Q1 2021 Vertex Pharmaceuticals Inc Earnings Call

Good evening and welcome to the vertex first quarter 2020 One financial results Conference call. This is Michael Partridge, Senior Vice President of Investor Relations for vertex.

Geoffrey Christopher Meacham: Welcome to the Vertex First Quarter 2021 financial results conference call. This is Michael Partridge, Senior Vice President of Investor Relations for Vertex. Making prepared remarks on the call tonight, we have Dr. Reshma Kewalramani, Vertex's CEO and President, Stuart Arbuckle, Chief Commercial and Operations Officer, and Charlie Wagner, Chief Financial Officer. We recommend that you access the webcast slides on our website as you listen to this call. This conference call is being recorded, and a replay will be available on our website.

Making prepared remarks on the call Tonight, we have Doctor Rushmore K wall, Romani vertex as CEO and President Stuart Arbuckle, Chief commercial and operations Officer, and Charlie Wagner Chief Financial Officer.

We recommend that you access the webcast slides on our website as you listen to this call. This conference call is being recorded and a replay will be available on our website.

Geoffrey Christopher Meacham: 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 CF medicines, our pipeline, expectations regarding the closing of the CRISPR transaction, which is subject to antitrust clearance, and Vertex's future financial performance, are based on management's current assumptions. However, actual outcomes and events could differ materially. I would also note that we will review select non-GAAP financial results and guidance this evening. I will now turn the call over to Dr. Reshma Kewalramani.

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 is marketed CF medicines and our pipeline expectations regarding the closing of the CRISPR transaction, which is subject to antitrust.

Parents and protects us future financial performance are based on management's current assumptions actual outcomes and events could differ materially I would also note that we will review select non-GAAP financial results and guidance. This evening.

I will now turn the call over to Dr. Rich Mckay, where all the money.

Thank you Michael.

Reshma Kewalramani: Our goal is to continue to transform cystic fibrosis and other serious diseases and, in so doing, reach more patients and drive future growth. One quarter into 2021, I'm very pleased with the progress we're making across the board in support of this goal.

Our goal is to continue to transform cystic fibrosis and other serious diseases and in so doing which more patients and drive future growth one quarter into 2020, one and I'm very pleased with the progress we're making across the board and supported the skull.

Reshma Kewalramani: We are treating more patients with our CFTR modulators than ever before, and our clinical pipeline, spanning seven disease areas and three modalities, has advanced significantly. In addition, we continue to execute on our strategy to use external innovation to complement our internal innovation efforts, including two new deals announced already this year. I'll start with CF. Vertex has built an exceptionally strong and durable franchise and earned a leadership position in cystic fibrosis. RCF medicines have transformed the treatment of this disease, and we continue to significantly increase the number of patients we're treating. Our first quarter revenues totaled more than $1.7 billion, which represents a 14% year-over-year growth and reflects the high level of treatment penetration of Trikafta in the U.S. and strong cafetria launch in international markets.

We are treating more patients with our C F T our modulators than ever before and our clinical pipeline spanning seven disease areas and Sui modalities has advanced significantly.

In addition, we continue to execute on our strategy to use external innovation to complement our internal innovation efforts, including two new deals announced already this year.

I'll start with C L.

Vertex has built and exceptionally strong and durable franchise and earned a leadership position in cystic fibrosis.

Our CF medicines have transformed the treatment of this disease and we continue to significantly increase the number of patients we're treating.

Our first quarter revenues totaled more than $1 7 billion, which represents a 14% year over year growth and reflects the high level of treatment penetration of <unk> and the U S and strong cash trigger launch and international markets.

Reshma Kewalramani: We are poised for continued significant growth in the coming years as we achieve additional approvals and reimbursement agreements for our medicines globally and as we bring our medicines to younger patients. The clinical benefit that the triple combination delivers is remarkable, and with this medicine, we believe we can treat 90% of all people with CF. But we are not stopping there.

We're poised for continued significant growth in the coming years as we achieve additional approvals and reimbursement agreements for our medicines globally and as we bring our medicines to younger patients.

The clinical benefit that the triple combination delivers is remarkable and with this medicine. We believe we can treat 90% of all people with CF, but we are not stopping there we're investing to bring new and potentially better regimens such as the VX one to 1561 cheswick after combination to patients. This.

Reshma Kewalramani: We're investing to bring new and potentially better regimens, such as the VX121, 561 Tezukaftor combination, to patients. This new combination is a once-a-day regimen with the potential for enhanced patient benefit as well as enhanced economics with a reduced royalty obligation. Finally, we remain committed to and are making progress in developing genetic therapies for the remaining 10% of CF patients. In summary, consistent with our strategy to bring transformative medicines to all patients with CF, the combination of label expansion, additional approvals, and reimbursement agreements, and the next generation of products will continue to provide significant top and bottom line growth in the coming years.

New combination is a once a day regimen with potential for enhanced patient benefit as well and enhanced economics with the reduced royalty obligation.

Finally, we remain committed to and are making progress in developing genetic therapies, the remaining 10% of CF patients.

In summary, consistent with our strategy to bring transformative medicines to all patients with CF. The combination of label expansion and additional approvals and reimbursement agreements and the next generation of products will continue to provide significant top and bottom line growth in the coming years.

Reshma Kewalramani: Let me turn to our clinical pipeline, which includes programs in 7 disease areas and spans small molecules, cell, and genetic therapies. We have made substantial progress across the breadth of the pipeline and are poised for multiple data readouts in the next 6-12 months. First, CTX-001.

Let me turn to our clinical pipeline, which includes programs and seven disease areas and spans small molecules cell and genetic therapies. We've made substantial progress across the breadth of the pipeline and are poised for multiple data readouts and the next six to 12 months.

First she takes years year one.

Reshma Kewalramani: CTx001 is our most advanced program beyond CF. In the last year, we've generated remarkable clinical data that demonstrate the potential of this therapy to be a one-time functional cure for patients suffering from sickle cell disease and beta thalassemia. CTX-001 has been granted RMAT, Fast-Track, and Rare Pediatric Disease designations from the FDA for both sickle cell disease and beta thalassemia, as well as prime designation from the EMA for both diseases. With the compelling clinical profile and rapid progress of CTX001 towards registration and commercialization, now is the ideal time for Vertex to take the lead on this program and bring the full breadth of our development, regulatory, manufacturing, and commercialization expertise so that we can reach all eligible patients who may benefit from CTX001 as quickly as possible.

C T X years, you're one is our most advanced program beyond CF and the last year, we've generated remarkable clinical data that demonstrates the potential of this therapy to be a one time functional cure for patients suffering from sickle cell disease and beta thalassemia.

C. T X years of your one has been granted armet fast track and where pediatric disease designation from the FDA for both sickle cell disease, and being a south femia as well as prime designation from the EMA for both diseases with.

With the compelling clinical profile and rapid progress a C. T X years here one towards registration and commercialization now is the ideal time for vertex to take the lead for this program and bring the full breadth of our development regulatory and manufacturing and commercialization expertise. So that we can reach all eligible patients.

And who may benefit from C. T X years here, one as quickly as possible.

Reshma Kewalramani: As Stuart will discuss in a moment, there are nearly 170,000 patients with sickle cell disease and beta thalassemia in the U.S. and Europe, of whom 32,000 patients have severe disease and we believe will be eligible for CTX-001 therapy with the current conditioning regimen. This number could increase significantly once gentler conditioning regimens are available.

And Stuart will discuss in a moment there are nearly 170000 patients with sickle cell disease, and beta thalassemia and the U S and Europe.

32000 patients have severe disease, and we believe we will be eligible for CTX years of your one therapy with the current conditioning regimen and.

This number could extend significantly once gentler conditioning regimens are available.

Reshma Kewalramani: To date, more than 30 patients have been dosed with CTX-01, and we anticipate sharing updated data from the ongoing sickle cell and transfusion-dependent thalcemia studies with more patients and a longer duration of follow-up at upcoming medical meetings this year. We also expect to complete enrollment in both of these studies this year. Lastly, while we have initiated, we have not yet completed our discussions with regulators regarding filing expectations.

To date more than 30 patients have been dosed with CTX, Here's your one and we anticipate sharing updated data from the ongoing sickle cell and transfusion dependent thalassemia studies with more patients and longer duration of follow up at upcoming medical meetings. This year. We also expect to complete enrollment in <unk>.

Both of these studies this year.

Lastly, while we've initiated we have not yet completed our discussions with regulators regarding filing expectations based on conversations to date, we believe regulatory submissions for approval of C. T exterior one may be possible in the next 18 to 24 months will provide further details as we conclude our discussions.

Reshma Kewalramani: Based on conversations to date, we believe regulatory submissions for approval of CTX-001 may be possible in the next 18 to 24 months. We'll provide further details as we conclude our discussions. Moving on to the AATD program, our approach targets the underlying cause of this disease by using a small molecule corrector to appropriately fold the misfolded ZAAT protein. We believe this is the optimal approach for treating AATD, and it is the only approach that addresses both the lung and liver manifestations of the disease. VX864 is our most advanced molecule in the program.

Moving on to the a a T D program our approach targets the underlying cause of this disease by using a small molecule corrector to appropriately fold the misfolded Z a H M protein.

We believe this is the optimal approach for treating a a T D and it is the only approach that addresses both the lung and liver manifestations of the disease.

VX eight six for us our most advanced molecule and the program we've completed enrollment and recently, we also completed dosing in the phase two proof of concept study of VX eight six for pace.

