Q3 2021 Vertex Pharmaceuticals Inc Earnings Call
Unknown Executive: On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's CEO and President, Stuart Arbuckle, Chief Operating Officer, and Charlie Wagner, Chief Financial Officer. Dr. Bastian Osana, Executive Vice President and Chief of Cell and Genetic Therapies at Vertex, will join us for Q&A. We recommend that you access the webcast slides as you listen to this call. This call is being
Good evening. This is Michael Partridge, welcome to the vertex third quarter 2021 financial results conference call on Tonight's call, making prepared remarks, we have Dr restaurant, okay, well, where money vertex as CEO and president.
Stuart Arbuckle, Chief operating Officer, and Charlie Wagner, Chief Financial Officer, Dr. Bastian, Rossana Executive Vice President and chief of cell and genetic therapies at vertex will join us for Q&A.
Unknown Executive: A replay will be available on our website. We will make forward-looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission. These statements, including without limitation, those regarding Vertex's marketed CF medicines, our pipeline, and Vertex's future financial performance, are based on management's current assumptions, while actual outcomes and events could differ materially. I would also note that select financial results and guidance we will review on the call this evening are non-GAAP. I will now turn the call over to Dr. Reshma Kewalramani.
We recommend that you access the webcast slides as you listen to this call. This call is being recorded a replay will be available on our website.
We will make forward looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission. These statements, including without limitation those regarding for Texas markets, you have medicines, our pipeline and for Texas future financial performance are based on management's current assumptions actual outcomes and <unk>.
Could differ materially.
I would also note that select financial results and guidance. We review on the call. This evening, our non-GAAP I will now turn the call over to Dr. Rich Mckay Wilder money.
Michael: My name is Michael. I'm very pleased to be here with you tonight to discuss Vertex's progress through the first three quarters of 2021. During this year, we've meaningfully increased our leadership in cystic fibrosis, both with our approved CFTR modulators and with the CF programs advancing in our pipeline. We've expanded and accelerated our R&D pipeline beyond cystic fibrosis, and these programs are now delivering clinical results. We have continued to demonstrate exceptional financial performance with significant growth in revenue, high operating margins, and increasing cash flow. Let me elaborate more on each of these three points.
Thanks, Michael I'm very pleased to be here with you Tonight to discuss where Texas progress through the first three quarters of 2021.
During this year, we've meaningfully increased our leadership in cystic fibrosis, both with our approved C. S GR modulators and with the CF programs advancing in our pipeline, we've expanded and accelerated our R&D pipeline beyond CF and these programs are now delivering clinical results.
We have continued to demonstrate exceptional financial performance with significant growth in revenue high operating margins and increasing cash flow, let me elaborate more on each of these three points.
Michael: Starting with CF, from a commercial perspective, third-quarter product revenues were $1.98 billion, representing almost 30% growth year over year. This growth was driven by the performance of Trikafta in the US, including the launch in children ages 6 to 11, and Strong Uptake OUS, where Cafetrio has been reimbursed, including most recently in France and Italy. Based on this strong performance, we are again increasing our revenue guidance and now expect total product revenues for 2021 to be between $7.4 and $7.5 billion.
Starting with CF from a commercial perspective third quarter product revenues were 1.98 billion, representing almost 30% growth year over year. This growth was driven by the performance of <unk> in the U S, including the launch in children Ages, six to 11 and strong uptake O U S.
We're capturing new has been reimbursed, including most recently in France and Italy.
Based on the strong performance, we are again, increasing our revenue guidance and now expect total product revenues for 2021 to be between 7.4 and $7 5 billion as.
Michael: As we look forward, we expect that our CF business will continue to show robust growth in the years ahead, as there are approximately 30,000 CF patients yet to be treated with our CFTR modulators. We've made important progress with our CF R&D pipeline programs this year as well. Based on strong preclinical and clinical results from our next-in-class triple combination regimen of VX121, Tezukafta, and VX561 that demonstrate the potential for superior benefit to existing CFTR modulators, we've accelerated this program into pivotal studies. Both of the Phase III studies are head-to-head trials versus Trikafta. Both studies are up and running and enrolling patients, and we are not stopping there.
As we look forward, we expect that our CF business will continue to show robust growth in the years ahead. As there are approximately 30000 CF patients yet to be treated with our CF T or modulators.
We've made important progress with our C. F R&D pipeline programs this year as well based on strong preclinical and clinical results from our next in class Triple combination regimen of VX 121 turns the capture and VX 561 that demonstrate the potential for superior benefit to.
Listing C F T. Our modulators, we've accelerated this program into pivotal studies.
Of the Phase III studies are head to head trials versus strike actor, both studies are up and running and enrolling patients and.
Michael: We have identified even more promising regimens in our labs, building on 20 years of success, translating our proprietary insights in CF biology into groundbreaking medicines. We are confident that these regimens will allow us to reach our longstanding goal of bringing all CF patients to carrier levels of sweat chloride. Meanwhile, the approximately 10% of people with CF who cannot benefit from a CFTR modulator are working on genetic therapies, including an mRNA approach.
And we are not stopping there we have identified even more promising regimens in our labs building on 20 years of success translating our proprietary insights and C. F biology into groundbreaking medicines. We are confident that these regimens will allow us to reach our long standing goal of bringing all CF patients.
Carrier levels of sweat chloride.
So the approximately 10% of people with CF, who cannot benefit from a C. A T. A modulator, we're working on genetic therapies, including an mrna approach.
Michael: We and our partner Moderna have for some time now been able to synthesize mRNA constructs that restore CFTR protein function in vitro. However, the biggest challenge for us, and for everyone in the field, has been delivery of the mRNA to the target cells. I am very pleased to report that we and Moderna have made a significant breakthrough in delivery this past year. We have now demonstrated that we can efficiently deliver full-length CFTR mRNA to human bronchial epithelial cells in vitro to provide high levels of CFTR function and in vivo through the delivery of nebulized lipid nanoparticles to the bronchial epithelial cells in non-human prima
We and our partner <unk> have for some time now been able to synthesize mrna construct that restores the F. T F protein function in vitro the biggest challenge for us and for everyone. In the field has been delivery of the mrna to the target cells.
I am very pleased to report that we and midterm I have made a significant breakthrough in delivery. This past year. We have now demonstrated that we can efficiently deliver full length C. F T. Our mrna to human bronchial epithelial cells in vitro to provide high levels of C. F T function.
And in vivo through the delivery of Nebulize lipid nanoparticles to the bronchial epithelium cells in nonhuman primates.
Michael: Based on these results, IND-enabling studies for our CFTR mRNA therapy are already underway, and we plan to file an IND and start clinical development in 2022. To close out on CF, I will note that just a few months from now, we will mark the 10th anniversary of the first approval of Kalydeco, our first CFTR modulator, and last month marked two years since the U.S. approval for Trikaf From the phase three clinical trials, our CF medicines have always been appreciated for their outstanding short-term benefits, not just a significant increase in PPFEV1, but decreases in pulmonary exacerbations, increases in weight, and increases in quality of life.
Based on these results I N D, enabling studies for a C. F T. Our mrna therapy are already underway and we plan to file a 90 and start clinical development in 2022 to close out on CF I will note that just a few months from now we will mark the 10th anniversary of the first approval of Kalydeco are.
First CF GR modulator and last month marked two years since the U S approval for Tri CAFTA.
From the phase III clinical trials, our CF medicines have always been appreciated for their outstanding short term benefits not just significant increase in P. P. F E V. One but decreases in pulmonary exacerbations increases in weight and increases in quality of life. We're now in a position where we have tens of thousands of pay.
Michael: We're now in a position where we have tens of thousands of patient years of safety data, and we can appreciate more fully the breadth of clinical benefit with analysis of longer-term real-world data. What we find truly remarkable is that with Kalydeco, we now have data based on an average of six years of follow-up in patients six years and older. And that includes a 78% reduction in the mortality rate and an 89% reduction in the rate of lung transplantation compared to patients who were not eligible for treatment.
Eight years of safety data and we can appreciate more fully the breadth of clinical benefit with analysis of longer term real world data.
What we find truly remarkable is that with Kalydeco. We now have data based on an average of six years of follow up in patients six years and older and that includes a 78% reduction in the mortality rate and an 89% reduction in the rate of lung transplantation compared to <unk>.
Michael: With Trikafta, we now have data showing no decline in lung function after two years of follow-up from the pivotal trial, and this is a first for any CF medicine. I'd like to emphasize that, from our perspective, it is these kinds of long-term data that ultimately determine physician and patient choice of regimens, particularly in CF, where patients take CFTR modulators chronically over a lifetime. Let me turn to our pipeline outside of CF.
Patients who were not eligible for treatment with Tri Captor, we now have data showing no decline in lung function. After two years of follow up from the pivotal trials.
And this is a first for any CF medicine.
I'd like to emphasize that from our perspective. It is these kinds of long term data that ultimately determine physician and patient choice of regimens, particularly in CF, where patients take CF GR modulators chronically over a lifetime.
Michael: First, to our Type 1 diabetes programs and the unprecedented clinical data we recently shared. The pathophysiology of type 1 diabetes is well known. It results from the autoimmune destruction of pancreatic islet cells. Daily injections of insulin have saved the lives of these patients, but patients still suffer from severe long-term vascular complications of the disease, resulting in premature mortality, and unfortunately, the treatment itself can lead to severe hypoglycemic episodes that can be associated with unresponsiveness, seizures, and even death. Therefore, the holy grail for type 1 diabetes for decades has been to replace the damaged pancreatic islet cells and restore insulin production. Early clinical studies using cadaveric islets have demonstrated the curative potential of this approach.
Let me turn to our pipeline outside of CF first two are type one diabetes programs and the unprecedented clinical data we recently shared.
The pathophysiology of type one diabetes is well known it results from the autoimmune destruction of pancreatic islet cells daily injections of insulin has saved the lives of these patients, but patient still suffer from severe longterm vascular complications of the disease, resulting in premature mortality and unfortunately.
The treatment itself can lead to severe hypoglycemic episodes that can be associated with unresponsive ness seizures and even death.
Therefore, the Holy Grail for type one diabetes for decades has been to replace the damaged pancreatic islet cells and restore insulin production.
