoing pivotal trial, it is critical to maintain study integrity, and so we won't be providing any additional detail. I look forward to updating you once dosing is complete.

In closing, Vertex now has seven commercialized medicines, five programs in phase III development, and an exciting earlier stage R&D pipeline. Accordingly, as we drive to achieve our R&D milestones, we're executing on the concurrent work of getting our approved medicines to more patients around the globe and preparing for additional near-term potential launches. To tell you more about our commercial efforts, I'll now turn over the call to Duncan.

Duncan McKechnie (Chief Commercial Officer)

Thanks very much, Reshma. I will focus my comments tonight on the CF franchise, global launches of ALYFTREK and CASGEVY, the U.S. launch of Journavx, and commercial planning for our potential launches in four serious kidney diseases, the first of which will be Pove in IgAN. Beginning with CF, our CF franchise delivered strong double-digit growth this quarter as we continue to grow the number of eligible patients taking our CFTR modulators.

This reflects the ongoing launch of ALYFTREK, progress with younger patients and patients with rare mutations, enhanced survival benefits of our therapies, and expansion into new geographies such as Brazil and Turkey. Focusing on ALYFTREK, our fifth therapy approved to treat the underlying cause of CF. We believe ALYFTREK is the best CFTR modulator available for eligible patients, given that when compared to standard of care TRIKAFTA, ALYFTREK provides further improvements in CFTR function, as measured by sweat chloride, is indicated for additional rare mutations, and offers the convenience of once-daily dosing. The U.S. launch of ALYFTREK is progressing well across all patient groups. We have seen particularly rapid uptake in those patients who are naive to CFTR modulators, and the vast majority of previously untreated patients in the U.S. have now been initiated on ALYFTREK.

We also see continued uptake by those patients who have previously discontinued one of our other CFTR modulators. Lastly, the pace of transition patients, primarily those switching from TRIKAFTA, remains steady and represents the majority of patients on ALYFTREK in the quarter. Outside the U.S., the early launch of ALYFTREK is off to a strong start in multiple European countries where patients have reimbursed access: England, Ireland, Germany, and Denmark. And the feedback has been very positive, both in terms of the clinical profile and once-daily dosing. And as Reshma mentioned, there are nearly 10 times as many newly eligible patients in Europe with rare mutations for TRIKAFTA and ALYFTREK than in the U.S., and no additional liver monitoring requirements.

Overall, we are pleased with the response to ALYFTREK and continue to expect that the majority of patients around the globe will transition to ALYFTREK over time, given its multiple benefits. Moving to CASGEVY, our transformative one-time treatment for patients with severe sickle cell disease and beta thalassemia. The momentum continues to build as we enter the last few months of 2025. As a result, we have a clear line of sight to over $100 million in CASGEVY revenue this year and significant growth in 2026. Importantly, we have seen continued progress in securing access to CASGEVY around the world, with the notable recent addition of reimbursement in Italy for TDT and SCD. Italy has the second-largest population in the world of TDT patients, at approximately 5,000 patients, about half of whom are eligible for CASGEVY.

As further evidence of CASGEVY building momentum across all three regions, the U.S., Europe, and the Middle East, I'm pleased to report that since launch and through the end of Q3 2025, nearly 300 patients have been referred by their physicians to an ATC to initiate the treatment process. More than 160 patients now have had their first cell collection. This includes 110 in the first nine months of 2025, double our full year 2024 total, and a total of 39 patients have received their infusions of CASGEVY-edited cells, including 10 patients in the Q3 of 2025. We see continued growth in ATCs onboarding and initiating patients in the U.S., Europe, and the Middle East as the treatment teams become more familiar with the process.

Through the end of September, 25 ATCs had initiated more than five patients, and at least one ATC in each of the three regions had initiated 20 or more patients. Given the very well-understood duration of the treatment journey and the fact that we now have significant numbers of patients at every stage in the process, CASGEVY has a strong outlook, and we are excited to serve the growing numbers of patients through the end of this year, into 2026, and beyond. Now shifting to the launch of Journavx in moderate to severe acute pain. We continue to see a very positive reaction to this novel, non-opioid option for the treatment of moderate to severe acute pain. As a reminder, our goals in 2025 were firstly, secure broad payer coverage. Secondly, ensure hospital and health system access through P&T reviews and formulary adoption.