Reshma Kewalramani: We have completed enrollment, and recently, we also completed dosing in the Phase II proof-of-concept study of VX864. Patients are now in the process of completing the 28-day safety follow-up period. We are on track for a data readout later this quarter. Now, turning to ApoL1-Mediated Kidney Disease. ApoL1-mediated kidney disease is a particularly aggressive form of renal disease characterized by pertinuria, declining renal function, and progression to ESRD.

Patients are now and the process of completing the 28 day safety follow up period.

We are on track for data readout later this quarter.

Turning to April and one mediated kidney disease April one mediated kidney disease is a particularly aggressive form of renal disease characterized by proteinuria declining renal function and progression to ESR D.

Reshma Kewalramani: Our lead molecule in this program, VX147, is being studied in a Phase II proof-of-concept study in APOL1-mediated FSGS, evaluating safety, pharmacokinetics, and reduction of proteinuria in patients over the course of 13 weeks. We expect to have results from this study in the second half of 2021. Next, turning to our pain program, earlier this week, we announced that we plan to advance VX548, the next lead molecule in our pain program, into Phase II development.

Our lead molecule and this program VX 147 is being studied in a phase two proof of concept study in April well, one mediated F. S. G S evaluating safety and pharmacokinetics and reduction of proteinuria and patients over the course of 13 weeks, we expect to have the results from this study.

And the second half of 2021.

Next turning to our pain program earlier this week, we announced that we plan to advance and we ex FIFO rate. The next lead molecule in our pain program into phase two development with VX 150, and we were the first to validate the NAV 1.8 target with three positive phase two proof of concept trials in <unk>.

Reshma Kewalramani: With VX150, we were the first to validate the NAV1.8 target with three positive Phase II proof-of-concept trials in three different pain indications. The recent decision to move VX5 foray into Phase II was based on supportive Phase I data in Healthy Volunteers, including safety, tolerability, and pharmacokinetics. In these studies, the molecule exhibited a favorable profile at doses considerably lower than those required with our previous NAP1.8 inhibitors. The Phase 2 studies will evaluate the safety and efficacy of VX548 in the treatment of acute pain following bunionectomy and also in abdominoplasty. These are well-characterized settings for the evaluation of two broad categories of acute pain, visceral and non-visceral.

And we different pain indications and the.

And the recent decision to move Bx FIFO rate to phase two was based on supportive phase one data in healthy volunteers, including safety and Tolerability and pharmacokinetics and these studies the molecule exhibited a favorable profile at doses considerably lower than those required with our previous NAV one.

0.8 inhibitors. The phase two studies will evaluate the safety and efficacy of the X 548, and the treatment of acute pain. Following bunionectomy and also in Abdominoplasty and these are well characterized settings for devaluation of two broad carat categories of acute pain, visceral and non visceral and we expect.

Studies to start and the second half of this year.

And finally in our type one diabetes program, we received FDA fast track designation for the cells alone study and initiated the phase one two study in patients with difficult to treat type one diabetes in Q1 screening is now open and we look forward to providing updates on our progress this year.

Reshma Kewalramani: And we expect the studies to start in the second half of this year. Finally, in our Type 1 Diabetes program, we received FDA Fast-Track designation for the Cells Alone study and initiated the Phase 1-2 study in patients with difficult-to-treat Type 1 diabetes in Q1. Screening is now open, and we look forward to providing updates on our progress this year. With those comments, I'll hand it off to Stuart.

With those comments I'll hand, it off to Stuart.

Thank you, Russia today I am pleased to review with you our Q1 commercial performance and our excitement about the prospects for CTX series zero one.

One year into the pandemic, our CF revenues continue to grow.

Our Q1 global revenues were $1 $7 billion driven by continued strong execution in both the U S and the EU.

Our performance and the U S continues to be impressive to.

Stuart A. Arbuckle: Thank you, Reshma. Today I am pleased to review with you our Q1 commercial performance and our excitement about the prospects for CTX001. One year into the pandemic, our CF revenues continue to grow. Our Q1 global revenues were $1.7 billion, driven by continued strong execution in both the US and the EU. Our performance in the US continues to be impressive.

To date, nearly all eligible CF patients in the U S have initiated treatment with Tri CAFTA based on the original approval and patients 12 years and older with at least one F. Five await del mutation.

And persistence and compliance remain high among these patients.

In December 'twenty, and 'twenty Tricast US approval was expanded and the U S to include patients 12 years and older with Ram mutations.

Stuart A. Arbuckle: To date, nearly all eligible CF patients in the U.S. have initiated treatment with Trikaft, based on the original approval for patients 12 years and older with at least one F508 del mutation, and Persistence and Compliance remain high among these patients. In December 2020, TRIKAFTA's approval was expanded in the U.S. to include patients 12 years and older with rare mutations. Many of these patients have now initiated treatment as well, and we are pleased by the progress we have seen in this newly eligible group.

Many of these patients have now initiated treatment as well and we are pleased by the uptake we've seen and Mitch newly eligible group.

Outside of the U S in markets, where patients have access the adoption of Caf trio is just as impressive as in the us.

We have seen rapid uptake, particularly in the U K, and Germany, and persistence and compliance us Similarly, strong, reflecting the very favorable risk benefit profile of Caf trio.

And our ex U S revenues in Q1 with $470 million, 43% higher than the same period last year, primarily due to the successful launch of cafeteria.

Stuart A. Arbuckle: Outside of the US, in markets where patients have access, the adoption of Cafetrio is just as impressive as in the US. We have seen rapid uptake, particularly in the UK and Germany, and persistence and compliance are similarly strong, reflecting the very favorable risk-benefit profile of Cafetrio. Our ex-UF revenues in Q1 were $470 million, 43% higher than the same period last year, primarily due to the successful launch of Caftria.

Earlier this year, we shared our updated estimate that there are approximately 83000 people living with CF in the U S Europe, Canada and Australia.

Today, we are treating about half of all patients, leaving an additional 30000 patients who could benefit from our medicines, but who are not yet treated.

Going forward, we are very confident that we will be able to reach these patients.

Approximately two thirds of the untreated patients at 12 and older and we expect we will be able to treat these patients through the ongoing launch uptake and reimbursement of Caf trio outside the U S.

Stuart A. Arbuckle: Earlier this year, we shared our updated estimate that there are approximately 83,000 people living with CF in the US, Europe, Canada, and Australia. Today, we are treating about half of all patients, leaving an additional 30,000 patients who could benefit from our medicines but who are not yet treated. Going forward, we are very confident that we will be able to reach these patients. Approximately two-thirds of the untreated patients are 12 and older, and we expect we will be able to treat these patients through the ongoing launch, uptake, and reimbursement of Cafetrio outside the US.

And countries, where we have regulatory approval and reimbursement our teams are working hard to reach all eligible patients who could benefit from Caf trio.

In countries, such as France, Spain, and Australia, where we have regulatory approval, but have not yet secured reimbursement. Our teams continue to make progress to ensure access and we are confident that we will be able to secure reimbursement in the remaining large markets.

For example truck after was recently approved in Australia, and we are committed to continuing to work collaboratively with the pharmaceutical benefits Advisory Committee there to ensure all 2002 hundred patients who can benefit from treatment have government funded access to try CAFTA as quickly as possible.

Stuart A. Arbuckle: In countries where we have regulatory approval and reimbursement, our teams are working hard to reach all eligible patients who could benefit from CAF TRIO. In countries such as France, Spain, and Australia, where we have regulatory approval but have not yet secured reimbursement, our teams continue to make progress to ensure access, and we are confident that we will be able to secure reimbursement in the remaining large markets. For example, Trikafta was recently approved in Australia, and we are committed to continuing to work collaboratively with the Pharmaceutical Benefits Advisory Committee there to ensure all 2,200 patients who can benefit from treatment have government-funded access to Trikafta as quickly as possible. Lastly, in Canada, we are still awaiting regulatory approval, and we expect approval there in the second half of this year. The majority of the remaining approximately 10,000 patients are younger than 12.

Lastly, and Canada, we are still awaiting regulatory approval and we expect approval there and the second half of this year.

The majority of the remaining approximately 10000 patients are younger than 12.

I'll work to secure approvals for these younger patient populations is ongoing and we are making good progress here.

We anticipate approval of Tri CAFTA and six to 11 year olds and the U S and mid 2021 and.

And have filed a regulatory submission for this population in Europe as well.

In summary, our continued progress in achieving label expansion, new approvals and reimbursements and development of new products will drive continued growth in the years to come.

And all of this we are grateful for the tireless work and continued support of the global CF community.

Let's now turn to CTX zero-zero warm, which is our next medicine that is rapidly advancing towards regulatory submissions and commercialization given the tremendous progress of CTX zero-zero, one that we and our partners at CRISPR have made.

Stuart A. Arbuckle: Our work to secure approvals for these younger patient populations is ongoing, and we are making good progress here. We anticipate approval of TriCafta in 6 to 11-year-olds in the US in mid-2020, and have filed the regulatory submission for this population in Europe as well. In summary, our continued progress in achieving label expansion, new approvals, and reimbursements, and the development of new products will drive continued growth in the years to come. In all of this, we are grateful for the tireless work and continued support of the global CF community.

As well as vertex is established expertise and development manufacturing regulatory and commercialization and serious diseases.

Both companies believe that having vertex lead all aspects of the CTX 001 program going forward would provide for the most efficient and expeditious path to bring this medicine to patients by doing this we aim to ensure a coordinated global launch which will maximize the potential of this program for both patients and our share.