Early clinical studies using catabolic islands have demonstrated the curative potential of this approach the problem has been producing sufficient quality and quantity of islet cells to treat the millions of people with this disease.
Michael: The problem has been producing sufficient quality and quantity of islet cells to treat the millions of people with this disease. Vertex has developed a proprietary process to make industrial quantities of allogeneic stem cell-derived fully differentiated islet cells that could serve the more than 2.5 million patients with type 1 diabetes. The clinical data from this first patient treated in our VX880 program with these cells are truly remarkable. With a single infusion at half the target dose, combined with standard immunosuppression routinely used in transplantation, we observed substantial improvements across multiple measures of islet cell function that were rapid, robust, and durable through day 90.
Vertex has developed a proprietary process to make industrial quantities of allogeneic stem cell derived fully differentiated islet cells that could serve the more than 2.5 million patients with type one diabetes.
The clinical data from this first patient treated in our VX 880 program with these cells are truly remarkable with a single infusion at half the target dose combined with standard immunosuppression routinely used in transplantation, we observe substantial improvements across.
People measures of islet cell function that were rapid robust and durable through day 90.
Michael: Our stem cell-derived islets produce basal levels of insulin and increased insulin secretion appropriately in response to glucose stimulation. And in the 90 days following infusion, there was a significant reduction in blood glucose as measured by hemoglobin A1C, despite a 91% reduction in exogenous insulin requirements. On the safety side, VX880 was generally well tolerated.
Our stem cell derived eyelets produced basal levels of insulin and increased insulin secretion appropriately in response to glucose stimulation and.
And in the 90 days following infusion there was a significant reduction in blood glucose as measured by hemoglobin, a one C. Despite a 91% reduction in exogenously insulin requirements on the safety side VX 880 was generally well tolerated.
Michael: These cells are the product. They are the common denominator across our Type 1 Diabetes programs, and these results de-risk each of our three programs. In the Cells Alone program, we use standard pharmacologic immunosuppressives. In the next program, we're using our proprietary device for immunoprotection of these cells. The IND-enabling studies for this program are already underway, and we plan to file the IND in 2022. And these same cells are the starting product for our gene-editing program designed to produce hypoimmune islet cells that can evade the immune system.
These cells are the product they are the common denominator across our type one diabetes programs and these results derisked each of our three programs in the cells alone programming standard Pharmacologic immunosuppressive in the next program, we're using a proprietary device for them you know protection of.
These cells the I N D. Enabling studies for this program are already underway and we plan to file the I N D in 2022.
And these same cells are the starting product for our gene editing program designed to produce hyper immune I'll itself that can evade the immune system.
Michael: In cell and gene therapies, it is clear that the curative potential of these approaches is very high, and therefore these therapeutics have potentially rapid paths to registration, involving a reasonable number of patients and a reasonable amount of follow-up. It is with this in mind that we're working with urgency on the VX880 program. Moving on to CTX-001, our non-viral ex vivo gene editing therapy that is designed as a one-time curative approach for sickle cell disease and beta thalassemia. It also stands out as a clear example of how we have accelerated our pipeline for 2021.
In cell and gene therapies. It is clear that the curative potential of these approaches is very high and therefore, these therapeutics have potentially rapid paths to registration involving a reasonable number of patients and a reasonable amount of follow up is with this in mind that we're working with urgency on the VX.
<unk> 880 program.
Moving onto C. T exterior one CTX here's your one is our non viral ex vivo gene editing therapy that is designed as a one time curative approach for sickle cell disease and beta thalassemia he'd also stands out as a clear example of how we have accelerated our pipeline in 2021 C T.
Michael: CTX-001 is our most advanced program outside of CF and continues to have strong momentum. We've now fully enrolled the target number of patients in both the sickle cell disease and beta thalassemia clinical studies. Based on the clinical data we've presented to date, physician and patient interest in these trials has been high, and we have additional patients beyond the target 45 in each trial who are now completing eligibility assessments and will be enrolled this month.
The X years here one is our most advanced program outside of CF and continues to have strong momentum. We've now fully enrolled the target number of patients in both the sickle cell disease and beta thalassemia clinical studies based on the clinical data we've presented to date physician and patient interest in these trials has been high.
And we have additional patients beyond the target 45 in each trial, who are now completing eligibility assessments and will be enrolled this month.
Michael: We anticipate closing out our regulatory discussions in the near term and submitting regulatory filings for approval of CTX-001 by year-end 2022, based on these clinical results. We have high confidence that CTX-001 will be our next medicine to launch. Stuart will comment on the progress of our commercial preparedness in his remarks.
We anticipate closing out our regulatory discussions in the near term and submitting regulatory filings for approval of CTX. Here's your one by year end 2022 based on these clinical results.
We have high confidence that C. T X years her one will be our next launched medicine Stewart will comment on the progress of our commercial preparedness in his remarks.
Michael: On to VX147, where we will have results from the Phase 2 proof of concept study this quarter. This Phase 2 study of VX147 is fully enrolled and focuses on patients with a form of FSGS that is mediated by ApoL1. Our goal is to establish ApoL1 inhibition as a new mechanism that can be used more broadly beyond FSGS in ApoL1-mediated non-diabetic peritoneal kidney disease. Based on the human genetics, the strongly validated target, and the performance of VX147 across a number of in vitro and in vivo assays, we see our APOL1-mediated kidney disease, or AMKD, program as having a high probability of success.
Onto VX 147, where we will have results from the phase two proof of concept study this quarter.
This phase two study of VX 147 is fully enrolled and focuses on patients with a form of F. S. G. S that is mediated by April L. One our goal is to establish April one inhibition as a new mechanism that can be used more broadly beyond F. S. Yes in April.
One mediated non diabetic proteinuria kidney disease base.
Based on the human genetics, the strongly validated target and the performance of VX 147 across a number of in vitro and in vivo assays, we see our April one mediated kidney disease or a M. K D program as having a high probability of success some of the preclinical data from this program.
Michael: Some of the preclinical data from this program are the subject of a presentation at the American Society of Nephrology meeting taking place later this week. In this Phase 2 study, we're assessing the safety of VX147, and the key efficacy marker is reduction of pertinuria. Pertinuria is the clinically relevant endpoint and one that regulators have expressed openness to accepting in a homogeneous population of pertinuric kidney diseases. If our Phase II study in APOL1-mediated FSGS is successful, it would represent a first-in-class demonstration of proof of concept for an APOL1-mediated kidney disease and would propel us into pivotal development in the AMKD population, which includes In total, this represents approximately 100,000 people with AMKD.
Ram are the subject of a presentation at the American Society of Nephrology meeting taking place later this week.
In this phase II study, we're assessing the safety of VX 147, and the key efficacy marker is reduction of proteinuria.
<unk> is the clinically relevant endpoint and one that regulators who've expressed openness to accepting in a homogeneous proteinuria kidney disease population.
If our phase two study in April one mediated F. S. G. S is successful it would represent a first in class demonstration of proof of concept for an April one mediated kidney disease and would propel us into pivotal development in the a M. Katie population, which includes but is not limited to F. S. G S. In.
Michael: I'll conclude the pipeline discussion with a few words on our pain program. We have high confidence in the NAV1.8 target for three main reasons. One, NAV1.8 is genetically validated. In phase 2, NAV1.8 is also pharmacologically validated, with our very own 3-positive Phase 2 proof-of-concept studies in acute, neuropathic, and musculoskeletal pain. And third, our lead molecule in the program, VX548, has the key drug-like properties that we are looking for, including high selectivity and potency. The two Phase II dose-ranging studies in acute pain, bunionectomy, and abdominoplasty with VX548 are well underway.
Total this represents approximately 100000 people with a M K D.
I'll conclude the pipeline discussion with a few words on our pain program, we have high confidence in the NAV one point a target for three main reasons. One NAV 1.8 is genetically validated.
To NAV 1.8 is also pharmacologically validated with our very own three positive phase two proof of concept studies in acute neuropathic and muscular skeletal pain and third our lead molecule in the program VX 548 has the key drug like properties that we're looking for.
Including high selectivity and potency.
The two phase two dose ranging studies in acute pain, bunionectomy and Abdominoplasty with VX 548 are well underway based on enrollment progress. We currently expect data from these studies in Q1 of 2022.
Michael: Based on enrollment progress, we currently expect data from these studies in Q1 of 2022. With that, I'll now turn it over to Stuart to review the commercial progress. Thanks.
Stuart A. Arbuckle: Thanks Reshma. I'll begin by reviewing the Q3 revenue performance of our CF medicines, which reached nearly $2 billion in Q3. U.S. revenues were $1.38 billion, an increase of 13% compared to the prior year, driven by the performance of Trikafta, including the launch in the 6-11-year-old population. The launch in the 6-11-year-old population is progressing rapidly, which is not surprising given the profile of the medicine and the recognition of the importance of early treatment of this relentlessly progressive disease.
With that I'll now turn it over to Stuart to review the commercial progress. Thanks.
Thanks, Rushmore I'll begin by reviewing the Q3 revenue performance of our CF medicines, which reached nearly $2 billion in Q3.
U S revenues were $1.38 billion, an increase of 13% compared to the prior year driven by the performance of Tri CAFTA, including the launch in the six to 11 year old population.
The launch in the six to 11 year olds is progressing rapidly which is not surprising given the profile of the medicine and the recognition of the importance of early treatment of this relentlessly progressive disease.
Stuart A. Arbuckle: Outside the US, revenues were $601 million, an increase of more than 90% over the third quarter of last year, driven by the ongoing launch of Caftrio in the 12-plus population. In particular, Caftrio is off to a strong start in France and Italy, two major markets where we achieved reimbursement in June of this year. We also signed a letter of intent for public reimbursement of Trikafta in patients 12 and over in Canada, and since then, we've achieved multiple provincial reimbursement agreements.
Outside the U S revenues were $601 million, an increase of more than 90% over the third quarter last year driven by the ongoing launch of Caf trio in the 12 plus population.
In particular cafeteria was off to a strong start in France, and Italy, two major markets, where we achieved reimbursement in June of this year.