And thirdly, drive broad usage of Journavx across a range of physician and pain types with a seamless experience for physicians and patients alike. We're executing well on all fronts, and I'll now provide some details. We continue to make good progress with payers. As of mid-October, across commercial and government payers, over 170 million lives have reimbursed access t

o Journavx, up from the 150 million we discussed on our Q2 call. With commercial payers, our negotiations continue to progress favorably. We have formal coverage under two of the three large national PBMs and are working to add the third. In Medicare, we continue to engage with plans to secure coverage. And for Medicaid patients, through mid-October, we now have a total of 19 states, up from 16 last quarter, that are providing access to Journavx without prior authorization or step edit requirements.

We continue to expect that coverage across commercial, Medicare, and Medicaid payers will expand through the balance of 2025 and into 2026. Note that even after national payers grant formal coverage for Journavx, it can take time to ensure that all lives are covered in their downstream plans. Therefore, we plan to extend our Patient Support Program, or PSP, into 2026 to ensure that if a physician makes the decision to prescribe Journavx for their patient with acute pain, the patient will receive the medicine. Recall, the PSP only kicks in for those patients without coverage or with highly restricted coverage, so if a patient's plan reimburses Journavx, the PSP program is not triggered. Secondly, we're making excellent progress with P&T committees at the approximately 150 healthcare systems and 2,000 hospitals we're targeting.

More than 750 hospitals and approximately 90 of the 150 targeted large healthcare systems have now added Journavx to their formularies, protocols, or order sets. Thirdly, we continue to see broad adoption of Journavx by a wide range of physicians, including orthopedic surgeons, plastic surgeons, anesthesiologists, pain specialists, and dentists. They are using Journavx in a wide range of pain settings, including surgical and non-surgical procedures such as joint replacement and repair, shoulder surgeries, fractures and sprains, and dental procedures. In hospital systems and clinics that have adopted Journavx, we have received impressive feedback from physicians in terms of very significantly reduced or eliminated opioid usage, consistent with the phase IV study results Reshma mentioned earlier. Reports from patients also continue to be very positive in terms of how well Journavx managed their pain, in addition to being well tolerated.

We also continue to see that Journavx is promotionally responsive to our field representative calls, as well as our digital engagement with physicians. There is a clear correlation between frequency of calls and depth of prescription writing by physicians. For these reasons, and as we discussed last quarter, we're planning to add 150 additional representatives in the Q1 of 2026, which will enable us to increase our frequency of calls with existing prescribers and expand our coverage to additional physicians, and to raise awareness of Journavx among consumers, we have a wide range of communication initiatives ongoing, including a partnership with basketball superstar Jayson Tatum, as he shares his Journavx treatment journey experience post his Achilles injury during the playoffs last season.

Finally, as evidence of the growing reception in the marketplace, there have now been more than 300,000 prescriptions filled for Journavx across the retail and hospital settings as of mid-October. We continue to have high confidence that there is a significant unmet need for an effective non-opioid option to treat moderate to severe acute pain, and we're in the early days of creating another multi-billion dollar franchise for Vertex. I'll close with some comments on our commercial planning for our potential launches in renal medicine, where we have begun the build-out of our commercialization team. We expect that our renal franchise will become a significant growth driver and value generator for Vertex over the next several years. I'll focus my comments this evening on our first step in that direction, Pove in IgAN. We believe that Pove offers a unique combination of attributes with a compelling clinical and patient profile.

Firstly, Pove is a fusion protein specifically engineered for better tissue penetration and to deliver optimized, targeted dual inhibition of the BAFF and APRIL cytokines. In the RUBY-3 clinical data we've seen to date, Pove delivers substantial reductions in Gd-IgA1, hematuria, and proteinuria. Secondly, among the APRIL-only or dual BAFF/APRIL inhibitors, Pove has the most convenient dosing and administration for patients. Every four weeks, at-home administration via a subcutaneous autoinjector and the lowest dosage volume of less than 0.5mL. Thirdly, Pove is the only dual BAFF/APRIL inhibitor in pivotal trials for multiple serious kidney diseases, IgAN and PMN. We believe Pove has a superior mechanism of action, a superior clinical profile, and will deliver a superior patient experience. In short, we believe Pove holds best-in-class potential.

We're excited to build out our renal franchise and prepare for commercialization in our fifth disease area with Pove as a potential best-in-class treatment for IgAN. I'll now turn the call over to Charlie to review the financials.