Stuart A. Arbuckle: Let's now turn to CTX001, which is our next medicine that is rapidly advancing toward regulatory submissions and commercialization. Given the tremendous progress of CTX001 that we and our partners at CRISPR have made, as well as Vertex's established expertise in development, manufacturing, regulatory, and commercialization of serious diseases, both companies believe that having Vertex lead all aspects of the CTX001 program going forward would provide for the most efficient and expeditious path to bring this medicine to patients.

The holders.

C. T X 001 is a groundbreaking therapy that has demonstrated great momentum with the potential to be the first approved genetic therapy for patients with sickle cell disease.

Sickle cell disease, and beta thalassemia represent a multibillion dollar commercial opportunity.

Today, there are approximately 32000 patients in the U S and Europe, who would likely be eligible for gene editing therapy based on the severity of their disease and the current yourself and based conditioning regimen.

Vertex crisper and a number of other companies are actively pursuing gentler conditioning regimens.

Stuart A. Arbuckle: By doing this, we aim to ensure a coordinated global launch which will maximize the potential of this program for both patients and our shareholders. CTX001 is a groundbreaking therapy that has demonstrated great momentum and the potential to be the first approved genetic therapy for patients with sickle cell disease. Sickle Cell Disease and Beta Thalassemia represent a multi-billion dollar commercial opportunity. Today, there are approximately 32,000 patients in the US and Europe who would likely be eligible for gene editing therapy based on the severity of their disease and the current buzulfan-based conditioning regimen. Vertex, CRISPR, and a number of other companies are actively pursuing gentler conditioning regimens.

Such regimens would potentially expand the eligible patient population to approximately 170000 total patients in the U S and Europe.

The commercial opportunity and sickle cell disease, and beta thalassemia fits well within vertex a strategic focus on specialty markets.

Patients are primarily CAD full by Hematologists and the treatment will be focused at transplant centers in the U S and Europe, which can be covered by a specialist infrastructure.

By taking the leadership role on CTX Zero-zero, one we will be able to leverage our proven expertise and product launches and reimbursement and access to bring the curative potential of this treatment to more patients more quickly around the world.

Given we believe that regulatory submissions could happen and the next 18 to 24 months a pre commercial work is underway.

Stuart A. Arbuckle: Such regimens would potentially expand the eligible patient population to approximately 170,000 total patients in the U.S. and Europe. The commercial opportunity in sickle cell disease and beta thalassemia fits well within Vertex's strategic focus on specialty markets. Patients are primarily cared for by hematologists, and the treatment will be focused at transplant centers in the US and Europe, which can be covered by a specialist infrastructure.

CTX Zero-zero Wong is breaking new ground in many respects and I am very much looking forward to providing more details on this exciting work on future calls.

And now I'll hand, it over to Charlie.

Thanks Stuart.

And the first quarter of 2021 vertex continued its record of exceptional financial performance.

First quarter total product revenues were 1.7 billion, a 14% increase compared to the first quarter of 2020 and.

And these results included 1.25 billion of revenue in the U S and $470 million from outside the U S.

Stuart A. Arbuckle: By taking the leadership role on CTX001, we will be able to leverage our proven expertise in product launches, reimbursement, and access to bring the curative potential of this treatment to more patients more quickly around the world. Given we believe that regulatory submissions could happen in the next 18-24 months, our pre-commercial work is underway. CTX-001 is breaking new ground in many respects, and I'm very much looking forward to providing more details on this exciting work on future calls.

The ex U S results represent growth of 43% over the prior year driven largely by the rapid uptake of cap trio and countries, where we have secured reimbursement, particularly England and Germany.

Our first quarter non-GAAP combined R&D and SG&A expenses were $530 million compared to 477 million for the first quarter of 2020.

<unk> expenses in Q1 were primarily driven by investment and innovation and we expect our R&D investments will continue to be substantial as we drive toward proof of concept data and further clinical and regulatory progress across our broad pipeline.

Stuart A. Arbuckle: And now I'll hand it over to Charlie. Thanks, Stuart. In the first quarter of 2021, Vertex continued its record of exceptional financial performance. First quarter total product revenues were $1.7 billion, a 14% increase compared to the first quarter of 2020.

Our continued growth and revenues combined with carefully managed growth and spending translates to a first quarter non-GAAP operating margin of 58%.

With our strong revenue and profitability. We ended the first quarter with $6 9 billion and cash.

Consistent with our corporate and R&D strategy, we're investing more and innovation than ever before including external innovation.

Charles F. Wagner: And these results included $1.25 billion of revenue in the U.S.

This was most recently exemplified by both our amended collaboration agreement with CRISPR and our new discovery collaboration with Obsidian Therapeutics.

Charles F. Wagner: and $470 million from outside the U.S.

Charles F. Wagner: The XUS results represent growth of 43 percent.

Charles F. Wagner: Over the prior year, driven largely by the rapid uptake of Captrio in countries where we have secured reimbursement, particularly in England and Canada.

Now onto guidance.

We are maintaining our previously issued 2021 guidance for total product revenues in the range of 6.7 to 6.9 billion.

Our Q1 revenues were very strong, but they also include and approximately $50 million benefit from channel inventory fluctuations that are not directly reflective of underlying patient demand.

Charles F. Wagner: Particularly England and Germany.

Charles F. Wagner: Our first quarter non-GAAP combined R&D and SG&A expenses were $530 million, compared to $477 million for the first quarter of 2020. Expenses in Q1 were primarily driven by investment in innovation, and we expect our R&D investments will continue to be substantial.

As a reminder, our.

2021 guidance reflects our expectations for currently approved products and regions, where we are reimbursed plus and expectation of tried CAFTA approval for the six to 11 year old population and the U S and mid 2021.

It does not include any additional reimbursements that we might obtain this year.

Charles F. Wagner: Thank you.

Charles F. Wagner: Our continued growth in revenues, combined with carefully managed growth

For non-GAAP Opex, we are reiterating our guidance range of 2.25 to 2.3 billion.

Charles F. Wagner: Fully managed growth in spending translates to a first quarter non-gap operating margin of 58%.

We expect to continue allocating greater than 70 per cent of Opex to R&D as we further advance our pipeline programs. We are poised to generate important clinical data from a number of programs over the course of the year and these datasets will drive decisions on further investment.

Charles F. Wagner: With our strong revenue and profitability, we ended the first quarter with $6.9 billion in cash. Additionally, consistent with our core values

Charles F. Wagner: Consistent with our corporate and R&D strategy, we're investing more in innovation than ever before, including external innovation. This was most recently exemplified by both our amended collaboration agreement with CRISPR and our new discovery collaboration with Obsidian Therapeutics. Now on to guidance. We are maintaining our previously issued 2021 guidance for total product.

For our non-GAAP tax rate, we're guiding to a range of 21% to 22% this year.

In summary, I'm very pleased with our performance and the first quarter of 2021 and look forward to updating you on our continued progress over the course of this year.

Now back to <unk> for closing remarks. Thanks.

Thanks, Charlie in some we've made significant progress across the business, we have confidence in and continue to execute on our innovation based growth strategy.

Charles F. Wagner: In the range of $6.7 to $6.9 billion. Q1 revenues were

Our strategy is working and our investments both internal and external are driving discovery and development of game changing new medicines.

Charles F. Wagner: They are very strong, but they also include an approximately $50 million benefit from channel inventory fluctuations that are not directly reflective of underlying patient demand. As a reminder, our 2021 guidance reflects our expectations for currently approved products in regions where we are reimbursed plus an expectation of TRIKAFTA approval for

Vertex is delivering exceptional financial performance, our CF business is poised to continue to grow and our broad pipeline continues to advance.

And we'll now open the call to questions.

And thank you.

And as a reminder, you ask a question you will need to press star one on your telephone to withdraw your question press. The pound key please standby will be compile the Q&A roster.

Charles F. Wagner: CAPTA Approval for the 6-11 year old population in the U.S. in mid-2021. It does not include any additional reimbursements that we might obtain this year.

And our first question comes from Michael Yee from Jefferies. Your line is now open.

Charles F. Wagner: For non-GAAP Op-Ex, we are reiterating our guidance range...

Michael Your line is now open.

Charles F. Wagner: Partnership 2.25 to 2.3 billion We expect to continue allocating greater than 70% of OPEX to R&D.

If your phones on mute could you please immediate.

Operator.

Thank you and our next question comes from Phil <unk>.

Charles F. Wagner: R&D as we further advance our pipeline program. We are poised to generate important clinical data from a number of programs over the course of the year, and these data sets will drive decisions on further investment. For our non-GAAP tax rate, we are guiding to a range of 21 to 22 percent this year.

And that would do from Cowen and company. Your line is now open.

Good afternoon, and thanks for taking my question I think the most common question, we've been getting from investors recently and a T program.

And it's what would serve as proof of concept and that.

And the upcoming day to day.

And can you maybe give us your most recent thoughts on what levels are necessary, what proportion of patients need to be responders and.

Charles F. Wagner: In summary, I'm very pleased with our performance in the first quarter of 2021 and look forward to updating you on our continued progress over the course of this year. Now, back to Reshma for closing remarks. Thanks, Charlie.

And whatnot and then.

Second for PD and that question and the past you'd been guiding to moving another 80 molecule into the clinic. This year didn't seem right from your prepared remarks that still the case can you confirm whether there has actually been a change there and and maybe give us a reason why if it if the current interest rates.