We also signed a letter of intent for public reimbursement of Tri CAFTA in patients 12, Nova in Canada and since then we've achieved multiple provincial reimbursement agreements and some 90% of patients covered by government insurance now have reimbursed access to try CAFTA.
Stuart A. Arbuckle: And some 90% of patients covered by government insurance now have reimbursed access to Trikafta. We have achieved reimbursement agreements for CAF TRIO-TRIKAFTA in more than 20 countries outside the U.S. in just over one year since approval. And importantly, we've continued to achieve reimbursement at levels that reflect the high value of the Triple Combination Regimen. As Reshma mentioned in her remarks, the profile of our CF medicines continues to be enhanced by long-term data.
We have achieved reimbursement agreements for Caf trio try CAFTA in more than 20 countries outside the U S. Just over one year since approval.
And importantly, we've continued to achieve reimbursement at levels that reflects the high value of the triple combination regimen.
As Russ mentioned in her remarks, the profile of our CF medicines continues to be enhanced by long term data.
Stuart A. Arbuckle: The start of the North American CF Conference is tonight, and among several important abstracts are data from the ongoing 192-week Open Label Extension Study of Trikafta, which shows there has been no loss of lung function during long-term follow-up. This is a first for any CFTR modulator to date, an important milestone for the field. All previous long-term data for our other medicines showed a slowing of lung function decline.
The start of the North American CF Conference is Tonight, and amongst several important abstracts are data from the ongoing <unk> 192 week open label extension study of Tri CAFTA.
It shows there has been no loss of lung function during long term follow up.
This is a first for any C. F T R modulator to date, an important milestone for the field.
Stuart A. Arbuckle: In contrast, these data show no loss of lung function for patients on Trikafta after 96 weeks of follow-up. Real-world data also being presented at the conference on Kalydeco show, at an average of 6 years of follow-up, a 78% reduction in the mortality rate and an 89% reduction in the rate of lung transplantation compared to patients who were not eligible for the treatment. These data are very important for patients and the medical community because they more fully illustrate how our medicines address the long-term progression and complications of the disease. These data also have important implications for the future competitive landscape as they raise the bar in terms of what will be required to compete effectively.
All previous long term data for our other medicines showed a slowing of lung function decline.
In contrast, these data show no loss of lung function for patients on Tri CAFTA. After 96 weeks of follow up.
Real World data also being presented at the conference on Kalydeco show at an average of six years of follow up a 78% reduction in the mortality rate and an 18, 9% reduction in the rate of lung transplantation compared to patients who are not eligible for the treatment.
These data are very important for patients and the medical community because they more fully illustrate how all medicines address the long term progression and complications of the disease.
These data also have important implications for the future competitive landscape as they raise the bar in terms of what will be required to compete effectively.
Stuart A. Arbuckle: Now turning to some of the other opportunities in our pipeline beyond CF. Our commercial experience in CF provides foundational capabilities which we will be able to leverage to commercialize our next wave of transformative medicine. As Reshma mentioned, regulatory submissions for CTX001 are planned for the end of 2022, and so our launch preparation activities are well underway to ensure we are able to bring this potential medicine to patients globally immediately upon approval.
Now turning to some of the other opportunities in our pipeline beyond CF.
Our commercial experience and C. F provides foundational capabilities, which we will be able to leverage to commercialize our next wave of transformative medicines.
As Russ mentioned regulatory submissions for CTX Zero-zero Wong are planned for the end of 2022 and so our launch preparation activities are well underway to ensure we are able to bring this potential medicine to patients globally immediately upon approval.
Stuart A. Arbuckle: We see CTX001 as a potential one-time curative approach for the approximately 32,000 patients with severe sickle cell disease or transfusion-dependent beta thalassemia in the US and Europe. We've developed a deep understanding of the sickle cell and beta thalassemia markets, including where patients with these diseases are and the role that key referral and treatment centers will play to facilitate the treatment journey for patients. Consistent with our own internal market research, published physician surveys in the US consistently indicate that they would expect a quarter to a third of their patients with sickle cell disease to be good candidates for a one-time curative approach using the current conditioning regimen, which is in line with the estimates of the number of patients with severe disease, approximately 25,000 sickle cell disease patients. We are focused on three key areas of launch preparation for CTX-001. First People.
We see CTX 001, as a potential onetime curative approach for the approximately 32000 patients with severe sickle cell disease or transfusion dependent beta thalassemia in the U S and Europe.
We've developed a deep understanding of the sickle cell and beta thalassemia markets, including where patients with these diseases are and the role that key referral and treatment centers will play to facilitate the treatment journey for patients.
Consistent with our own internal market research published physician surveys in the U S consistently indicate that they would expect a quarter to a third of that patients with sickle cell disease to be good candidates for a onetime curative approach using the current conditioning regimen.
Which is in line with the estimates of the numbers of patients with severe disease, approximately 25000 sickle cell disease patients.
We are focused on three key areas of launch preparation for CTX 001.
Stuart A. Arbuckle: We've hired many of the key people who will support the launch. 2nd Manufacturing. This is an area we have focused on from the earliest days of our work on CTX001 to ensure we can supply a consistent and high-quality product to the large number of patients we believe will benefit from the medicine on day one of the launch. Importantly, we are using the same manufacturing sites and processes for commercialization that we are using for our clinical trials, and Third Patient is making sure we really listen to them and understand them and their experience so we can provide them at launch with the information resources and support they need as they consider treatment with CTX001. Now, turning to pain.
First people, we've hired many of the key people who will support the launch.
Second manufacturing.
This is an area. We are focused on from the earliest days of our work on CTX 001 to ensure we can supply a consistent and high quality product to the large number of patients. We believe will benefit from the medicine on day one of the launch.
Importantly, we are using the same manufacturing sites and processes for commercialization that we are using for our clinical trials.
And third patients, making sure we really listen understand them and their experience. So we can provide them at launch with the information resources and support they need as they consider treatment with CTX Zero-zero Wong.
Stuart A. Arbuckle: With our acute pain studies well underway, I thought I would remind you of the large market opportunity there. Acute pain accounts for 1.8 billion treatment days a year in the U.S. alone, and despite more than 90% of prescriptions being generic, this is still today a $4 billion market. At typical branded pain medicine prices of approximately $10 a day, a new medicine that takes even a portion of the current treatment days has multi-billion dollar potential.
Now turning to pain with.
With our acute pain study is well underway I thought I would remind you of the large market opportunity there.
Acute pain accounts for 1.8 billion treatment days, a year in the U S alone and despite more than 90% of prescriptions being generic this is still today, a 4 billion dollar market.
That's typical branded pain medicine pricing of approximately $10 a day, a new medicine that takes even a portion of the current treatment days has multibillion dollar potential.
Stuart A. Arbuckle: In light of the unprecedented data for VX880, it's also worth highlighting the market opportunity for type 1 diabetes, which is very large. Let me start with the disease. Type 1 diabetes is a debilitating and life-shortening disease in which, due to autoimmune destruction of pancreatic islet cells, the body produces little to no insulin.
In light of the unprecedented data for VX 880, it's also worth highlighting the market opportunity in type one diabetes, which is very large let.
Let me start with the disease.
Type one diabetes is a disease affecting more than 2.5 million people in the U S and Europe alone.
It is a severely debilitating and life shortening disease in which due to autoimmune destruction of pancreatic islet cells. The body produces little to no insulin.
Stuart A. Arbuckle: There are two patient populations to consider. First, those with severe enough diabetes for whom the benefit-risk profile is positive for the cells alone, plus standard immunosuppressive therapy, and secondly, the broader population who would be candidates for the cells encapsulated in our proprietary device or hyperimmune cells where immunosuppression would not be needed. There are at least 60,000 patients with type 1 diabetes in the US and Europe who are potential candidates for the first approach with VX88.
There are two patient populations to consider fair.
First those with severe enough diabetes for whom the benefit risk profile is positive for the cells alone plus standard immunosuppressive therapy and.
And secondly, the broader population who would be candidates for the cells encapsulated in a proprietary device or hypo immune cells, where immunosuppression would not be needed.
There are at least 60000 patients with type one diabetes in the U S and Europe, who are potential candidates for the first approach with VX eight a T.
Stuart A. Arbuckle: This group is made up of people who have severe, difficult-to-control forms of type 1 diabetes characterized by impaired awareness of hyperglycemia and severe hyperglycemic events that can be life-threatening. There are approximately 45,000 patients in this category, and then there are people with type 1 diabetes who have had previous organ transplants, primarily kidney, and so are already on immunosuppression. There are about 15,000 patients in this category. Cadaveric islet and whole pancreas transplants have already been performed, albeit in small numbers of these patients, and give some sense of the value of this type of intervention in a patient with severe disease.
This group is made up of people, who have severe difficult to control forms of type one diabetes characterized by impaired awareness of hyperglycemia and severe hypoglycemic events that can be life threatening.
There are approximately 45000 patients in this category.
And then there are people with type one diabetes, who have had previous organ transplants, primarily kidney and so already on immuno suppression.
There are about 15000 patients in this category.
Cat of Eric Eyelet, and whole pancreas transplants are already performed albeit in small numbers of these patients and give some sense of the value of this type of intervention in a patient with severe disease.
Stuart A. Arbuckle: For illustrative purposes, if you use the benchmark price in the US for a pancreatic transplant of approximately $400,000 per patient as the price for a cell-based treatment, treating even a minority of the eligible patients would represent a multi-billion dollar opportunity. Beyond VX880, the Cells Plus device program, which encapsulates the same cells for which we recently reported unprecedented clinical data into our proprietary device that protects these cells from the immune system, could address the broader type 1 diabetes population.
For illustrative purposes, if you use the benchmark price in the U S for a pancreatic transplant of approximately $400000 per patient as the price for a cell based treatment treating even a minority of the eligible patients would represent a multibillion dollar opportunity.
Beyond VX 880, the cells plus device program, which encapsulates the same cells for which we recently reported the unprecedented clinical data into our proprietary device that protects the cells from the immune system could address the broader type one diabetes population too.
Stuart A. Arbuckle: 2.6 million patients in the US and Europe. In summary, I'm pleased with our continued progress in bringing our CF medicines to more patients around the world and excited about the many opportunities in our pipeline. And with that, I'll turn it over to Charlie. Thanks, Stuart.