Charlie Wagner (Chief Operating and Financial Officer)

Thanks, Duncan. Vertex's Q3 2025 double-digit revenue growth demonstrates our consistent, strong performance and attractive growth profile. Q3 2025 total revenue increased 11% year-over-year to $3.08 billion. U.S. revenue growth of 15% year-over-year was driven in CF by ongoing patient demand and favorable net pricing versus prior year, as well as contributions from ALYFTREK, CASGEVY, and Journavx. Revenue outside the U.S. grew 4% year-on-year, including mid-single-digit CF growth and a contribution from CASGEVY. Included in Q3 2025 total global revenue and the regional growth rates was $17 million of CASGEVY revenue and $20 million from Journavx.

Q3 2025 combined non-GAAP R&D, acquired IP R&D, and SG&A expenses were $1.28 billion, compared to $1.08 billion in the Q3 of 2024. Non-GAAP operating expenses increased 19% year-on-year, driven primarily by the continued advancement of our broad later-stage pipeline, including the acceleration of Pove development programs, as well as the build-out of commercial capabilities in pain. Acquired IP R&D expenses were $55 million, compared to $15 million in the Q3 of 2024. Q3 2025 non-GAAP operating income was $1.38 billion, compared to $1.31 billion in the Q3 of 2024. Q3 2025 non-GAAP effective tax rate was 17.6%, including benefits from R&D tax credits as a result of last year's Alpine acquisition. Q3 2025 non-GAAP net income was $1.24 billion, compared to $1.14 billion in Q3 of 2024.

Q3 2025 non-GAAP earnings per share were $4.80, an increase of 10% compared to $4.38 in the Q3 of 2024. We ended the quarter with $12 billion in cash and investments after deploying approximately $1.1 billion to repurchase more than 2.7 million shares in the Q3. Year to date, we have spent over $1.9 billion to repurchase approximately 4.5 million shares. Our priorities for cash deployment remain unchanged. Innovation and growth fueled by investments, both internal and external, with a second priority of share repurchases. Now switching to guidance. With only one quarter remaining in 2025, we are updating our financial guidance for revenue, operating expenses, and taxes. We now expect 2025 total revenue to be in a range of $11.9 to 12 billion versus prior guidance of $11.85 to 12 billion, representing growth of approximately 8% to 9% for the full year at current exchange rates.

This outlook reflects our expectation for continued growth from our portfolio of CF medicines, including the ongoing launch of ALYFTREK in the U.S. and recent launches in Europe. As Duncan mentioned, full-year revenue guidance also includes over $100 million of CASGEVY revenue as we treat more patients in geographies where we have secured regulatory approval and reimbursement. In addition, guidance reflects further contribution from Journavx in the Q4 due to growing prescription volumes. We are also refining guidance for combined non-GAAP R&D, acquired IP R&D, and SG&A expenses, and now expect operating expenses of approximately $5 to 5.1 billion versus prior guidance of $4.9 to 5 billion for the full year. This is primarily due to the acceleration in Pove development programs across multiple indications and increased investment in commercial and marketing activities to support the launch of Journavx.

There is no change to our estimate of approximately $100 million in projected IP R&D charges for the full year, including the recently announced collaboration with Enlaza. We continue to expect an immaterial cost impact from tariffs in 2025, based on what we know today, due to our significant U.S. presence and our geographically diverse supply chain. Of course, given the dynamic nature of the tariff situation, including the potential for sector-specific tariffs, this outlook is subject to change. And finally, we are lowering our expected full-year 2025 non-GAAP effective tax rate guidance from a range of 20.5% to 21.5% to a revised range of 17% to 18% to incorporate several one-time tax benefits. These benefits include those recognized in Q3 from Alpine-related R&D tax credits, as well as anticipated recognition in Q4 2025 of previously deferred tax benefits.

In closing, Vertex yet again delivered strong results in Q3 2025, growing and diversifying our revenue with the launch of two new products in the U.S., ALYFTREK and Journavx, the launch of ALYFTREK in Europe, and the continued global launch of CASGEVY. We also made significant pipeline progress across the portfolio in mid and late-stage clinical development, including Pove's pipeline and product potential and continued advancement. These and other anticipated milestones of continued progress in multiple disease areas are detailed on slide 17. We look forward to updating you on our progress on future calls. I'll now ask Susie to begin the Q&A.

Susie Lisa (Senior VP of Investor Relations)

Thanks, Charlie, and apologies, we understand there were issues with the webcast, and for that, we're sorry. We're working with our vendor for this call. We'll also look to get the transcript out as soon as possible. Chuck, can you please give the Q&A instructions?

Operator (participant)

Yes, ma'am. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone, and if you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Geoff Meacham with Citibank. Please go ahead.