Reshma Kewalramani: Thanks, Charlie. In summary, we've made significant progress across the business. We have confidence in and continue to execute on our innovation-based growth strategy. Our strategy is working, and our investments, both internal and external, are driving discovery and development of game-changing new medicines. Vertex is delivering exceptional financial performance, our CF business is poised to continue to grow, and our broad pipeline continues to advance.

Hey, Phil This is Ray Smith, let me, let me take that for you and I.

The question is really are where are we with the 86 four program what are we expecting what would be success and a little bit about.

The portfolio approach and and other molecules. So let me take that in pieces.

And.

You know this but to review for others and the call we are on track.

Small molecule corrector.

And we own the Misfolded Z.

Protein that's our approach to this disease and the reason it's important to understand that is that fundamentally. This is the only approach that holds the potential to treat both liver and lung hence our enthusiasm for this approach.

Operator: Thanks, and we'll now open the call to questions. And thank you. And as a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And our first question comes from Michael Yee from Jeffreys. Your line is now open. Michael, your line is now open. If your phone's on mute, could you please unmute it? Thank you. And our next question comes from Phil.

VX 864 is in the clinic you heard me in the prepared remarks talk about the fact that we've hit some really important milestone we are done with enrollment or patients have completed the dosing period and.

And they are now in the 28 day safety follow up period.

Operator: Nat Gu, from Cowan and Company. Your line is now open.

Here's what I'm looking for from the study and what I would consider success really three things. The first safety. This is the first time, we've had VX eight and six four in patients with AA T. D. So that's obviously front and center.

Phil Nadeau: Good afternoon. Thanks for taking my question. I think the most common question we've been getting from investors recently is about the AT program. And that would serve as proof of concept in the upcoming data that you're seeing? Can you maybe give us your most recent thoughts on what levels are necessary, what proportion of patients need to be responders, and whatnot? And then, as a second part to that question, in the past, you'd been guiding us to move another AT molecule into the clinic this year? It didn't seem like from your prepared remarks that that's still the case. Can you confirm whether there has actually been a change there? And maybe give us a reason why if it if the guidance has changed?

And a dose exposure dose response relationship and third elevation and functional AAP level, that's really what I'm looking for and and what I would be very excited to see.

In terms of the portfolio and molecules beyond VX 864, as with all of the programs in the pipeline.

So we have a whole portfolio of molecules and that continues to be true or a a T D as well.

That's very helpful. Thank you.

Thank you and our next question comes from Geoff Meacham from Bank of America. Your line is now open.

Hey, everyone. Thanks for the question I just have two quick ones.

Reshma Kewalramani: Thanks. Yeah. Hey, Phil, this

Reshma Kewalramani: Hey, Phil, this is Reshma. Let me take that for you. I think that the questions really are, where are we with the H64 program? What are we expecting? What would be success? And a little bit about the portfolio approach and other molecules. So let me take that in pieces.

On the updated economics with CRISPR on O. One and was a decision based on ongoing data or was there some regulatory feedback or maybe commercial analysis.

No it's always better to lead a program and you can but wasn't sure and.

And what the ultimate catalyst was for the deal.

Reshma Kewalramani: So, you know this, but to review for others on the call, we are taking small molecule correctors to refold the misfolded ZAAT protein. That's our approach to this disease. And the reason it's important to understand that is that, fundamentally, this is the only approach that holds the potential to treat both liver and lung. Hence our enthusiasm for this approach. VX864 is in the clinic. You heard me in the prepared remarks talk about the fact that we've hit some really important milestones. We are done with enrollment.

And then just a follow up on a T. You're just assuming that there is a clean safety profile duration and do you view the collector approach us kind of the only approach for vertex or is there a thought that you know you're committed to a tee and and may have other mechanisms of action.

Even even more beyond what you have.

And the pipeline today. Thanks.

Yeah sure.

Let me start with the question around the amended agreement with CRISPR.

Reshma Kewalramani: Our patients have completed the dosing period, and they are now in the 28-day safety follow-up. Here's what I'm looking for from the study and what I would consider success. Really, three things. First, safety. This is the first time we've had VX864 in patients with AATD, so that's obviously front and center. Second, a dose-exposure or dose-response relationship.

Yeah, Jeff.

Number of.

Catalysts that and.

Happened over the course of the last let's say six to eight months that led us to <unk> and <unk>.

Bending the agreement if you come back.

Last year.

Not only that but we have the data that we've shown from 10 patients and the data are really nothing short of remarkable.

Reshma Kewalramani: And third, elevations in functional AAP. That's really what I'm looking for and what I would be very excited about. In terms of the portfolio and molecules beyond VX864, as with all of the programs in the pipeline, Phil, we have a whole portfolio of molecules, and that continues to be true for AATD as well. That's very helpful. Thank you. Thank you. And our next question comes from Geoff Meacham from Bank of America. Your line is now open. Hey, everyone. Thanks for the question. I just have two quick ones.

We're also at a point now where we've dosed more than 30 people in this.

Graham.

And we are looking to complete enrollment in both beta thal and sickle cell disease.

This year.

And the program has a lot of momentum behind it and it is progressing overall and even faster than we expected.

You put that all together and this is really just the perfect time for vertex to take the leadership role and bring the full weight of our experience and infrastructure and expertise to get to as many patients as possible as quickly as possible.

Geoff Meacham: On the updated economics with CRISPR on OO1, was the decision based on ongoing data, or was there some regulatory feedback or maybe commercial analysis? I know it's always better to lead a program when you can, but I wasn't sure, you know, what the ultimate catalyst was for the deal. And then just to follow up on AAT, you know, just assuming that there is a clean safety profile, you know, Ray Sherman, do you view the corrector approach as kind of the only approach for Vertex? Or is there a thought that, you know, you're committed to AAT and may have,

With regard to your question on ACD.

And the answer to your question around how committed are we how do we think about this disease. This disease fits our strategy like a glove and we are exceptionally committed to a a TD with regard to the approach.

There is no better approach to a TD and small molecule correction of the Misfolded protein.

And a protein that is misfolded in the disease that is the underlying cause of the disease.

Geoff Meacham: Other mechanisms of action, even more beyond.

Reshma Kewalramani: Beyond what you have, you know, in the pipeline today. Thanks.

And with the small molecule approach you have the opportunity to target that underlying cause of disease and in so doing.

Reshma Kewalramani: Yeah, sure. Let me start with the question about the amended agreement with CRISPR. You know, Geoff, there are a number of catalysts that happened over the course of, you know, the last, let's say, six to eight months that led us to amending the agreement. If you go back to last year, between last year and now, we have delivered proof-of-concept results for both sickle cell and beta thalassemia. Not only that, but we have data that we've shown from 10 patients, and the data are really nothing short of remarkable.

Treat both the liver and lung manifestations. So we are absolutely committed to apd and add to the small molecule corrector.

Okay, great. Thank you.

Thank you and our next question comes from Michael Yee from Jefferies. Your line is now open.

Can you hear me now.

Yes.

Okay great.

To your other question about.

Diabetes, I know rest and likes to talk about this but actually Theres data. Later this year can you maybe just comment about what proof of concept is would it be surprising us see changes and HBA when she et cetera, maybe just talk about the value of what you see there realizing it's been naked shelf. Thank you so much.

Reshma Kewalramani: We're also at a point now where we've dosed more than 30 people in this program, and we are looking to complete enrollment in both beta-fowl and sickle cell disease this year. The program has a lot of momentum behind it, and it is progressing overall even faster than we expected.

And Mike I think youre, asking about debt type, one diabetes program and and just to understand a little bit about the background and and maybe a little bit about where we are and I certainly heard your question about when we can expect to see some data okay.

Reshma Kewalramani: Put that all together, and this is really just the perfect time for Vertex to take the leadership role and bring the full weight of our experience, infrastructure, and expertise to get to as many patients as possible, as quickly as possible. With regard to your question on AATD, the answer to your question about how committed are we, what we think about this disease, this disease fits our strategy like a glove, and we are exceptionally committed to AATD.

Type one diabetes program is cell based program that comes really in two flavors, one let's call. The naked cell approach. That's the one that had the IMD cleared earlier and the year. That's the one that in patients. The study and patients is ongoing right now the phase one two study.

And that program and.

Is.

In the phase one Tuesday, the second one is the sales plus device program now.

Reshma Kewalramani: With regard to the approach... There is no better approach to AATD than small molecule correction of the misfolded protein, right? The ZAAT protein that is misfolded in the disease, that is the underlying cause of the disease. And with the small molecule approach, you have the opportunity to target that underlying cause of the disease and, in so doing, treat both the liver and lung manifestations.

Now, let me just step back and explain two more things here.

Very little biological risk in terms of the approach that we're taking to type one diabetes, because we understand very clearly what the cause of diseases. It's autoimmune destruction of pancreatic islet cells, maybe more importantly, we have known for many years that islet cell transplants, we could go.

Reshma Kewalramani: So we are absolutely committed to AATD and to the small molecule correction. Okay, thank you. Thank you. And our next question comes from Michael Yee from Jeffries. Your line is now open.

Wait outcome in patients with type one diabetes that is already known.

They'll transplants had been done for years.

The issue has been the quality and quantity of sales and that's exactly the solution that summer and now vertex are bringing forward. So with the naked cell program. This would be about let's say 60000 patients. These are patients with severe diabetes that I think could benefit from this program, which we.

Michael J. Yee: Can you hear me now? Okay, great. I actually have a question about diabetes.

Michael J. Yee: [inaudible]

Michael J. Yee: What proof of concept is it? Would it be surprising to see changes in HBA, 1C, etc.? Maybe just talk about the value of...