2.6 million patients in the U S and Europe.
In summary, I'm pleased with our continued progress in bringing our CF medicines to more patients around the world and excited about the many opportunities in our pipeline.
Charles F. Wagner: In the third quarter of 2021, Vertex's long-term track record of strong revenue growth continued. Total product revenues were $1.98 billion, a 29% increase compared to the third quarter of 2020. Notably, Trikafta represented nearly 80% of third-quarter revenues as most eligible patients have switched to Trikafta. Our third-quarter revenues included $1.38 billion in the U.S. and $601 million outside the U.S. Ex-U.S. revenues for the quarter grew 92% over the prior year, driven by continued strong uptake for Keftrio. Our third quarter combined R&D and SG&A expenses were $561 million compared to $497 million for the third quarter of 2020, driven largely by investment in our clinical stage programs and our research pipeline.
With that I'll turn it over to Charlie.
Thanks Stuart.
In the third quarter of 2021 vertex is long term track record of strong revenue growth continued.
Total product revenues were 1.98 billion.
A 29% increase compared to the third quarter of 'twenty 'twenty.
Notably Tri CAFTA represented nearly 80% of third quarter revenues as most eligible patients have switched to trek after.
Our third quarter revenues included 1.38 billion in the U S and 601 million outside the U S.
Ex U S revenues for the quarter grew 92% over the prior year driven by continued strong uptake for Caf trio.
Our third quarter combined R&D and SG&A expenses were 561 million compared to 497 million for the third quarter of 'twenty 'twenty driven largely by investment in our clinical stage programs and our research pipeline.
Charles F. Wagner: We expect our R&D investments will continue to be substantial as we advance our mid and late stage programs and make further clinical and regulatory progress across the pipeline. Our continued growth in revenues, combined with disciplined growth in OPEX, translates to a year-to-date operating margin of 59%. And with our strong revenue and profitability, we ended the second quarter with $7 billion in cash. Now to guidance.
We expect our R&D investments will continue to be substantial as we advance our mid and late stage programs and make further clinical and regulatory progress across the pipeline.
Our continued growth in revenues combined with disciplined growth in Opex translates to a year to date operating margin of 15, 9%.
And with our strong revenue and profitability. We ended the second quarter with 7 billion in cash.
Charles F. Wagner: We are again revising our 2021 guidance upward for total product revenues in the range of $7.4 to $7.5 billion. This increase reflects continued outperformance as well as the rapid uptake we have seen with new launches. Year over year, this guidance represents 20% growth at the midpoint. As Stuart highlighted, the 6-11 launch in the U.S. and the uptake in France and Italy are proceeding very rapidly.
Now to guidance.
We are again revising our 2021 guidance upward for total product revenues in the range of 7.4 to 7.5 billion.
This increase reflects continued outperformance as well as the rapid uptake we have seen with new launches.
Year over year this guidance represents 20% growth at the midpoint.
As Stuart highlighted the six to 11 launch in the U S and the uptake in France, and Italy are proceeding very rapidly.
Even with the outstanding growth in the number of patients treated this year, we have approximately 30000 patients left to treat with our C. A T or modulators.
Charles F. Wagner: Even with the outstanding growth in the number of patients treated this year, we have approximately 30,000 patients left to treat with our CFTR modulator. Given our proven track record of securing new reimbursement agreements in additional markets, executing successful launches, and expanding access to younger age groups. We are confident that we will be able to reach the vast majority of these patients with our medicine. We are maintaining our non-GAAP OPEX guidance for full year 2021 at $2.25 to $2.3 billion. And for our non-GAAP tax rate, we continue to guide to a range of 21-22% this year.
Given our proven track record of securing new reimbursement agreements in additional markets.
Executing successful launches and expanding access to younger age groups.
We are confident that we will be able to reach the vast majority of these patients with our medicines.
We are maintaining our non-GAAP opex guidance for full year 2021 at 2.25 to 2.3 billion.
And for our non-GAAP tax rate, we continue to guide to a range of 21% to 22% this year.
In conclusion.
2021 will be another year of rapid growth for vertex and we're confident in our continued growth trajectory and C F and our ability to lead in this therapeutic area over the long term.
Charles F. Wagner: In conclusion, 2021 will be another year of rapid growth for Vertex, and we are confident in our continued growth trajectory in CF and our ability to lead in this therapeutic area over the long term. Trikapta is an exceptional medicine that sets a very high bar for efficacy and safety with IP that extends to the late 2030s, with the emerging profile of our next regimens beyond TRIKAFTA as well as the progress we are making in genetic therapies for CF.
Captor is an exceptional medicine.
That's a very high bar for efficacy and safety with IP that extends to the late 'twenty thirties.
With the emerging profile of our next regimens beyond trade CAFTA as well as the progress we are making in genetic therapies for CF we.
We are well on our way to fulfilling our vision for achieving carrier levels in all CF patients.
The VX 121, Tesla Captor, VX 561 regimen as the only regimen with clinical data that shows the potential to meet or exceed the performance of Tri CAFTA and is years ahead of any other regimens and development.
Charles F. Wagner: We are well on our way to fulfilling our vision of achieving carrier levels in all CF patients. The VX121-Tezukafta VX561 regimen is the only regimen with clinical data that shows the potential to meet or exceed the performance of Trikafta and is years ahead of any other regimens in development. Our pipeline beyond CF is both advancing and delivering. Progress with CTX-001 and, more recently, VX-880 continues to demonstrate the value we can create by investing in external innovation.
Our pipeline beyond CF is both advancing and delivering.
Progress with CTX or one and more recently VX 880 continues to demonstrate the value we can create by investing in external innovation.
We look forward to sharing additional data with you as ongoing trials come to completion in the coming months.
We anticipate phase two data for VX 147 in April well, one mediated F. S. T S and phase two data for VX 548 in acute pain in the near term.
Charles F. Wagner: We look forward to sharing additional data with you as ongoing trials come to completion in the coming months. We anticipate Phase 2 data for VX147 in APOL1-mediated FSGS and Phase 2 data for VX548 in acute pain in the near term. With growing revenues and margins at the top of our peer group, we will deliver strong cash flows as we continue to reinvest in internal and external innovation to drive future growth. We are confident that the execution of our business strategy will continue to drive exceptional results for patients and the medical community, as well as for our shareholders. We will now open up the call to questions.
With growing revenues and margins at the top of our peer group, we will deliver strong cash flows as we continue to reinvest in internal and external innovation to drive future growth.
We are confident that the execution of our business strategy will continue to drive exceptional results for patients and the medical community.
As well as for our shareholders.
We will now open up the call to questions.
If you would like to ask a question. Please press Star then one.
If your question has been answered and you'd like to remove yourself from the queue press the pound key.
Operator: If you would like to ask a question, please press star, then one. If your question hasn't been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Salveen Richter of Goldman Sachs. Your line is open.
Our first question comes from solving Richter with Goldman Sachs. Your line is open.
Good afternoon. Thanks for taking my question two on the pipeline here.
The car to your collaboration with Mcdonough.
I recognize that you are moving forward nicely with the with delivering Marni via Ellen piece could you just talk about where you stand with using mrna to explore the use of gene editing in lung cells and then secondly.
Salveen Richter: Good afternoon. Thanks for taking my questions, too, on the pipeline here. With regard to your collaboration with Moderna, I recognize that you're moving forward nicely with delivering mRNA via LNPs. Could you just talk about where you stand with using mRNA to explore the use of gene editing in lung cells? And then secondly, on the development plan for type 1 diabetes, maybe you could touch base on the expanded collaboration with Arbor and how that fits into the outlook here.
On the development.
Development plan in type one diabetes, maybe you could touch base on the expanded collaboration with Arbor, and how that fits into that.
Look here.
Yeah, Hey, Savi. This is rajesh my two questions in there one about the mrna program with Madonna and another question I think on type one diabetes, but specifically with regard to our collaboration with Arbor, and how we're thinking about the hypo immune cell program.
Reshma Kewalramani: Yeah. Hey, Salveen, this is Reshma.
Reshma Kewalramani: Two questions in there, one about the mRNA program with Moderna, and another question, I think, about type 1 diabetes, but specifically with regard to our collaboration with Arbor and how we're thinking about the hypoimmune cell program. Let me break it up into two parts, and maybe I'll expand a little bit on type 1 diabetes even beyond the collaboration with Arbor. Let's start with Moderna.
Break it up into two parts and maybe I'll expand a little bit and type one diabetes, even beyond the <unk> collaboration with Arbor, let's start with Madonna and we are very excited about the recent breakthrough we made in that I shared in my prepared remarks on the mrna program for the last 10%.
Reshma Kewalramani: We are very excited about the recent breakthrough we made and that I shared in my prepared remarks on the mRNA program for the last 10% of patients with CF who simply don't make any CFTR protein, right? And when you step back and think about what you really need to do to make a breakthrough here, it's really about three things. It's not about the HPE cells. It's about the mRNA construct itself. And then, for sure, it's about delivery. And it's this last one, delivery, that's been a vexing problem for us in the field as a whole.
Ah Ah patients with CF, who simply don't make any see FTR protein right and when you step back and think about what do you really need to do to make a breakthrough here, it's really about three things it's about the H B E.
It's about the mrna construct itself and then for sure about delivery and it's this last one delivery that's been a vexing problem for for up in the field as a whole and and that's really the exciting news for for today.
With regard to the H B E. Solve these have been the work horse for the four medicines that we have brought forward already and I say that because they are the only model that translates from the bench to the bedside right and it's not only qualitatively so but quantitatively so and it's these H b E cells that have also been the workhorse.
Reshma Kewalramani: And that's really the exciting news for today. With regard to the HBE cells, these have been the workhorse for the four medicines that we have brought forward already. And I say that because they are the only model that translates from the bench to the bedside, right? And it's not only qualitatively so, but quantitatively so.
For the program with Madonna the second is the mrna construct itself in a number of years ago. We have struck up a partnership with Madonna arguably the best company in the space of mrna and in all honesty, we have for some time been able to express full length C. F T. Our mrna.
Reshma Kewalramani: And it's these HBE cells that have also been the workhorse for the program with Moderna. The second is the mRNA construct itself. A number of years ago, we struck up a partnership with Moderna, arguably the best company in the space of mRNA.