Geoff Meacham (Head of Healthcare Research)

Hey, guys. Afternoon. Thanks for the question. Just have two quick ones. On ALYFTREK, just wanted to get maybe a bit of a status update. Do you think you're hitting a tipping point with regard to kind of patient switching or those that are maybe kind of new starts? And just curious about the monitoring requirement, whether that's sort of eased a little bit. And then the second thing is, as you guys look forward, Reshma, I know you're a nephrologist by training, so as you get closer to the Pove data set, maybe just help us with kind of how you're thinking about the differentiation here versus the many BAFF/APRIL type of assets here. I know, obviously, it's data-dependent. I want to get your high-level comments. Thank you.

Reshma Kewalramani (CEO and President)

You bet. Geoff, let me ask Duncan to take the question on ALYFTREK, and I'll come back for Pove.

Duncan McKechnie (Chief Commercial Officer)

Good afternoon, Geoff. So yes, as far as ALYFTREK is concerned, I would say that the vast majority of the newly eligible patients in the U.S. have now started on ALYFTREK, and we're seeing the discontinued and transition patients transition nicely over to ALYFTREK as physicians are navigating the monitoring requirements over the first few months.

The patient transitions remain steady, and we're very happy with the progress. Outside the U.S., we're also seeing strong uptake in those countries with access. And I would add that in the 10 months since the launch of ALYFTREK, it's generated close to $500 million of sales in revenue. So overall, we're pretty happy with the pace of progress on ALYFTREK.

Reshma Kewalramani (CEO and President)

Geoff, on povetacicept acceptance, let me focus my comments on IgAN. It is really very exciting. The data that we're going to share at the ASN, which is this coming week, is more patients' worth of data and longer follow-up. And you should look for the endpoints of proteinuria, hematuria. You should also look for the pharmacodynamic marker in IgAN, which is called Gd-IgA1. I am very, very excited about these results.

To me, if you think about IgAN and what it means, it is a chronic disease that unfortunately results in death, dialysis, or transplantation. That's what ends up happening to our patients. And so what we're really trying to do here is get those autoantibodies under control in order to mitigate that endpoint. If you look at the disease, it's a disease of elevated APRIL levels and elevated BAFF levels. It's not the case that just one of those two cytokines is elevated. So it makes all the sense in the world to me to inhibit both, which is what Pove does. The next thing to look at is the preclinical data. And you've heard me say before, the reason we were so excited about Alpine and Pove is because it was specifically engineered for higher tissue distribution, potency, and binding affinity.

And then you translate that to the early data that we see in the clinic through Ruby-3, and it looks really good. Last thing I'll say is for patients who have this as a chronic disease, the important thing is that they have a medicine, a biologic that they can take over time that is best for them. And from all of the data, not only in market research for IgAN patients, but you look at biologics in the marketplace, it's about the dosing, small volume. It's about having an autoinjector and monthly dosing, which are key, and that's what we have with Pove. Last thing to say, I do think nephrologists are also going to be interested in the fact that we've already started our phase II, III trial in membranous. So all in all, it's pretty neat.

Geoff Meacham (Head of Healthcare Research)

Great. Thank you.

Reshma Kewalramani (CEO and President)

You bet.

Operator (participant)

The next question will come from Salveen Richter with Goldman Sachs. Please go ahead.

Salveen Richter (Lead Analyst of US Biotechnology)

Good afternoon. Thanks for taking my question. Just to follow up on Geoff's here with the Pove data. With all those markers that we're going to look at in the longer-term phase 2 data, maybe put that in context for us about how to think about the read-through to eGFR benefit and just kind of overall positioning as we look to these other two drugs that are out there or more. And then secondly, on the pain franchise, you've talked for a bit about getting that third PBM on board prior to really opening up distribution. Could you just help us understand what's being finalized on that end? Thank you.

Reshma Kewalramani (CEO and President)

Yeah. Let me take the Pove question first, Salveen, and then I'll ask Duncan to comment on the last of the three PBMs.

So Salveen, in many renal diseases, including in IgAN, there is a very strong association of correlation between reduction in proteinuria and stabilization in GFR. And I expect that that will hold up in all of these phase III data that we see. I think the important thing to note, though, is that while the final endpoint, that's to say even for traditional approval, is GFR showing the stabilization of GFR, what we're really trying to do for our patients is to prevent those long-term complications of death, dialysis, and transplantation. It's just that the endpoint, if we measure that, would take too long. So the agency has accepted GFR slope stabilization of that as the final endpoint.