Would include chronic immunosuppression.

Operator: Transcribed by https://otter.ai

We go then to the cell and device program. There are over a million people just in the U S and an equivalent number in the EU with type one diabetes.

Reshma Kewalramani: Hey Michael, I think you're asking about the Type 1 Diabetes Program and just wanting to understand a little bit about the background and maybe a little bit about where we are. And I certainly heard your question about when we can expect to see some data. Okay, so the Type 1 Diabetes Program is a cell-based program that comes in really two flavors. One, we call the Naked Cell Approach. That's the one that had the IND cleared earlier in the year.

That could benefit from the solid device program that of course would not require any immuno suppression.

And with regards to timing so the net.

Naked program has cleared its R&D its in the phase one to now you recall that we're starting at a lower dose and then just like with Gtx fears here. One we would then get to the target dose.

Reshma Kewalramani: That's the one that's inpatients, the study inpatient is ongoing right now, the Phase 1-2 study. And that program is in the Phase 1-2 stage. The second one is the Cells Plus Device Program. Now, let me just step back and explain two more things.

And I would say that just like the CTX here zero. One program you should think of it as a efficient program and a reasonable number of patients will give us a good sense for profile and I would say that you should.

Reshma Kewalramani: There is very little biological risk in terms of the approach that we're taking to type 1 diabetes, right? Because we understand very clearly what the cause of the disease is. It's the autoimmune destruction of the pancreatic islet cells... Maybe more importantly, we have known for many years that islet cell transplants lead to great outcomes in patients with type 1 diabetes.

Have a mindset to word 2020 two for a data readout from that growth.

Thank you.

And thank you and our next question comes from Cory CASM off from J P. Morgan. Your line is now open.

Hey, good afternoon, guys. Thanks for taking my question.

And the strategic front on the heels of the expanded deal with CRISPR as well was the smaller of city and collaboration just curious if we should be thinking about business development or M&A and eat differently going forward I and theirs.

Reshma Kewalramani: That is already known. Eyelid cell transplants have been done for you. The issue has been the quality and quantity.

Reshma Kewalramani: And that's exactly the solution that SEMA and now Vertex are bringing forward. So with the Naked Cell Program, this would be about, let's say, 60,000 patients. These are patients with severe diabetes that I think could benefit from this program, which would include chronic immunosuppressive conditions. If we go then to the cell and device program, there are over a million people just in the U.S. and an equivalent number in the EU with type 1 diabetes that could benefit from the cell and device program. That, of course, would not require any immunosuppression.

Some recent expectation of larger deals to come is that still the plan or are we kind of looking at the smaller earlier stage ones, where you can add more of your expertise. Thank you.

Yeah, Hey, this is Matt again, let me take that one for you.

Our business development or external innovation strategy is exactly the same as it has been over the last several years and.

And what I mean by that is we're looking for assets and Fiat that complement our internal pipeline, we're looking for tools to expand our toolkit and we're looking for assets that fit our disease areas of interest and and when I say that I mean asset that we vertex could add value research.

Reshma Kewalramani: And with regard to timing, so the NAKED program is cleared at 90, and it's in phase 1-2 now. You recall that we're starting at a lower dose, and then, just like with CTX001, we would then get to the target dose. And I would say that just like the CTX001 program, you should think of it as an efficient program, and a reasonable number of patients will give us a good sense of the profile.

Regulatory et cetera.

I've been really pleased with the deals that we've done.

And you could look at semi where Exxon ex US examples but you could also just look back and the last couple of weeks with the amended agreement with CRISPR Therapeutics and the collaboration agreement with Obsidian.

Reshma Kewalramani: And I would say that you should have a mindset towards 2022 for a data readout from that. Thank you. And thank you. And our next question comes from Corey Kazimoff from J.P. Morgan. Your line is now open. Hey, good afternoon, guys.

And that's what you should think about when you think about our external innovation approach and you should expect to see.

More of the same.

Okay helpful. Thank you.

Corey Kazimoff: Thanks for taking my question. On the strategic front, on the heels of the expanded deal with CRISPR, as well as the smaller Obsidian collaboration, just curious if we should be thinking about business development or M&A any differently going forward? There's been some recent expectation of larger deals to come. Is that still the plan? Or are we kind of looking at the smaller, earlier stage ones?

Our next question comes from Saudi and Victor from Goldman Sachs. Your line is now open.

Thanks on the 11 micro molar threshold for a T serum levels. How are you thinking about that in context of dose response, and what you're trying to ascertain what the upcoming phase two data and then just a second question. If you could just remind us where you stand on the in vivo CRISPR Cas nine work on Duchesne and D. M. One.

Operator: Transcripts provided by Transcription Outsourcing, LLC.

Reshma Kewalramani: Yeah, this is Rashma again. Let me take that one for you.

Sure. So I mean, this is very strong and I could answer those questions for you.

Reshma Kewalramani: Our business development, or external innovation, strategy is exactly the same as it has been over the last several years. And what I mean by that is, we're looking for assets in CF that complement our internal pipeline. We're looking for tools to expand our toolkit, and we're looking for assets that fit our disease areas of interest. And when I say that, I mean assets that we, Vertex, could add value to: research, development, regulatory, etc.

Let me tackle.

D M D and DM, one first and then I'll come back to a a T D.

So and.

We're making good progress on and the D M D and DM one programs that are both in late preclinical development.

And obviously, you've seen and what's been going on in the field.

With regard to a real real setbacks that others have had experience and what we're doing is being very deliberate and very careful about process development analytical development and.

Reshma Kewalramani: I've been really pleased with the deals that we've done. You could look at Sema or Exonix as examples, but you could also just look back over the last couple of weeks with the amended agreement with CRISPR Therapeutics and the collaboration agreement with Obsidian.

Dosing.

And we.

We are making progress in those regards and I'm eager to share with you when those programs will come into the clinic.

Reshma Kewalramani: That's what you should think about when you think about our external innovation approach, and you should expect to see more of the same. Okay, helpful. Thank you. And thank you. And our next question comes from Salveen Richter from Goldman Sachs. Your line is now open.

But that's for another day.

And with regard to the AAD.

Question.

And you know.

There is no magic number here.

We're looking for from this proof of concept study is the totality of the evidence.

Salveen Richter: Thanks. On the 11 micromolar threshold for AAT serum levels, how are you thinking about that in context of dose response and what you're trying to ascertain with the upcoming phase 2 data? And then, just a second question, could you just remind us where you stand on the in vivo CRISPR-Cas9 work on Duchenne and DM1.

And as I mentioned that is safety, that's a dose responsiveness dose exposure and what I mean, specifically by that is that there is an association with higher dose to greater exposure or greater response, and certainly elevations in functional AA level.

Reshma Kewalramani: Sure, Salveen. This is Reshma. I could answer those questions for you. Let me tackle DMD and DM1 first, and then I'll come back to AATD. So, we're making good progress on the DMD and DM1 programs, which are both in late preclinical development. Obviously, you've seen what's been going on in the field with regard to real setbacks that others have experienced.

And I'm eager to talk to you about the data and the next step.

And we're very close now I fully expect that the data readout will be later this quarter.

Thank you.

And thank you and our next question comes from Mohit Bansal from Citigroup. Your line is now open.

Reshma Kewalramani: And what we're doing is being very deliberate and very careful about process development, analytical development, and dosing, and we are making progress in those regards. And I'm eager to share with you when those programs will come into the clinic, but that's for another day. With regard to the AATD question, you know, there's no magic number here. What we're looking for from this proof-of-concept study is the totality of the evidence, and as I mentioned, that is safety, that is dose responsiveness, dose exposure, and what I mean specifically by that is that there is an association with higher doses to greater exposure or greater response, and certainly elevations in functional AAT levels.

Great. Thank you. Thanks for taking my question actually and all the progress.

And maybe a question again that one other question and a T.

And I'll check suggests that 80 levels.

Do fluctuate naturally and human body, depending on if you had and acute case and laws and to back and let's just say if we see some elevation and functional AG level some of the athletes explore trial.

Is there any reason to believe it could be just you too are challenged alone, especially with these patients.

Other than being in effect of the drought.

Yeah. This is ray.

I really do understand your question.

Mohit Bansal: I'm eager to talk to you about the data and the next steps, and we're very close now. I fully expect that the data readout will be later this quarter. And thank you. And our next question comes from Mohit Bansal from Citigroup. Your line is now open. Great, thank you. Thanks for taking my question and congrats on all the progress. Maybe another question, again, another question from AT. Our check suggests that AT levels do fluctuate naturally in the human body depending on whether you are in an acute phase or not.

Looking about when I say I want Us C L.

Elevations and functional a 80 level is real elevation.

And when I say, we're looking for dose responsiveness.

What we're looking for right, we're looking to see that exposure increases with dose and that responsiveness. The actual functionally T level, a very with dose those are all elements of what we're looking for but when I say functional.

A T level.

Go up that's what we're looking for I mean, real elevations and functional ATP levels.

Reshma Kewalramani: Unknown Executive, Mohit Bansal, Susie Lisa, William Pickering, David Altshuler, and Susie

Got it helpful. Thank you.

Okay.

Thank you and our next question comes from Lisa Bay Coke from Evercore ISI. Your line is now open.

Reshma Kewalramani: Yeah, Mohit, this is Reshma. I really do understand your question. And Mohit, what we're talking about when I say I want to see elevations in the functional AAT level is real elevations. And when I say we're looking for dose responsiveness, that's part of what we're looking for, right? We are looking to see that exposure increases with dose and that responsiveness, the actual functional AAT levels, vary with dose. Those are all elements of what we're looking for. But when I say functional AAT levels go up, that's what we're looking for. I mean real elevations in functional AAT levels.