Reshma Kewalramani: And in all honesty, we have for some time been able to express full-length CFTR mRNA, the protein, and demonstrate its functionality. We've been able to do all that in vitro in HBE. But over the last several months, what we have now been able to do is demonstrate that we can deliver the LNPs using nebulized LNPs to the appropriate cells. So, that is to say, to bronchial epithelial cells, and we've done this in small animals and large animals, and we can see that we've delivered the mRNA construct to the bronchial epithelial cells. No one else has claimed to do this, and certainly no one else has been able to do it.
The protein and demonstrate its functionality.
We've been able to do all that in vitro and H b, but over the last several months what we have now been able to do is demonstrate that we can deliver using nebulize L N piece to be appropriate cells.
So that is to say to bronchial epithelial cells and we've done this in small animals and large and we can see that we've delivered them to delivered the mrna construct to the bronchial epithelial cells no one off a claim to do this and certainly no. One else has been able to do that so that's the the big advancement that allows us to.
Reshma Kewalramani: So that's the big advancement that allows us to go and start our GLP enabling studies. Those are already underway, and I do expect the IND to go in next year. On type 1 diabetes, Salveen, there are the cells themselves. And then there are the mechanisms to cloak the cells, right? In the first program with VX880, we use simple off-the-shelf pharmacologic immunosuppressives. In the second program, it's cells plus device. Those IND studies are already underway, and IND next year. The third program is using these same cells.
Go.
And start our G L P.
Enabling studies those are already underway and I do expect the <unk> to go in next year.
On type one diabetes celgene there are the cells themselves.
And then there are the mechanisms to cloak themselves right in the first program with VX 880, we use simple off the shelf pharmacologic Immunosuppressants and the second program itself plus device. Those <unk> studies are already underway I N. D. Next year. The third program is using these.
Same cells and for the cloaking, we use are planned to use gene editing for example to make hypo immune cell.
Reshma Kewalramani: And for the cloaking, we use our plan to use gene editing, for example, to make hypoimmune cells. I'm going to ask Bastiano to comment just a little bit more on the hypoimmune program. Bastiano? Absolutely. Thanks, Reshma. Thanks, Salveen, for the question.
Beyond air to comment just a little bit more on the hyper immune program casiano, absolutely. Thanks freshmen at solving for that question. So.
Reshma Kewalramani: Absolutely. Thanks, Reshma. Thanks, Salveen, for the question.
Let Krishna says that the policy is actually to sell the fully differentiated allogeneic better ourselves.
Bastian Osana: So... Like Krishna said, the problem is actually the cells, the fully differentiated allogeneic beta cells. Aiding cells to cloak them from the immune system is, in general, a complex scientific challenge. Specific to type 1 diabetes, it represents an even more complicated problem because the cause of type 1 diabetes is an autoimmune disease, so we have to cloak the cells from the general allogeneic response but also from the autoimmunity, and of course, allogeneic rejection is something that has been worked on for the past, let's say, two decades, and knocking out MHC class 1 and 2 is the usual place where most people will go There are other mechanisms we are exploring internally and through collaboration to be sure that we take care of both types of immunity, the allogeneic rejection and autoimmunity.
Sales to close off on the new system is a complex challenge in jail specific type one diabetes represents a even more complicated because the call.
Type one diabetes is an autoimmune disease. So we have to cloak themselves from the jail allogeneic. There's bosworth also from the Alpha immunity.
And of course, it's fairly obvious that allogeneic.
Rejection is the salt and the as being worked on that path.
Say two decades and of course looking out MHC class one and two is the usual place where most people will go and with doing that internally.
All of the mechanism, we are exploring internally and through collaborations to be sure. They will take care of both types of immunity, the allogeneic of injection and the alpha immunity.
Okay.
Great. Thank you.
Our next question comes from Michael Yang with Jefferies. Your line is open.
Operator: Our next question comes from Michael Yee with Jeffries. Your line is open.
Michael J. Yee: Hi, good morning. Good morning, and good afternoon. I had two questions. It's been a long day.
Hi, Good morning. Good morning, Good afternoon, I had two questions. It's been a long day one is actually the announcement. This quarter that you had moved your new CF program into phase III and I would like for you to comment about it in the context of how much clear differentiation.
Michael J. Yee: One is actually the announcement this quarter that you have moved your new CF program into phase three. And I would like you to comment on that in the context of how much clear differentiation you're confident it is from Trikafta, but also in the context of the fact that everybody knows there's a competitor with data coming and how we should interpret that in the context of your data that you put out in a press release and how differentiated they could be.
And you're confident it is from Tri CAFTA, but also in the context of the fact that everybody knows theres, a competitor with coming data coming and how we should interpret that in the context of your data that you put out in our press release and how differentiated it could be the second question is more a question around the fact that you had comment.
Michael J. Yee: The second question is more a question around the fact that you had commented about M&A earlier this year. In fact, Reshma had commented even about areas like Huntington's. And I just wanted you to refresh that view on the fact that you haven't really commented on that so much like you did earlier this year in the recent past quarters. Thank you.
Good about M&A earlier this year in fact rush med commented even about areas like Huntington's and I. Just wanted you to refresh that view in the fact that you haven't really commented about that show much like you did earlier this year and reaching prior quarters. Thank you.
Reshma Kewalramani: Sure. Hey Michael, good afternoon.
Sure Hey, Michael Good afternoon, let's to the.
Reshma Kewalramani: Let's do the question first, and then I'll come to capital allocation and and M&A. So We have obviously established ourselves as a leader in CF over the last decade plus. And over the recent few years, we've expanded that leadership first with Tricaster that can serve up to 90% of people with CF. And then with the specific program that you're asking about, VX121-561-TEZ, which preclinically in these HPE cells that are a model that translates from bench to bedside have demonstrated the potential to have even better efficacy than Trikafta and in the clinical program from the phase two results that we shared earlier in the year where it looks that 1, 2, 1, 5, 6, 1 test has the ability to provide even more benefit than Trikafta.
Question first and then I'll I'll come to capital allocation and M&A.
So.
We are obviously established ourselves as a leader in CF over the last decade, plus and over the recent few years, we've expanded that leadership first try caster that can serve up to 90% of people with CF and then with the specific program that you're asking about VX one to one.
561 test.
Which tweak clinically in these H b E cells that are a model that translate from bench to bedside have demonstrated the potential to have even better efficacy than try character and in the clinical program from the phase II results that we shared earlier in the year, where it looks that.
One to 1561 cat has the ability to provide even more benefit than after.
Reshma Kewalramani: Now make no mistake about it, Trikafta sets an incredibly high bar. It's an extraordinary medicine with a very high benefit-risk profile, but 1, 2, 1 is the competitor to Trikafta. It's years ahead of anything else in the field.
Now make no mistake about it kept us at an incredibly high bar, it's an extraordinary medicine with it with a very high benefit risk profile, but one to one frankly is the competitor to track. It years ahead of anything else.
Reshma Kewalramani: If I just stand back and look at this, Mike, we have the best medicine for CF today in the form of Trikafta. We have the best medicine for CF tomorrow in the form of 1, 2, 1, 5, 6, 1, Tezacaptor. And as I look long term, when you really think about CF, a chronic disease; children are born with this disease, they're going to take medicine for a lifetime, chronically, you're going to need long-term data, the kind of data that Stuart talked about in his prepared remarks, mortality, lung transplantation, rate of decline, and to be clear, the only company that has both the short-term data and the long-term data is Ver Yep, thanks, Reshma and Mike.
In the field.
If I just stand back and look at this Mike we have the best medicines for CF today in the form of try Kafka, we have the best medicine for CF Tomorrow in the form of one to 1561 has the captor.
And as I look long term when you really think about CF a chronic disease children are born with this disease, they're going to take medicine for a lifetime chronically.
Youre going to need long term data the kind of data that Stuart talked about in his prepared remarks mortality.
Lung transplantation rate of decline and to be clear the only company that has a short term data and the long term data is vertex.
With regard to capital allocation, Charlie I'll ask you to comment on on that one.
Charles F. Wagner: Yep, thanks Reshma and Mike, thanks for the question. Listen, it's very clear to us that innovation is the greatest driver of value in this industry, and we have shown that in CF, that innovation that leads to transformative medicines for a serious disease creates tremendous value both for patients and for shareholders, and we hope to do that in a number of other disease areas that are represented across our broad pipeline. So, when it comes to capital allocation, our primary focus is on reinvestment in innovation, both internally and externally.
Thanks, Brian and Mike Thanks for the question.
Listen, it's very clear to us that are in a.
<unk> is the greatest driver of value in this industry.
And we have shown that in CF that innovation that leads to transformative medicines for serious disease creates from an as value both for patients and for shareholders and we hope to do that in a number of other disease areas that are represented across our broad pipeline.
So when it comes to capital allocation. Our primary focus is on reinvestment in innovation, both internally and externally.
Charles F. Wagner: You can see in the numbers that we've never invested more internally than we are today, and you can also see in the pipeline the benefit of some of the smart external investments that we've made over the last couple of years. I would call out CRISPR and Sema specifically, but there are many others. And so from a capital allocation standpoint, reinvestment in innovation will continue to be the top priority. You know, we've not commented specifically on types of deals because we're not looking for a certain type of deal.
You can see in the numbers, we've never invested more internally than we are today and you can also see in the pipeline are the benefit of some of the smart external investments that we've made over the last couple of years I would call out CRISPR and summer specifically, but there are many others.
And so from a capital allocation standpoint that reinvestment in innovation will continue to be the top priority. We have not commented specifically on types of deals because we're not looking for a certain type of deal.
We're looking for tools and technologies and assets that fit and are well aligned with our research strategy and as we identify those you can expect that we'll continue to be disciplined and move quickly when we see an opportunity.
Charles F. Wagner: We're looking for tools and technologies and assets that fit and are well aligned with our research strategy. And as we identify those, you can expect us to continue to be disciplined and move quickly when we see an opportunity.
Thanks Kash.
Okay.
Our next question comes from Phil Nadir with Cowen and company. Your line is open.
Operator: Our next question comes from Phil Nader with Cohen & Company. Your line is open.