And so when you look at all of the evidence that's been generated over the course of time, the medicine that has the best reductions in proteinuria, in hematuria, in this Gd-IgA1, I think that's the medicine that's going to be best for patients if you think about the long-term outcome. But I do think that the association of proteinuria and GFR will hold, and I expect that you will see that. Duncan.

Duncan McKechnie (Chief Commercial Officer)

Salveen. So I think it's important to note that we're building a long-term pain franchise here where clearly we want to secure broad access for patients, but we also want to ensure long-term value of our medicines. So we feel very happy with the progress we've made so far in securing 170 million lives for Journavx in a relatively short period of time.

I would say that we're in productive ongoing conversations with the third PBM, and obviously, we'll keep you updated as we have news there, and as you know, in the meantime, patients who are not covered can get Journavx through the patient support program, so overall, we're pleased with the access progress to date. It will continue to expand over the balance of 2025 and 2026, and in the meantime, of course, a key performance indicator is continued physician uptake and prescription growth while we secure access, and on that point, although you didn't ask, I would just reference the prescription growth. We saw 10,000 prescriptions in Q1, 90,000 prescriptions in Q2, 170,000 prescriptions in Q3, and of course, several thousand in October, so we're very happy with the acceleration we're seeing in prescriptions while we finalize access.

Operator (participant)

The next question will come from Jessica Fye with J.P. Morgan. Please go ahead.

Jessica Fye (Managing Director and Equity Research Analyst)

Hey, guys. Good afternoon. Thanks for taking my question. I was wondering if you could just touch on what your current priorities are as it relates to capital allocation and specifically on the business development front. Is there a phase of development you feel is the sweet spot for assets that Vertex brings in? Thank you.

Reshma Kewalramani (CEO and President)

Charlie.

Charlie Wagner (Chief Operating and Financial Officer)

Yeah. Just no change in our priorities for capital allocation. We've said for some time now our top priority is to reinvest in the business, both internally and externally, to drive innovation and growth. That continues to be true. We are investing in our pipeline right now in commercialization. We are making capital investments in support of the business as well, and that remains the top priority. A secondary priority for us is share buybacks.

We were very active in the Q3, taking advantage of the volatility in the stock price after the last earnings call. So we were out there buying aggressively in the quarter at prices that we think are quite attractive. And so that combination of reinvestment in the business as well as share buybacks will continue to be the priority going forward. In terms of whether we are looking for assets of any specific stage of development, I think you know with our sandbox approach, we are always looking for the best technology and the best assets in any of the disease areas where we are focused. That sometimes takes the form of enabling technology. Sometimes it takes the form of programs that are either preclinical or in the clinic. We were certainly very happy with the Alpine acquisition last year.

If we could find something like that again, we would certainly be interested. But we are open to all types of deals that move our strategy forward in our different disease areas.

Jessica Fye (Managing Director and Equity Research Analyst)

Thank you.

Operator (participant)

The next question will come from Evan Seigerman with BMO Capital. Please go ahead.

Evan Seigerman (Managing Director and Head of Healthcare Research)

Hi, guys. Thank you so much for taking my question. I wanted to touch on the competitive profile of Pove. We talked about having an autoinjector and Q4 week dosing. Can you put into context of how important this is, maybe in relationship to other competitive products that could be on the market, and why you think this could give you a competitive advantage?

Reshma Kewalramani (CEO and President)

Yeah. Evan, I'll tag team that with Duncan so he can give you a commercial perspective. The autoinjector once-monthly dosing in small volume are really, really important. Of course, this means we've already thought through safety, efficacy, benefit, risk, and a really good-looking clinical profile. But especially in diseases where you're using a biologic, this administration set of features just cannot be underestimated, and I'll turn it over to Duncan to tell you about some examples in the field and maybe some market research as well. Duncan.

Duncan McKechnie (Chief Commercial Officer)

Yeah, thank you for the question, so I mean, I would step back a little bit and just make the point that for a variety of reasons and attributes, we believe that Pove offers best-in-class potential in terms of its mechanism of action, the way it's been specifically engineered for the disease, the compelling clinical profile, and then, as you allude to, the patient profile. The key here is that it's dosed every four weeks at a very low volume. It can be administered at home.

Those attributes are incredibly important, especially in biologics. They've been shown to significantly reduce patient burden, improve adherence, and increase treatment satisfaction in other biologics previously launched. So we do think, although it sounds unimportant, actually, this is a very important differentiator for Pove alongside the mechanism of action and the excellent clinical data that we're seeing. So we're super excited to be bringing it to market. And for all of those reasons, we do think it has best-in-class potential.