Hi, Thanks for taking my question and I wanted to ask a little bit about the pain program and started to talk about it a little bit more E. X 548 can you maybe talk about how it's different from the X, one and Fi, though which actually made it quite far into the clinic and then in terms of your kind.

And a intentions clinically I know, you're you're setting some cute indications and you're gonna be eventually sit and chronic as well or is this more suited for chronic.

Those are my questions. Thanks.

Yeah, Yeah sure sure Lisa.

Let me break this up into two parts and I'm going to take the first and I'm going to ask you what the comment on the second and.

Mohit Bansal: Got it. Helpful. Thank you.

Operator: Thank you. And our next question comes from Lisa Beiko, from Evercore ISI. Your line is now open.

And to tackle them.

The things that you need to know from R&D perspective, and I'm going to ask Stuart to comment on the commercial prospects here.

Liisa Bayko: Hi, thanks for taking my question. I want to ask a little bit about the pain program. You started to talk about it a little bit more, VX548. Could you maybe talk about how it's different from VX150, which actually made it quite far in the clinic? And then in terms of your kind of intentions clinically, I know you're setting some acute indications. Are you gonna be eventually sitting chronic as well, or is this more suited to chronic? Those are my questions,

Three things Lee said and know from the R&D perspective first the target the target here is NAV, one eight and that's important to know because NAV, one eight as and genetically validated targets, but it's also a pharmacologically validated target and exactly right. It was the ex 150 and that had positive.

<unk> two proof of concept readouts across three different pain indication acute neuropathic and let's call it and musculoskeletal pain.

The second thing and to know is our approach with VX 548, So the X.

Liisa Bayko: Those are my questions. Thanks. Yeah, yeah.

And 548 and as.

It's emerged from its phase one.

Reshma Kewalramani: Yeah, yeah, sure, sure, Liisa. Let me break this up into two parts, and I'm going to take the first, and I'm going to ask Stuart to comment on the second. I'm going to tackle the things that you need to know from an R&D perspective, and I'm going to ask Stuart to comment on the commercial prospects. Three things, Liisa, to know from an R&D perspective. First, the target

Trial. It really is all of the properties that we're looking for not only in terms of safety and Tolerability, but also PK and exposure and.

At doses that are considerably lower than what we saw with our previous NAV, one eight inhibitors, including 150 and that obviously has a significant benefits and in a multitude of ways, but.

Reshma Kewalramani: The target here is NAV1.8, and that's important to know because NAV1.8 is a genetically validated target, but it's also pharmacologically validated. And exactly right, it was VX150 that had positive phase two proof of concept readouts across three different pain indications, acute, neuropathic, and let's call it musculoskeletal pain. The second thing to know is our approach with VX548. So, VX548, as it emerged from its phase one trial, really has all of the properties that we're looking for, not only in terms of safety and tolerability but also PK and exposure, and at doses that are considerably lower than what we saw with our previous NAV1.8 inhibitors, including 150.

Including and formulation and manufacture ability and the last thing I'll say on the R&D side is.

Starting with acute pain, a bunion activity will be first and then abdominoplasty and.

We're doing that because the pathway to registration is a best rural and non visceral indication acute pain as the name implies it's a very short duration of treatment and a couple of days and.

And we've done Bonnie and acted me as studies before we know how to do it.

So that's kind of how I'm viewing that.

And I'm going to turn it over to Stuart to tell you a little bit more about the market size and the opportunity there.

Yeah, Hey, Lisa so and the acute and Europe ethic segments of the pain market. They're both currently multibillion dollar segments of the market.

Both largely dominated by generic currently and Bo.

And in need of significant.

Innovation and so we're looking to bring forward and agent which is.

Reshma Kewalramani: And that obviously has significant benefits in a multitude of ways, but including in formulation and manufacturability. And the last thing I'll say on the R&D side is that, you know, we're starting with acute pain. Bunionectomy will be first, and then abdominoplasty. We're doing that because the pathway to registration is for a visceral and non-visceral indication. Acute pain, as the name implies, it's a very short duration of treatment, it's a couple of days. And we've done bunionectomy studies before. We know how to do it.

Both superior in terms of efficacy and Tolerability and as a result of that we believe it'll be used in.

A great deal of patients and both of those segments.

We are targeting that superior profile, we think we'll be able to compete and at.

And really really strong way with generic opioids and whole foods.

And Eric.

And the.

Europe ethics segments.

Both of those as well our markets, which us by a relatively concentrated group of prescribers.

And so we feel that those segments and particular play into our overall corporate strategy of focusing on specialty markets.

Okay. Thank you.

Thank you and our next question comes from Gena Wang from Barclays. Your line is now open.

Reshma Kewalramani: So that's kind of how I'm viewing it. And I'm going to turn it over to Stuart to tell you a little bit more about the market size and the opportunities. Yeah, Lisa, so in the acute and neuropathic segments of the pain market, they're both currently multi-billion dollar segments, both largely dominated by generics concurrently, and both in need of innovation. And so, you know, we're looking to bring forward an agent which is both superior in terms of efficacy and tolerability.

Thank you I'll also ask one question on a T and wished and I you mentioned that you know those responses to also one very important criteria can you share with us like how did you choose doses in the phase two study and do you also anticipate further dose escalation.

Phase two data showing still have some room or either not reach and optimal or the safety looks good when you're planning to dose further up.

Reshma Kewalramani: And as a result of that, we believe it'll be used in, in, uh, we're talking Profile. And so we feel that those segments, in particular, play into our overall corporate strategy of focusing on special. Okay, thank you. Thank you. And our next question comes from Gina Wang from Barclays. Your line is now open.

Sure.

Jean and the way we choose our doses.

For a a T D are really the same as we do for all of our program.

You know our.

Programs and CF very well and maybe that's a good example to talk through what we're really looking at is our in vitro data.

Gina Wang: Thank you. I will also ask one question on AAP. Reshma, you mentioned that, you know, those responses are also one very important criteria.

And translating what we see in our model into the clinic and into patients and.

Reshma Kewalramani: Can you share with us, like, how you chose doses in the Phase 2 study, and do you also anticipate further dose escalation if Phase 2 data shows that there is still some room, or either not reaching optimal, or the safety looks good? Were you planning to dose further up? Sure. Gina, the way we choose our doses for AATD is really the same as we do for all of our programs.

And obviously, we have a track record of doing that quite well in CF and that is exactly the same methodology that we use here in a a T D.

And just elevate a little bit Gina well, what I think your question behind your question might be is gosh, how confident are you that.

Youre going to be able to bring forward a medicine for this disease, how confident are you and this mechanism.

Reshma Kewalramani: You know our programs in CF very well, and maybe that's a good example to talk through. What we're really looking at is our in vitro data and translating what we see in our models into the clinic and into patients. Obviously, we have a track record of doing that quite well in CF, and that is exactly the same methodology that we use here in AAP. If I just raise the level a little bit, Gina, what I think your question behind your question might be is, gosh, how confident are you that you're going to be able to bring forward a medicine for this disease? How confident are you in this mechanism? And, in general, how do we view this?

And in general how do we view this and let me be very clear about that we are committed to this disease. This disease fits our strategy like a glove.

We've been working on this mechanism for many years and we feel high confidence that we have the right approach and I.

And I'm looking forward to sharing with you the data as I said, that's going to be coming out.

Very soon in this quarter.

Thank you.

Thank you and our next question comes from Robin care and.

And I'll skip from Jewish Your line is now open.

Reshma Kewalramani: And let me be very clear about that. We are committed to this disease. This disease fits our strategy like a glove. We've been working on this mechanism for many years, and we feel high confidence that we have the right approach. And I'm looking forward to sharing with you the data. As I said, that's going to be coming out very soon this quarter.

Very good well done and.

So two really quick questions, let's start with the triple net.

The Triple combo 121, I know you haven't talked a lot about it but like what's.

And what sort of control arm would you need what is the angle with advancing that program and what kind of expectations you have for that program on pain.

Reshma Kewalramani: Thank you. Thank you. And our next question comes from Robyn Karnauskas from CHUISP. Your line is now open.

I think my direct question, what Ive always said if you get a good phase two you'd want to like partner first to go into phase three.

Robyn Karnauskas: Very good. Well done. So, two really quick questions. Let's start with the triple, the triple combo 121. I know you haven't talked a lot about it, but like... What sort of control arm would you need?

So is that still the case do you think a partner would want to partner and that would be a big deal for you to go in Q and chronic pain and that would be a catalyst for you as well is that still the plan for pain, and then going back to 121 educate us on what your plan is for that thank you.

Robyn Karnauskas: What is the angle with, you know, advancing that program? What kind of expectations would you have for that program in terms of pain? I think my direct question would be, you've always said, if you get into phase two, you'd want to, like, partner first to go into phase three. So is that still the case?

Sure, Hey, Robyn iteration, but let me do pain.

<unk>.

We are focused on acute pain and neuropathic pain and.

And those are both pain conditions as you heard Stuart say that we believe to be vertex Ian and to be managed in the specialty markets manner in which we feel very comfortable so that's what we are focused on acute pain first and then neuropathic.

Robyn Karnauskas: Do you think a partner would want to partner in, that'd be a big deal for you to go into chronic pain, and that would be a catalyst for you as well? Is that still the plan for pain? And then, going back to 121, educate us on what your plan is for that.