Good evening, thanks for taking our questions.
Two from US if that's okay. One commercial one pipeline on the commercial the growth quarter over quarter was pretty impressive could you give us some sense of where you think you are penetrating the six to 11 year olds in the U S. And then those ex U S markets for you highlighted like France, Italy.
Phil Nadeau: Good evening. Thanks for taking our questions. Two from us, if that's okay.
Phil Nadeau: One commercial ship, one pipeline. On the commercial side, the growth quarter over quarter was pretty impressive. Could you give us some sense of where you think you are in penetrating the 6 to 11-year-olds in the U.S. and then those ex-U.S. markets that you highlighted, like France, Italy, and Canada, and whether the type of growth that we've seen this quarter could continue into future quarters? And then second, on the pipeline in FSGS, as the data approaches, we're just curious to hear your most recent thoughts on what would be proof of concept for the molecule and what gives you confidence to go from the narrow FSGS population to the broader ApoL1-mediated kidney disease population based on this initial data. Thank you.
In Canada.
And whether the type of growth that we've seen this quarter could continue into future quarters, and then second on the pipeline and F. S. G. S. As the date approaches. We're just curious to hear your most recent thoughts on what would be proof of concept for the molecule and what gives you confidence to go from the narrow F. S. Jewish population to the broader April one mediated kidney.
As these population.
Based on this initial data thank you.
Yeah, Hey, good afternoon, Phil I'm going to ask Stuart to comment on the question around.
C F and how we see growth and then I'll come back and tell you a little bit more about the F S. Jeff program Stuart.
Hey, Phil Yeah. Thanks, very much for the question and Yamana honestly proud of our execution in this third quarter that led to the results that you commented on and lead us to increasing our revenue guidance today.
Reshma Kewalramani: Hey, good afternoon, Phil. I'm going to ask Stuart to comment on the question about CF and how we see growth, and then I'll come back and tell you a little bit more about the FSGS program.
It's hard to comment specifically on kind of quarter on quarter, what our growth rate's going to be but I'll give you a sense for where we are in our overall growth trajectory.
Stuart A. Arbuckle: Hey, Phil. Yeah, thanks very much for the question. And yeah, I'm enormously proud of our execution in this third quarter that led to the results that you commented on and led us to increasing our revenue guidance today. It's hard to comment specifically on, kind of, quarter on quarter, what a growth rate is going to be, but I'll give you a sense for, you know, where we are in our overall growth trajectory.
You said, we got the approval for the six to 11 year olds with Tri catheter in June so just prior to this quarter. Starting we also secured new reimbursement agreements in important markets like Italy, and France and also most recently in Canada.
The launches there are underway what I can tell you is that the level of enthusiasm.
Stuart A. Arbuckle: As you said, we got approval for the six to 11-year-olds for Trikafta in June. So, just prior to this quarter starting, we also secured new reimbursement agreements in important markets like Italy and France and also, most recently, in Canada, and launches there are underway. What I can tell you is that the level of enthusiasm for the six to 11-year-old Trikafta here in the US and overseas for Kaftrio is exceptionally high, in line with that we've seen in every other market where we've launched Trikafta Kaftrio. So those launches are off to a strong start. Obviously, we're in the first few months of those launches.
Z as of and for the six to 11 year old try capture here in the U S and and overseas Attrite half trio is exceptionally high in line with that what we've seen in every other market, where we've launched Troy catheter cafeteria. So those launches are off to a strong start obviously what were in the first few months of those launches. So looking ahead.
Had you know what do I see you know despite the fact that we've had really successful launches for Trichopteran Caf trio, we're still actually own each region today about half of all the patients with CF, who could benefit from our medicines overall and specifically for see FTR modulators, there's about 30000.
Patients yet to go in terms of patients who could benefit from our medicines.
Now you might ask yourself, who are those patients while those patients or patients in countries, where we have reimbursement where we're early in the launch sequence. Some of the markets. I. Just described they are in countries, where we have regulatory approvals with most of the world now, but where we have yet to secure reimbursement agreements and they are in younger age groups, obviously six to 11 year olds.
Stuart A. Arbuckle: So looking ahead, you know, despite the fact that we've had really successful launches for Trikafta and Caftrio, we're still actually only treating today about half of all the patients with CF who could benefit from our medicines overall. And specifically for CFTR modulators, there are about 30,000 patients yet to go in terms of patients who could benefit from our medicines. Now, you might ask yourself, who are those patients?
Outside the U S. We don't yet have an approval and also we're going to be pursuing approvals for tri CAFTA capture you're down to even younger age groups as we have done with Kalydeco and.
<unk> can be so given our track record in securing approvals getting reimbursement and successfully launching I have no doubt that we're going to get to the vast majority of those 30000 patients over the coming years, and so I see substantial growth for our CF franchise between now and the middle of the next decade, and then as we announced today we've also.
Stuart A. Arbuckle: Well, those patients are patients in countries where we have reimbursement, where we're early in the launch sequence, some of the markets I just described. They're in countries where we have regulatory approvals, in most of the world now, but where we have yet to secure reimbursement agreements. And they're in younger age groups, obviously, six to 11-year-olds outside the US where we don't yet have an approval.
<unk> made great progress with our mrna program, which has the prospect of developing a medicine ball, the 10% or so of patients who don't respond to see FTR modulators. So I think we've got substantial growth runway yet to go in CF and restaurant back to you.
Stuart A. Arbuckle: And also, we're going to be pursuing approvals for TRICAF, and CAPTRIO down to even younger age groups, as we have done with Kalydeco and CAMBI. So given our track record of securing approvals, getting reimbursement, and successfully launching, I have no doubt that we're going to get to the vast majority of those 30,000 patients over the coming years. And so I see substantial growth for our CF franchise between now and the middle of the next decade.
Still on the question of the VX 147 program.
So on that one I have high confidence in the phase II proof of concept study in and I say that for really three reasons. The first is the human genetics for April one mediated kidney disease are strong in fact theyre very strong.
People, who have kidney disease, who have proteinuria have two April L. One allele.
Stuart A. Arbuckle: And then, as we announced today, we've also made great progress with our mRNA program, which has the prospect of developing a medicine for the 10% or so of patients who don't respond to CFDR modulators. So I think we've got substantial growth runway yet to go in CF. And Reshma, back to you.
They have universally poor outcomes and the target there for us is really exceptionally well validated the second is our in vitro and in vivo studies, we've done a portfolio of studies in vitro as well as in animal studies, we find good potent.
Reshma Kewalramani: Phil, on the question of the VX147 program, OK, so on that one, I have high confidence in the Phase 2 proof of concept study, and I say that for really three reasons. The first is that the human genetics for ApoL1-mediated kidney disease are strong. In fact, they're very strong.
See good selectivity and really strong reductions in proteinuria and the third is that VX 147, as all of the drug like properties that we seek.
As a nephrologist I find this opportunity really.
Very exciting for the following reason so in phase two we're studying April one mediated F. S. T S.
Reshma Kewalramani: People who have kidney disease, who have proteinuria, have two ApoL1 alleles; they have universally poor outcomes. And the target, therefore, is really exceptionally well validated. The second is our in vitro and in vivo studies. We've done a portfolio of studies in vitro, as well as in animal studies. And the third reason is that VX147 has all of the drug-like properties that we seek.
That is one that kind of April one mediated kidney disease, it's a very aggressive form of renal disease about 10000 people who have that.
But April L. One mediated.
Eric Let's say primary partner kidney disease, I know its a mouthful, that's about 100000 people who have that.
If the phase two study is positive in F. S. Yet what that really tells you is that we have now for the first time found a small molecule that interdictes on April one and Ken.
Reshma Kewalramani: As a nephrologist, I find this opportunity really very exciting for the following reasons. So in phase two, we're studying ApoL1-mediated FSGS. That is one kind of ApoL1-mediated kidney disease. It's a very aggressive form of renal disease. About 10,000 people who have it.
Teng surely be a therapy for the broad F. S. G at not only at best yet, but the broad a MKT market.
Reshma Kewalramani: But ApoL1-mediated proteinuric, let's say primary proteinuric kidney disease, I know it's a mouthful, there are about 100,000 people who have that. And if the phase two study is positive in FSGS, what that really tells you is that we have now for the first time found a small molecule that interferes with ApoL1 and can potentially be a therapy for the broad FSGS market, not So the full 100,000. And then, with regard to what would we consider successful?
So the full 100000.
And then with regard to what would we consider successful.
So the phase two studies in F. S. G S right and the entry criteria is such that it's a very severe population. It's April one mediated at best yet with a high burden of proof noria and we allow stable doses of standard of care therapy. So these patients are already on Ace is arbs.
Immunosuppressive and steroids, so in that kind of patient population with an aggressive disease with high levels of proteinuria already in standard of care double digit improvements in proteinuria that would be impressive now of course higher is better but double digit improvements in proteinuria.
Reshma Kewalramani: Okay, so the phase two study is in FSGS, right? And the entry criteria are such that it's a very severe population. It's APOL1-mediated FSGS with a high burden of pertinuria, and we allow stable doses of standard of care therapy. So these patients are already on ACEs, ARBs, immunosuppressives, and steroids. So in that kind of patient population with an aggressive disease, with high levels of pertinuria, already in standard of care, double-digit improvements in pertinuria that would be impressive. Now, of course, higher is better, but double-digit improvements in pertinuria would not only be important, it would be something that we've not seen before.
That would not only be important it would be something that we've not seen before.
That's perfect. Thanks for taking my questions.
Yeah Yeah.
Our next question comes from Brian Abrahams with RBC capital Your line is open.
Hey, guys congrats on the quarter and thanks for taking my questions.
Would love to hear more about the mrna program.
And I guess I'm curious, how translatable nonhuman primate lungs are two human CF lungs, especially given the I guess the mucus layer.
Operator: That's perfect. Thanks for taking our questions.
Brian Abrahams: Our next question comes from Brian Abrahams with RBC Capital. Your line is open.
You have any sense of what the I guess the half life for the resident time in the lung would be in terms of what type of frequency of administration, one might look at or a general range and might you see any opportunity down the line for this to be usable perhaps in combination for the other 90% of patients who don't have nonsense mutations.