Operator (participant)

The next question will come from Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad (Managing Director of US Equity Research)

Hi, guys. Good evening. Thanks for taking my question. Can you just provide some clarity on what the FDA has seen thus far that's let them give you the confidence to start the filing early and get this breakthrough designation for Pove?

Reshma Kewalramani (CEO and President)

Yeah. Sure thing. Tazeen, we've had the opportunity to complete what's called a pre-BLA meeting. In other words, we've had the opportunity to sit with the agency, review all of the data to date, talk through what the filing submission, what's called the CTD, will look like. And so they have access to all of our data and our plans for how we expect to be filing. After we went through that meeting, that's when we got the breakthrough designation. It's also when we received their endorsement for rolling submission. I would say that the reason they have granted us breakthrough designation is probably the same as for most medicines that get it. They see unmet need. They see a medicine that is attractive and can treat the disease at hand, and that they have enthusiasm to receive the filing so that they can plan their workload.

Operator (participant)

The next question will come from Terence Flynn with Morgan Stanley. Please go ahead.

Terence Flynn (Biotech Analyst)

Great. Thanks for taking the question. I was just wondering, Reshma, if there's any update on the NOPAIN Act and what you guys are doing on that front. And then I know you mentioned there's some phase IV data for Journavx that's coming up here. Are we going to see anything on time to discharge setting? I know that's something that some physicians have asked about in the past. Thanks so much.

Reshma Kewalramani (CEO and President)

Yeah. Sure thing, Terrence. On the NOPAIN final list, it was supposed to be out on 31 October 2025, so last week Friday. And we understand that it's been postponed because of the government shutdown. We continue to advocate vigorously for the inclusion of Journavx.

As we've talked before, while the dollar number may be small for hospital, outpatient, or surgery center for Medicare patients, we think that the principle is really important. The NOPAIN Act was literally designed for a medicine like Journavx. So we continue to have our conversations, but the finalization of that list and the release of that list has been delayed. I don't have an updated timeline for when it will be out. On the phase IV data, we've now completed enrollment in two phase IV studies. One is multimodal therapy and use prior to and post-op in aesthetic and reconstructive surgeries, and another one is in orthopedic and general surgeries. The data that you're going to see later this week is in the aesthetic and reconstructive surgery area. And the thrust of the data is about opioid reduction compared to what's seen in the literature.

We have a whole host of additional studies coming that look at a variety of other endpoints, including discharge, but those data are not ready just yet.

Operator (participant)

The next question will come from David Risinger with Leerink Partners. Please go ahead.

Edward Tan (Equity Research Analyst)

Thanks very much. I'm Edward calling on behalf of David Risinger. So two questions, please. For Journavx, how many of the 170 million lives have unrestricted access, and how many commercial lives are covered by the major PBMs? And the second question on the next generation CF candidate VX-828. Can you provide more details on the phase II POC news ahead and also timing for data disclosure? Thank you.

Yeah. Let me take the VX-828 question first, and I'll turn it over to Duncan to talk to you about Journavx.

So on VX-828, the important thing to know is it is the most efficacious medicine in vitro that we have ever studied. And you know that our in vitro systems in CF have translated time and again, not only qualitatively but quantitatively to what we see in the clinic. So 828 is the most efficacious that we've seen so far. You should expect to see data next year. We're in the patient cohort now. I'll give you more specific timelines in the coming months, but you should see data next year. And in terms of what we're looking for, look, it is getting hard to do better than what we have today. The data that I described of TRIKAFTA, one to two-year-olds, is truly remarkable and unprecedented.

But if it is possible to do better, and by that I mean bring more patients across all age groups to lower levels of sweat chloride, i.e., higher levels of CFTR protein function, that's what we are committed to do, and that's what we're looking for with VX-828. Duncan, a couple of words on Journavx and the 170 million lives, and tell us about the kind of coverage.

Duncan McKechnie (Chief Commercial Officer)

Yeah. So thank you for the question. So to answer it, of the 170 million lives, 113 million are unrestricted. So as I've communicated before, all of the contracts that we have done, all of the agreements we have in place are for no prior authorization, no step edit. So we're very pleased indeed with that progress.

And as I alluded to in one of the earlier questions, we're continuing to make progress with the third PBM, where we're in active conversations, and indeed with the Medicare plans as well.

Operator (participant)

The next question will come from Phil Nadeau with TD Cowen. Please go ahead.