<unk> is what we're looking at.

Reshma Kewalramani: Thank you. Sure. Hey, Robyn, it's Reshma.

What you've heard us say in the past is when we get to considerations and musculoskeletal pain and for example that is not something that we would commercialize but what we're talking about here is acute pain and neuropathy.

Reshma Kewalramani: Let me do pain first. We are focused on acute pain and neuropathic pain. And those are both pain conditions, as you heard the stewards say, that we believe to be Vertexian and to be managed in the specialty market manner in which we feel very comfortable. So that's what we are focused on. Acute pain first, and then neuropathic pain is what we're looking at.

I'm going to see us.

And then next.

Wave of combination of potentiate or us and corrector is indeed are the combination of VX 121, VX 561, and Tessa CAFTA and.

And really what we're looking at here is a combination that has the potential to have superior efficacy for patients.

Reshma Kewalramani: What you've heard us say in the past is when we get to considerations of musculoskeletal pain, for example, that is not something that we would commercialize. But what we're talking about here is acute pain and neuropathy. Going to CF, the next wave of combination of potentiators and correctors is indeed the combination of VX121, VX561, and tezacaptor.

Once a day dosing and also improved economics, and what I mean by that is.

Going from royalties that are in the low double digits to low single digits. We are wrapping up our conversations with regulators on that program and we are readying that program to go to phase III, which I expect will happen later this year.

Restaurant, how do you get there that'd be great and placing average pay for your vertex shareholders. How do you get.

Reshma Kewalramani: And really, what we're looking at here is a combination that has the potential to have superior efficacy for patients, once a day dosing, and also improved economics. And what I mean by that is going from royalties that are in the low double digits to low single digits. We are wrapping up our conversations with regulators on that program, and we are readying that program to go to phase three, which I expect will happen later this year. Reshma, how do you get there?

<unk> people to that drug you have a sense of how you would go that direction.

Yeah Yeah.

You know Robin when we bring Molly.

Molecules forward into late stage development like.

The one to one tezak after 561 combination.

We are doing so because we have full expectation that we are going to be able to do something that is better for patients. We are all about first in class and best in class and we aim to out innovate ourselves and so bringing this forward to patients is about having better efficacy.

Reshma Kewalramani: That'd be a great enticing opportunity for your Vertex shareholders. How do you get, convert people to that drug? Do you have a sense of how you would go that direction?

Reshma Kewalramani: Yeah, yeah. You know, Robin, when we bring molecules forward into late stage development, like the 1, 2, 1, tezacaptor, 5, 6, 1 combination, we are doing so because we have full expectation that we are going to be able to do something that is better for people. We are all about first-in-class and best-in-class, and we aim to out-innovate ourselves. And so bringing this forward to patients is about having better efficacy and once-a-day dosing for them.

Once a day dosing for them there.

And there is of course going to be a control arm and I fully expect the control arm Timothy.

And that triple combination.

And triple combination as a fantastic medicine. It has the potential to treat up to 90 per cent of patients and what we see in the real world in terms of efficacy has been what we saw and the clinical trials. So yes. Indeed this is a very high bar, but that is what we're aiming for.

Reshma Kewalramani: There is, of course, going to be a control arm, and I fully expect the control arm to be the triple combination. And triple combination is a fantastic medicine. It has the potential to treat up to 90% of patients. And what we see in the real world in terms of efficacy has been what we saw in the clinical trials.

Thank you.

Thank you and our next question comes from Matthew Harrison from Morgan Stanley. Your line is now open.

Great. Good afternoon, and thanks for taking the question Stuart I was wondering if I could just get you to comment and a little bit more detail on uptake across the European countries, where you do have reimbursement and then maybe give us some sense for the timeline of what Youre thinking about in terms of the countries, where you don't yet thanks very much.

Reshma Kewalramani: So yes, indeed, this is a very high bar, but that is what we're aiming for. Thank you. Thank you. And our next question comes from Matthew Harrison from Morgan Family. Your line is now open. Great. Good afternoon. Thanks for taking the question.

Yeah, Hey, Matt. Thanks for the question Yeah, the uptake in the countries outside the U S where we do have.

Matthew Harrison: Stuart, I was wondering if I could just get you to comment.

Reimbursement has been very very strong indeed, almost superimposed on what we saw here and the in the US both in terms of uptake, but also in terms of the levels of persistence and compliance that we've seen.

Stuart A. Arbuckle: In a little bit more detail on uptake across the European countries where you do have reimbursement and then maybe give a

Stuart A. Arbuckle: Transcript by Rev.com Page of Yeah, hey Matt, thanks for the question. Yeah, the uptake in the country is, inside the U.S., where we do have... Reimbursement has been very, very good, Unknown Executive, Mohit Bansal, Susie Lisa, William Pickering, Vertex Pharmaceuticals, and that's what's really driven the strong growth of our ex-U.S. revenues in Q1. The same period last year, www.vertex.co.uk Very, very impressive as driven by uptake in those markets where we already had it. We're continuing to make good progress in getting reimbursement in new countries.

And that's what's really driven the strong growth of our ex U S revenues in Q1 versus the same period last year and so we've seen a 43% growth over the same quarter last year. So that's very very impression is driven by uptake in those markets, where we already had already had reimbursement we're continuing to me.

Rick.

Good progress and getting reimbursement in new countries.

Indeed during the first few months of this year.

And we have added new reimbursement agreements in places like Finland, and Israel and Switzerland.

And we're continuing to work with the countries, where we have regulatory approvals, but don't yet have reimbursement and.

Stuart A. Arbuckle: Indeed, during the first New Reimbursement Agreements, like Finland and Israel and Switzerland, and we're continuing to work with countries where we have regulatory approval but don't yet have reimbursement, and in Europe, that would be countries like France. We recently received regulatory approval in Australia. We're working with the www.vertex.co.uk What I can tell you is that we continue to feel very, very confident that we are going to get both regulatory approvals and reimbursement.

In Europe that would be countries, like France, and Italy, and Spain, and obviously, we recently received regulatory approval and Australia, we're working with.

The payback there.

And obviously, we're still waiting for regulatory approval in Canada.

I can tell you.

Is that we continue to feel very very confident that we are going to get both regulatory approvals and reimbursement agreements.

In those countries and that's why we continue to believe that we have very strong growth and I'll see a franchise.

The us to come.

Stuart A. Arbuckle: Thank you. And our next question comes from Brian Abrams from RBC Capital. Your line is now open. Hey there.

Thank you.

And our next question comes from Brian Abrahams from RBC capital.

Your line is now open.

Hey, there. Thanks, so much for taking my questions. Just a couple of quick ones on a a T. From your ongoing work do you have a sense for how long it might take to reach steady state levels of functional a a T and the serum I guess I'm just wondering if we should look at the 28 day data is a snapshot in time or reflecting the full potential of the agent and then how functional.

Brian Abrahams: Thanks so much for taking my questions. Just a couple of quick ones on AAT. From your ongoing work, do you have a sense for how long it might take to reach steady-state levels of functional AAT in the serum? I guess I'm just wondering if we should look at the 28-day data as a snapshot in time or as reflecting the full potential of the agent? And then, how functional would the corrected AAT detected by your assay be relative to the serum?

Would the corrected a T detected by your S. A b relative to wild type. Thanks.

Brian Abrahams: Detective by your assay be relative to the wild type. Thanks.

Reshma Kewalramani: Yeah. Hey, this is Reshma.

Yeah.

This is Rachel and I can take both of those for you from all of the work that we've done pre clinically and in our modeling work.

Reshma Kewalramani: I can take both of those for you. From all of the work that we've done pre-clinically and in our modeling work, 28 days is going to be sufficient for us to reach steady state. And I think that the data that we get from this phase two proof of concept study is going to be very helpful. With regard to whether or not the AAT, the corrected AAT, is functional or not, we are indeed going to be measuring antigenic AAT levels, but we're also going to be measuring functional AAT levels. And those assays are reasonably straightforward.

28 days is going to be sufficient for us to reach steady state and and I think that that data that we get from this phase two proof of concept study is going to be very helpful with regard to whether or not the a T. The corrected AAP is functional or not.

The we are indeed going to be measuring antigenic AA T levels, but we're also going to be measuring functional AAP levels and those assays are reasonably straightforward. So I don't think that that's going to pose any challenge.

Reshma Kewalramani: So I don't think that that's going to pose any challenge. Thanks. And just to complete the thought, Brian, in all the comments that we've done, the corrected protein, the corrected protein that we produce with the small molecule approach is the same as wild. Got it.

Thanks and in.

And just to complete the thought Brian and in all of the.

I meant debt that we've done.

And that corrected protein D.

Corrected protein that we produced with the small molecule approach is the same as wild type.

Geoffrey Christopher Meacham: Thank you. Thank you. And our next question comes from Alethea Young from Cantor Fitzgerald. Your line is now open.

Got it thank you.

Thank you and our next question comes from Alicia Young from Cantor Fitzgerald. Your line is now open.

Reshma Kewalramani: Hey guys, thanks for taking my question. Congratulations on the quarter. I guess I just wanted to talk a little bit about kind of when you think we might start to see some novel conditioning regimens for CTX001, and do you think that's something that possibly could happen relatively soon after a potential commercial launch, or do you think we're a couple years from kind of getting to a more tolerable conditioning regimen? Thanks.

Hey, guys. Thanks for taking my question and congrats on the quarter I guess I just wanted to talk a little bit about kind.