Brian Abrahams: Hey guys, congrats on the quarter and thanks for taking my questions. We'd love to learn more about the mRNA program, and I guess I'm curious how translatable non-human primate lungs are to human CF lungs, especially given the, I guess, the mucous layer. Do you have any sense of what the, I guess, the half-life or the resident time in the lung would be in terms of what type of frequency of administration one might look at or a general range? And might you see any opportunity down the line for this to be usable perhaps in combination for the other 90% of patients who don't have non-sentence mutations but have CF? Thanks. Hey, Brian, a really important question.
But woods here thanks.
Yeah.
Brian really important questions on the mrna program and there's a few different questions in there. So let me parse it out there's a question in there about.
The Joe's targeting it to the right cells and how translatable. The model is and then there's another question in there about how do we think about the 90%.
Reshma Kewalramani: Hey Brian, really important questions on the mRNA program, and there are a few different questions in there, so let me parse it out. There are questions about the dose, targeting it to the right cells, and how translatable the model is. And then there's another question in there about how we think about the 90%. Okay, so I'm going to be circumspect with my comments. The insights are commercially sensitive, but here's what I can tell you.
Okay. So.
I'm gonna be circumspect with my comments.
The insights are.
Commercially sensitive, but here's what I can tell you.
We have been very very diligent and deliberate about dose and making sure that the mrna transcript and protein expression.
Are in the right cells.
I would say that in in drug development in this area. That's the most important part that many others have had not gotten right and that's specifically why I talked about the H B E assays in vitro and the small and large animal studies and the targeting of the mrna construct to the relevant cells, which.
Reshma Kewalramani: We have been very, very diligent and deliberate about dose and making sure that the mRNA transcript and protein expression are in the right cell. I would say that in drug development in this area, that's the most important part that many others have not gotten right. And that's specifically why I talked about the HPE assays in vitro and the small and large animal studies and the targeting of the mRNA construct to the relevant cells, which are the bronchial epithelial cells.
Are the bronchial epithelial cells.
And I feel very good about that dose selection about the schedule of dosing and the targeting to the appropriate cells.
Reshma Kewalramani: And I feel very good about the dose selection, about the schedule of dosing, and about the targeting to the appropriate cells. Now, with regard to the question about whether this could be extended to the other 90 percent, I would actually look at it the other way. CF is a systemic disease. It's not only a lung disease.
Now with regard to the question about down the line do we think this could be extended to the other 90%.
Would actually look at it the other way.
CF is a systemic disease, it's not only a lung disease and so the real value of small molecule correction of the C. F. T. Our protein is that you get systemic benefit.
Reshma Kewalramani: And so the real value of small molecule correction of the CFTR protein is that you get systemic benefit. So in the setting of the last 10%, what I would contemplate is if we are successful with our mRNA program when we're in the clinic next year, combining the mRNA with a small molecule. We're obviously the only ones who could do that, and I think the opportunity to bring benefits to the last 10% is therefore tremendous.
So in the setting of the last 10% and what I would contemplate is if our we are successful with our MLR I'm RNA program. When we are in the clinic next year, it's combining the mrna with the small molecule. We're obviously the only ones who could do that and I think the opportunity to bring.
To the last 10% is therefore tremendous.
Thanks, so much freshmen.
Operator: Our next question comes from Robyn Karnauskas with Truist Securities. Your line is open.
Our next question comes from Robyn are Nascar's with tourist security Your line is open.
Robyn Karnauskas: So, two quick ones. So, for patients on Tricaf, you showed that great data showing lung stability. In the real world, what percentage of the population would benefit from, you think, the new drugs that you're developing, meaning that their sweat chloride levels are below the normal range, and you might be able to put them into that bucket?
Great. Thanks for taking my question. So two quick one so for a patient centric Kathy said that great data showing long stability in the real world what percentage of the population would benefit from you think the new drugs that are developing meaning that their sweat chloride levels are below normal.
Robyn Karnauskas: The second question I've had is, for your device for diabetes, how does the device, I know that you've
Gil to put them into that bucket and second question I've had for the ear device for for diabetes.
Robyn Karnauskas: How does the device, I know that you've talked about how getting the cells in, they go to the liver, and then blood vessels form, and that's how they interact with the liver to function. How does the device not only protect the cells from being attacked by the immune system but also allow them to interact with blood vessels to work and function? How does it work? So I was just wondering if it might not be able to interact with the blood vessels because it's in a device. Thank you. Yeah, yeah.
The device it know that you've talked about how getting the cells. Then they go to the liver and then blood vessels for them, that's how they interact with deliver until.
The function.
How does the device.
Not only protect the cells from being attacked by the immune system, but also allow them to have the interaction with blood vessels to.
To work and function.
How does it work. So I was just wondering if it might not be able to interact with the blood vessels because it's in a debate. Thank you.
Yep Yep.
Reshma Kewalramani: There are two different questions in there, Robyn, one about type 1 diabetes and the device, and then a separate question about how we think about VX121561TEZ, and maybe I'll expand that to the next generation of CFTR modulators. Let's do CF first, and then we'll do type 1 diabetes next. So, Robyn, you know this, the Tricaster-Caftreo medicine can treat up to 90% of people with CF, and it has really extraordinary efficacy.
There are two different questions in there Robin one about type one diabetes and the device and then a separate question about how we think about VX, one to 1561 pads and maybe I'll expand that to the next next generation of our CF GR modulators, let's do C F.
First and then well, let's do a type one diabetes next.
So Robin you know this.
E Trikes Caf trio, a medicine can treat up to 90% of people with CF and it has really extraordinary efficacy and what we see is that large numbers of patients as you saw in the clinical trials program get benefit in the double digit improvements in P. P. F E V. One significant.
Reshma Kewalramani: And what we see is that large numbers of patients, as you saw in the clinical trials program, get benefit from the double-digit improvements in PPFEV1, significant improvements in sweat chloride, weight, and quality of life. Now, what we are trying to do in our long-term goal is to get all CF patients to carrier levels of sweat chloride. And the reason we want to do that is because carriers really manifest almost no disease.
Improvements in sweat chloride in weight in quality of life.
Now what we are trying to do in our long term goal is to get all CF patients to carrier levels of sweat chloride and the reason we want to do that is because carriers really manifest almost no disease and what I can tell you is one to 1561 test in our preclinical experiments in these H.
Reshma Kewalramani: And what I can tell you is that in our preclinical experiments in these HPE cells that have this quantitative and quantitative relationship to what we see in the clinic, the 1, 2, 1, 5, 6, 1 test has the potential to be even better than tricacta on that dimension. But we've already identified another generation of molecules that, in our HPE assays, look like they're going to get us to that ultimate goal of getting all patients with CF, the 90%, to carrier level.
He felt that have this quantitative and quantitative relationship to what we see in the clinic. The one to one Taz 561 has the potential to be even better than I tried capped on that dimension, but we've already identified.
Another generation of molecules that in our H B assays look like they're going to get us to that ultimate goal of getting all patients with CF that 90%.
Reshma Kewalramani: With regard to the device program, I'll ask Bastiana to comment, but here's an important thumbnail sketch of the field and what the real breakthrough that we have made. The problem with devices historically has been foreign body reactions or fibrosis. And the second challenge with devices has been vascularization. Both of those challenges are what we tackled with our program and what we do not see with our device. So what we do not see is fibrosis or foreign body reaction, and what we do see is really excellent vascularization. I'll ask Bassiano to comment about the materials and the geometry and the configuration of the device that allows us to have the kind of effects that we have. Bassiano. Thanks, Reshma.
To carrier levels.
With regard to the device program I'll ask bastian at to comment, but here's the important a thumbnail sketch.
Catch of the field and what the real breakthrough that we have made.
The problem with device X.
Historically has been foreign body reactions or fibrosis, and the second challenge with devices has been vascularization.
Most of those challenges are what we tackled with our program and what we do not see with our device. So what we do not see is fibrosis, a foreign body reaction and what we do see is really excellent vascularization.
Bastian had a comment about the materials and the geometry and the configuration of the device that allows us to have the kind of effect that we have casiano, thanks restaurant and Robyn I just want to maybe start two week, making clear that these are completely novel device.
Bastian Osana: Thanks Reshma, and Robyn. I just want to maybe start by making clear that this is a completely novel device that is made with different materials, different geometry, and different configuration from everything else that has been described by others in the field. It was specifically designed, rationally designed, to exactly address the causes of failure in the field of encapsulation, which is foreign body response and vascularization. It's called a channel array device for that particular reason.
That is made with different materials different Jerome at three different configuration from everything goes that does being described by others in the field. It will specifically desire vaccine desired to exactly address that causes of failure in the field of encapsulation reputation has said we choose.
Portland Bothering us pause.
Bastian Osana: Its purpose was designed to really minimize fibrosis and to allow the device to integrate in the body, allow vascular beds to form throughout the device, on top and the bottom, so the cells are always optimally distanced from a source of oxygen and nutrients, allowing for insulin and glucose, of course, to be exchanged. This is completely different from what we think was in the field. And we have evidence in our preclinical models that we do not see foreign body response. Instead, we see robust neovascularization. We see rapid insulin responsiveness and immune protection, even in immunocompetent animals.
And the boss causation is called China as a device for that particular reason is proposed design to really minimize fibrosis and to allow the device to integrate in that in the body allow bus cooler.
Beds to form throughout the device on top and the bulk of them. So this shows that always opportunity this dose to a source of oxygen and nutrients, allowing for insulin and glucose of course to be exchange is completely different from what it was in the field and we have eight of them.
In our preclinical models that with mostly funded by the response, we see his robe robust neovascular position. We see is after the incident responsiveness and immune protection, even in immuno competent animals.
Operator: Our next question comes from Liisa Bayko with Evercore ISI. Your line is open.
Great. Thank you.
Our next question comes from Lisa <unk> with Evercore ISI. Your line is open.
Liisa Bayko: Hi, thanks for taking the question. I wanted to ask about CTX-001. So when you file at the end of next year, can you talk about sort of how much data and follow-up data you'll have on how many patients? And then I also wanted to ask just a commercial question, as you're doing a lot of your commercial prep, can you maybe describe like what the What, how many patients per year could be treated in the U.S.? You know?