Philip Nadeau (Managing Director and Senior Research Analyst of Biotechnology Team)

Good afternoon. Thanks for taking our questions. Two commercial questions for us. First, on Journavx, based on prescription trends and the prescription numbers that you said, it seems like gross-to-net continues to be quite high. Can you give us a sense of where it currently is and where it could be in 2026? And the second, on the ALYFTREK, you said a couple of times, steady transition from TRIKAFTA to ALYFTREK. When do you think you'd be in a position to give formal guidance, say, three years from now, some percentage of TRIKAFTA patients will be transitioned to ALYFTREK? Thank you.

Reshma Kewalramani (CEO and President)

Sure thing. So let me take the second question first, and then I'll turn it over to Charlie for gross-to-net. As you heard Duncan say, in the coming couple of years, we expect the majority of patients around the globe who are on TRIKAFTA to transition to ALYFTREK because we believe ALYFTREK is the best available CFTR modulator. Charlie, a couple of words on gross-to-net and Journavx.

Charlie Wagner (Chief Operating and Financial Officer)

Yeah. So the three drivers, of course, of gross-to-net are payer discounts, wholesaler discounts, and the impact of the patient support program, with that last one being most significant in 2025. While we are working to expand payer coverage and finish some of the contracting work that Duncan talked about, the patient support program continues to be very active, and that's resulting in elevated gross-to-net for the time being.

We're not yet ready to give guidance for 2026 on that until we've landed on the mix and the book of business with payers. I think it would be early to say anything about that for next year.

Philip Nadeau (Managing Director and Senior Research Analyst of Biotechnology Team)

Great. Thanks for taking our questions.

Reshma Kewalramani (CEO and President)

You bet.

Operator (participant)

The next question will come from Paul Matteis with Stifel. Please go ahead.

Hi there. Thanks so much for taking our questions. This is Julian for Paul. Just wondering if there's any updated thinking around the potential development of suzetrigine in chronic pain following the update that you provided last quarter. Just wondering if there's any other indications you're pursuing or if there's any other way in which you're considering potentially even acquiring an asset to play in the space longer term as there's been greater interest from competitors. Thank you.

Reshma Kewalramani (CEO and President)

Yeah. No new updates for you on suzetrigine in the peripheral neuropathic pain area. We are hyper-focused on getting our DPN study number two up and running to secure the DPN indication, for which there is a clear pathway, concrete next steps for us to take, and an ability to serve 2 million patients. With regard to our ideas for how to expand to the broader PNP market, there's a couple of things there. We're working through what we believe would be the most efficient way to get there. We're also thinking through timelines for our NaV1.8 inhibitors, i.e., Journavx, and our NaV1.7s, and the possibility of a combination. So more to come on that. PNP remains very interesting to us, but the focus now is on securing the DPN indication, getting the second DPN study, diabetic peripheral neuropathy study, up and running.

And I do think that we'll be completing both those studies by the end of next year. Great. Thank you.

Operator (participant)

The next question will come from Gena Wang with Barclays. Please go ahead.

Gena Wang (Managing Director of Biotech Equity Research)

Thank you for taking my questions. So maybe I would just have one quick question regarding the Pove data later this week. I know you cannot disclose anything regarding the actual data, but just wondering, if we look at Vera data, they're already setting eGFR bar pretty high, basically flat, or the slope is relatively, I think the slope is minus 0.1. So here, do you think with your drug profile, do you think it could actually improve the eGFR with the longer treatment?

Reshma Kewalramani (CEO and President)

Yeah. Gina, I do understand your question. I think you'll be pleased with the data that we show at ASN later this week. I certainly am.

I would say the same thing that I said to Salveen. Reductions in proteinuria in a number of homogeneous renal diseases with proteinuria have translated to stabilization of GFR. And so I think that that will happen. I think the more important question is, over the long term, as we treat our patients with IgAN or membranous, and we have medicines that can get patients to lower levels of proteinuria, completely eliminate, if not decrease, hematuria, get to low levels of these aberrant Gd-IgA1 antibodies. I think that's where we're going to see practice move. And I think you're already seeing that with KDIGO guidelines, for example. I won't jump ahead of the data coming at ASN, but you will see eGFR data from the povetacicept IgAN program.

Gena Wang (Managing Director of Biotech Equity Research)

Thank you.

Reshma Kewalramani (CEO and President)

You bet.

Operator (participant)

The next question will come from Mohit Bansal with Wells Fargo. Please go ahead. Great.