Kind of when you think we might start to see some novel conditioning regimens for CTX areas are one and and do you think that's something that possibly could happen you know relatively soon and after potential commercial launch or is it do you think we're a couple of years from kind of getting to a condition and a more tolerable conditioning regimen. Thanks.

Yeah, Yeah, Yeah. This is ray.

Reshma Kewalramani: Yeah, this is Reshma. Let me address that one for you. So, you know, the conditioning regimen, as we talked about earlier, is really important in opening up this opportunity for the patients beyond that original 32,000 that we discussed that I think are severe enough that they would be amenable to busulfan-based therapy, right? And so I do think that the initial launch will be with the current conditioning regimen. That being said, I do also believe it's a matter of when, not if, gentler conditioning regimens will be available.

Address that one for you.

You know debt.

And <unk> conditioning regimen, and as we talked about earlier is really important and and opening up this opportunity for the.

And the patients beyond that original 32000 and that we discussed that I think are severe enough and.

That they would be amenable to be saw fan based therapy right and so I do think that the initial launch will be with current conditioning regimens.

That being said I do also believe it's a matter of when not if a gentler conditioning regimens will be here and the reason I say that is we at vertex our working on gentler regimen and CRISPR Therapeutics is working on gentler regimens as are a number of other companies.

Reshma Kewalramani: And the reason I say that is we at Vertex are working on gentler regimens, CRISPR Therapeutics is working on gentler regimens, as are a number of other companies. And there are targets that we already know about. There are cell surface markers on hematopoietic stem cells that are the specific cells that we want to target. Those are already known, like CD117, for example. And the payloads are already known as well. And remember, this gentler conditioning regimen has potential use for both oncology indications as well as what we would be looking at in terms of sickle cell and beta cell.

There are targets that we already know about there are cells.

Cell surface markers on hematopoietic stem cells that are specific cells that we wanted to target those are already known and PD 117 for example, and the payloads are already known as well and remember this a gentler conditioning regimen is has potential use for both oncology indications as well as what we.

It would be looking at.

In terms of sickle cell and beta thal. So next some theres a lot of work in this area I do think it's a matter of when and not if.

Reshma Kewalramani: So, net sum, there's a lot of work in this area. I do think it's a matter of when and not if, and I think that this is something that will happen in the near future. Great, thank you. Thank you.

And I think that this is something that is.

And the near future.

Great. Thank you.

Operator: Thank you. And our next question comes from Paul Matisse from CFO. Your line is now open.

Thank you.

Yeah.

The next question.

Thank you and.

Our next question comes from Paul <unk> from Stifel. Your line is now open.

Paul Matisse: Hey, thanks so much.

Hey, Thanks, so much I want to ask one more question and business development might.

Paul Matisse: I want to ask one more question.

It might be my mistake, but I had kind of gotten a sense over a couple prior quarters that you had been more open to doing larger transactions and then when we look at the balance sheet. This year, you made and closer and closer to 10 billion and cash what's your thought here on deal size and I guess, you had said restroom and more of the same so does that mean, we shouldn't really expect.

Operator: Transcripts provided by Transcription Outsourcing, LLC.

Paul Matisse: This year, you may end up close to close to 10 billion.

Paul Matisse: Cash. What's your thought here on deal size? And I guess you had said Reshma more of the same. So does that mean we shouldn't really expect a deal that's set?

The deal that say bigger than 1 billion or so and maybe more likely and number of kind of smaller strategic transactions.

Reshma Kewalramani: Unknown Executive, Mohit Bansal, Susie Lisa, William Pickering, Vertex Pharmaceuticals Hey Paul, um...

Okay.

Hey, Paul.

Reshma Kewalramani: Hey, Paul. It's all about our strategy, and I laid out our business development strategy a few minutes ago. It's not about deal size. And I'm not going to add to the speculation, but you should feel high confidence that the strategy is exactly the same. Thank you. And our next question comes from Brian Corny from Baird. Your line is now open.

You know, it's all about our strategy.

And I laid out our business development strategy.

A few minutes ago, it's not about deal size and I'm not going to add to the speculation, but you should feel high confidence that the strategy is exactly the same.

Okay. Thank you.

Yeah.

And thank you.

And our next question comes from Brian Corny from Baird. Your line is now open.

Brian Abrahams: Hey, thanks for taking my question.

Hey, Thanks for taking the question.

Brian Abrahams: I was hoping, I wanted to kind of get some of your insights on the gene editing approach for DMD and how to kind of think about the various mutations that occur in dystrophin and how you correct them. We're all sort of used to the various mutations based on the exon, skipping a manifold groups, but even within those areas, there seem to be many unique mutations. So I guess, you know, when you think of gene editing, would you have to tackle each one?

And I was hoping and I want to kind of get some of your insights on the gene editing approach for DMD and and how to kind of think about the various mutations.

And that a car and dystrophin and and how do you how you're correct. We're all sort of used to the various mutations based on the exon skipping them and a full groups, but even within those areas there seem to be many unique mutations. So I guess, you know and you think of gene editing would you have to tackle each one of these mutations.

Operator: Transcription by Transcription Outsourcing, LLC.

Mutations and in a separate product or is there something out of the box in terms of and edit and that can be done to us to sort of tackle the whole.

Reshma Kewalramani: Yeah, So when you talk about DMD, right? There are two fundamentally different approaches to this. One is with microdystrophins, which many others are doing, not us, and our approach, which is based on CRISPR gene editing to reframe the reading of the codon so that we can produce full-length or near-full-length proteins. Sounds like a plan, right? So when you think about the advantages and disadvantages of each, and there are many, the potential advantage to a microdystrophin approach is that it's a singular approach for multiple access.

Disease landscape are what's one product.

Yeah Yeah.

So when you talk about D. M. D. Right. There are two fundamentally different approaches to this one is with micro district, which many others are doing not us and our approach, which is based and CRISPR gene editing to reframe.

The the reading of.

The code on it so that we can produce full length or near full length proteins right. So when you think about the advantages and disadvantages of each and and they are the the potential advantage to our micro dystrophin approach is that it's a singular approach for multiple exon that.

Reshma Kewalramani: The great disadvantage, of course, is that it's not anywhere close to a full-length protein. Our approach is the full-length protein, which has the great benefit of being exactly the protein that we are trying to target. So having a full-length protein is critically important. What we see as the approach here is to come forward with the first exon and then to have an approach and an agreement with regulators that once we have that first exon, the second, third, fourth would be far more efficient, and obviously, our intent is to bring those forward on shorter timelines because the bulk of the work will have been done with the first. So then, just to clarify, would the approach to the edit be to like effectively edit?

Great disadvantage of course that it is that it's a it's not anywhere close to a full length proteins.

And our approach is the full debt protein, which has the great benefit of being what is exactly.

The protein that is.

What we are trying to target so having full length protein is critically important.

What we see as the approach here is to come forward with the first Exxon and.

And then to have and approach and an agreement with regulators that once we have that first Exxon that the second third and fourth would be a far more efficient.

And obviously, our intent is to bring those forward on shorter timelines because the bulk of the work will have been done with the first Exxon.

Got it. So then just to clarify would would would the approach to the added beta.

Operator: Unknown Executive, Mohit Bansal, Susie Lisa, William Pickering, Vertex Pharmaceuticals Inc. I'm at a mobilization.

Actively edit out the entire axon.

Exon 51, and the case of and exon 51.

And animal nutrition.

Reshma Kewalramani: Maybe I could explain it this way. What we're really talking about is getting to all of the mutations in DMVs. We would need a few vectors, just a few different guides, and then we could get to all of the amenable mutations. And remember, the big picture item here really is a bigger difference than whether we need to have one vector or not. It will take a few vectors and a few guides, but the more important issue is that microdystrophins are a very short form of the protein that is not expected to provide the benefit of the full-length protein.

But maybe I can explain it this way what we're really talking about to get to all of the other mutations in DMD and we would we would need a few vectors just a few different guide and then we could get to all of the amenable.

Mutations and remember the big picture.

Item here really is a bigger difference than we.

Whether we need to have one vector and not it will take a few vectors and a few guide but the more important issue is the micro dystrophin or a very short form of the protein that are not expected to provide the benefit of the full length protein and and you know debt in January of this year.

Reshma Kewalramani: And you know that in January of this year, there was the first readout of a randomized control trial using microdistrophin, and it was not a positive trial. That's why the bigger picture item to keep in mind here is that our approach is near full-length or full-length. Great, thank you, and thank you. Now I would now like to turn the call back over to Michael Partridge.

Here there was the first readout of our randomized controlled trial using micro dystrophin and it was not a positive trial, that's why the the bigger picture.

Item to keep in mind here is that our approach is a near full length or full length dystrophin.

Great. Thank you.

And thank you and now I would now like to turn the call back over to Michael Partridge for closing remarks.

Geoffrey Christopher Meacham: Thank you all for joining us on this virtual partridge for my closing remarks.

Operator: Thanks, Operator. Thank you all for tuning in to our first quarter conference call. The Investor Relations Team is available tonight if you have any questions. Have a good night, and you can now. This concludes today's conference call. Thank you for participating, and you may now disconnect. Thank you and have a great day.

Thanks, operator.

You all for tuning into our first quarter conference call. The Investor Relations team is available Tonight, if you have additional questions.

Have a good night and you can now disconnect.

This concludes today's conference call. Thank you for participating and you may now disconnect. Thank you and have a great day.

Operator: Oh

Hum.

[music].

And.

And.

And.

Yes.

And.

Okay.

And one of them.