Mohit Bansal (Equity Research Analyst)

Thank you very much for taking my question. And I would also emphasize or ask a question around the BD here. We'd love to understand your thought process here, given that, I mean, you said that if we find something like Pove, we would go for it. I think the only challenge is that Vertex is not a small company anymore. So maybe, is there a chance that you would look at bigger deals in that $5 to 10 billion range as well, or given your cash position, or you think you would probably be nimble and small when it comes to BD at this point? Thank you.

Reshma Kewalramani (CEO and President)

Deci, this is Reshma. Sorry. It's Mohit. I'm sorry. Mohit, I'm sorry.

Mohit Bansal (Equity Research Analyst)

No worries.

Reshma Kewalramani (CEO and President)

Mohit, I think Charlie summarized it really well. Our BD strategy is very much in lockstep with our internal innovation strategy.

It's all about the sandbox diseases and our approach to R&D, high unmet need, the biomarkers that translate from bench to bedside, as well as targets that are validated, be it genetic or pharmacology-efficient clinical development and regulatory pathways and specialty markets. Those are the guiding principles that have led us to where we are, and you can bet that we're going to keep going with the same. It's not about the size. It's all about fit with R&D strategy.

Mohit Bansal (Equity Research Analyst)

Got it. Thank you.

Operator (participant)

The next question will come from Myles Minter with William Blair. Please go ahead. Hi. This is Jake on for Miles. Thanks for taking our question. I have a couple for you.

First, wanted to ask you about any updates to your DM1 program, when or how much data we can expect, and then sort of how you're evaluating that program given the recent acquisition of Avidity, and then on CASGEVY, can you remind us, as patients are going through the process and then enrolling into this long-term follow-up study, your policy for disclosing adverse events, whether those be both from the preconditioning regimen or from the editing regimen or both? Thanks.

Reshma Kewalramani (CEO and President)

Yeah. Let's maybe do CASGEVY first. For all of the clinical trial patient data, whether it's in the primary, let's call it the primary sickle cell disease and Beta-thal studies, CLIMB-121 and CLIMB-131, or if it's in the long-term follow-up studies, they get reported through the clinical trial system.

For commercially treated patients, they get reported as physicians may report through to either the company or to the FDA in a normal manner. DM1 is an exciting program for us. You might recall that the way we set up this study in order to be most efficient and fastest to pivotal development, if the data are supportive, is we did a SAD/MAD directly in patients. We've completed the SAD portion of DM1, and we're in the MAD portion now. I expect that we'll be able to complete the study and have results next year. And what that means is, because we're in patients, it will be safety and efficacy.

Thank you.

Operator (participant)

The last question of the day will come from William Pickering with Bernstein. Please go ahead.

William Pickering (Senior Analyst)

Hi. Thank you very much for taking my question. I have two about Pove and PMN, if I may. The first is if you could discuss the competitive landscape in that indication and perhaps compare it to IgAN, and then the second is how you define the PMN addressable market. I think that Biogen has estimated only 36,000 patients in the US, which seems a bit more conservative than your combined U.S. and EU number would imply. Thank you.

Reshma Kewalramani (CEO and President)

Yeah, so with regard to membranous, there are some similarities between IgA nephropathy and membranous. The most compelling is that they are both B-cell mediated diseases where there's autoantibody formation and that the autoantibodies end up depositing in the kidney, which leads to the kidney dysfunction. The way that membranous and IgAN are different is clearly in prevalence. There's about 700,000 people with IgAN, for example, in China. It's a really significant disease in Asia.

I think the estimate says something like 300,000 in the Western world, while membranous is more like 150,000 in the Western world. The competitive landscape is also different. Much more competitive intensity in IgA nephropathy, likely because it's a larger patient population. To the best of my knowledge, we're the only APRIL/BAFF, for example, in pivotal development for membranous. And I do think exactly for the reason that these are both B-cell mediated diseases, I think a drug like Pove has best-in-class potential in membranous. And in the APRIL/BAFF class, we're in the lead because we're already initiated in the phase II/III. I hope that helps.

William Pickering (Senior Analyst)

Thank you.

Operator (participant)

This concludes our Q&A session. I would like to turn the conference back over to management for any closing remarks.

Susie Lisa (Senior VP of Investor Relations)

Thanks, everyone, for joining. Apologies again for the technical issues. We'll have to have the replay up as soon as possible and with that, Chuck, if you could give that information. Thank you.

Operator (participant)

Yes, ma'am. The conference is now concluded. Thank you for attending today's presentation. A replay of today's event will be available shortly after the call concludes by dialing 1-877-344-7529 or 1-412.