Hi, Thanks for taking the question I wanted to ask about CTX Oh, one so when you when.
When you file at the end of next year can you talk about sort of how much data and follow up data you'll have on how many patients.
And then I also want to ask just a commercial question as Youre doing.
A lot of your commercial crap can you maybe describe like what the.
Liisa Bayko: In kind of given that, you know, hospital environments and all that kind of stuff. So how should we think about kind of what at the time of launch, what that will look like, and then, you know, how that may evolve over time? Thank you. Lisa, I think you're asking about how we see the commercial launch for CTX001. Yeah, I kind of wanted to know like what the throughput of patients, like in terms of capacity. Transcription by Transcription Outsourcing, LLC.
What how many patients per year can be treated in the U S.
No.
In in kind of given that you know a hospital environment and all that kind of stuff. So how should we think about kind of one at a time of launch.
What what that will look like and then how that may evolve over time. Thank you.
At least I think you're asking about how we see commercial launch for CTX Sears or a one.
Yeah, I kind of wanted to know like what the throughput of patients like capacity wise.
Is there some upper limit on that that we should think about.
You know as we think about the population is quite a bit population in fact.
Don't understand what the capacity is in the United States at least then and how you think that may evolve over time, but from.
Stuart A. Arbuckle: Yeah, yeah, sure thing. Let me ask Stuart to comment on how we see the CTX-001 launch and the launch dynamics, taking into account questions specifically about whether there are capacity constraints and such. And I'll come back and tell you a little bit more about how we see the filing. Stuart? Yeah, thanks.
From the onset you know what what that would look like.
Yeah sure thing let me.
Stewart to comment on how we see the CTX years, one launch and the launch dynamics taking into a question specifically about whether there are capacity constraints and such and I'll come back and tell you a little bit more about how we see the filing Stuart.
Stuart A. Arbuckle: Yeah, thanks Liisa for the question. So I'm going to start at the highest level with the overall opportunity, and then I'll get to your question about the kind of launch dynamics or our views on them at this kind of early stage. So, in terms of people who have severe sickle cell disease and beta thalassemia, between the U.S. and the E.U., we think there are about 32,000, we estimate, patients who have severe disease in both of those in the combined populations of sickle cell and beta thalassemia.
Yes, Thanks, Lisa for the question. So let me start at the highest level with the overall opportunity and then I'll get to your question about the Canada launch dynamics or our views on them at this kind of early.
Early stage so in terms of people, who have severe sickle cell disease and beta thalassemia between the U S and the EU. We think there's about 32000, we estimate patients who have severe disease and in both of those are in the combined populations of sickle cell and beta thalassemia and sickle cell.
Stuart A. Arbuckle: In sickle cell, it's about 25,000, and because of the nature of the disease, the vast majority of those are in the United States. And that number is kind of validated by external physician surveys, which would indicate that they would treat between 25% and a third of all of their sickle cell disease patients with a one-time curative approach using the existing conditioning regimens. So we think that's about the order of magnitude of patients who might be eligible for this initial phase of a gene-editing curative treatment. In terms of launch dynamics, it's really going to be a function of probably four things.
It's about 25000 and because of the nature of the disease. The vast majority of those are in the United States and that number is is kind of the validated by external physician surveys, which would indicate that.
They think they would they would treat between 25% and a third of all of the sickle cell disease patients with a onetime curative approach with the existing conditioning regimens. So we think that's about the order of magnitude of patients who might be eligible for this initial phase of a gene editing purity.
Treatment.
Stuart A. Arbuckle: The first one is sort of physician and patient interest in the technology, and based on the results that we've seen to date and the enthusiasm that we've seen in the field, particularly as it translates into interest in our clinical trials, we expect the enthusiasm from the community to be high. On the other end, it's going to be a function of our ability to manufacture, and as you can imagine, we're working diligently on our manufacturing processes to make sure that we have the capacity to treat patients.
In terms of launch dynamics is really going be a function of probably four things.
The first one is sort of physician and patient interest.
In the technology and based on the results that we've seen to date and enthusiasm we've seen in the field, particularly as it translates into interest in our clinical trials, we expect the enthusiasm from the community to be high.
The other end, it's going to be a function of our ability to manufacture and as you can imagine we're working diligently on our manufacturing processes to make sure that we have capacity to to treat patients.
Stuart A. Arbuckle: But the bottleneck is likely to be in treatment centers, and as you know, the treatment is going to be administered in transplant centers. There are a limited number of those in the U.S., and they also have competing priorities with malignant hematology conditions. And so that is likely to be the rate-limiting step. So we're obviously in the initial stages of evaluating those treatment centers and working with them. Again, we do think that enthusiasm to treat these patients is going to be high given the very significant unmet need for sickle cell disease and thalassemia and the outstanding results we've seen to date.
But the bottleneck is likely to be in treatment centers are and as you know the treatment is going to be administered in in transplant centers. There's a limited number of those in the U S and they also have a competing priorities with malignant.
Malignant hematology conditions, and so that is likely to be the are the rate limiting step. We're obviously in the initial frozen all evaluating those treatment centers and working with them again.
We do think that enthusiasm to treat these patients is going to be high given the very significant unmet need in sickle cell disease, and thalassemia and the outstanding results. We've seen to date, so without commenting specifically because I wouldn't know the exact answer to that at this early stage. Lee said those are likely to be some of the the pinch points as it were.
Stuart A. Arbuckle: So without commenting specifically, because I wouldn't know the exact answer to that at this early stage, Lisa, those are likely to be some of the pinch points, as it were, in terms of the launch dynamics. What I can tell you, though, is we are expecting demand to be very, very substantial amongst those 32,000 patients given the unmet need and the results we've seen.
In terms of the launch dynamics, what I can tell you. Though is we are expecting demand to be very very substantial amongst those 32000 patients given the unmet need and the results we've seen.
Reshma Kewalramani: On the question of where we are with our filing and how we are thinking about the size, the data set size, I'll just step back for one moment to remind you that we have had the benefit of having virtually every regulatory designation known both here and in the EU with RMAT, ORFIN, and PRIME. That allowed us to have a number of engagements with the agency and to be able to address a number of their questions.
Okay.
Question on <unk>.
Where are we with our our filing and how are we thinking about the size the dataset size.
I'll just step back for one moment to remind that we have had the benefit of having virtually every regulatory designation known both here and in the EU with our mat and orphan and Prime that's allowed us to have a number of engagements with the agency and to be able to address a number of their questions.
Reshma Kewalramani: We're really at the tail end of those conversations, and the two areas on which we're wrapping up our discussions are one, what is the sample size that they will require, and two, what is the duration of follow-up. I expect we're going to finish those discussions in the next couple of months, and I do expect that the filing will go in towards the tail end of next year.
We're really at the tail end of those conversations and are the two areas are on which we're wrapping up our discussions are one what is the are the sample size that is that they will require and chew. What's the duration of follow up I expect we're going to finish those discussions in the next couple of months.
And I do expect that the filing will go in towards the tail end of next year.
Operator: Operator, we'll take two more questions.
Okay. Thanks.
Geoffrey Christopher Meacham: Okay, our next question comes from Corey Kasimov of J.P. Morgan. Your line is open.
Operator, we'll take two more questions.
Geoffrey Christopher Meacham: Hey, thanks. Good afternoon, guys.
Okay. Our next question comes from Cory Castle of J P. Morgan Your line is open.
Geoffrey Christopher Meacham: I wanted to follow up as well on CTX001. And just to piggyback on the filing, I recognize we should get more clarity in the coming months, but can you talk about your comfort level on the regulatory front when it comes to addressing any CMC requirements? We see, you know, frequent delays there with regard to cell and gene therapies. And then also you speak about the 32,000 patients between the U.S. and Europe.
Hey, Thanks, Good afternoon, guys I wanted to follow up as well on CTX 001, and just to piggyback on the filing I recognize we should get more clarity in the coming months, but can you talk about your comfort level on the regulatory front when it comes to addressing any CMC requirements, we see.
When we see delays there with regards to cell and gene therapies and then also you.
Geoffrey Christopher Meacham: Wanted to ask about your comfort level with Europe as we recently saw Bluebird back out of that market with lentiglobin for beta-thal based on the fact that they couldn't come to agreement on pricing. So your comfort level that you can get around this. Thank you.
Speak about the 32000 patients between the U S and Europe wanted to ask about your comfort level with Europe. As we recently saw Bluebird back out of that market with Lenke globin for beta Thal based on the fact that they couldn't come to agreement on pricing. So your comfort level that you can get around us. Thank you.
Reshma Kewalramani: Hey, Kurt, let me start by telling you a little bit more about the regulatory process and comment a little bit more on manufacturing, which is your specific question. And then I'll ask Altshuler to comment on Europe.
Got it.
Let me start with telling you a little bit more about the regulatory process.
A little bit more on the fab.
Factoring which is.
Your specific question and then.
Reshma Kewalramani: Obviously, we have the opportunity, not only in Europe, but we have the opportunity, certainly including Europe, to lead from the front with our CTX Bureau 01 for both beta-thalassemia and cyclical disease. Okay, on the regulatory filing. Because of these designations, we've had the benefit of multiple conversations with the agency and, as I said earlier, been able to address most of their questions. And we're really now wrapping up conversations around two clinical points, which are how big is the database? And what's the duration of follow-up.
Comment on Europe, obviously.
We are we have that opportunity.
Not only in Europe.
Certainly including Europe.
And with our CTX fears here for both.
Beta thalassemia and sickle cell disease.
Okay.
The regulatory filings.
Because of these designations.
The bad news at multiple.
Conversations with the agency in as I said earlier been able to address most of their questions and we're really now wrapping up conversations around two clinical points, which is how big is the database and what's the duration of follow up.
Reshma Kewalramani: On the manufacturing side, we are using the same processes and, actually, the same sites as we did for the clinical trials for the commercial products. And in the grand scheme of things, when you think about what we are doing with CTX001, it's ex vivo gene editing. And really, it's the Cas enzyme and the guide RNA. And in the grand scheme of things, that's just simply an easier manufacturing situation than other manufacturing challenges.
On the manufacturing side.
We are using the same processes and actually the same sites as we did for the clinical trials for the commercial product.
And in the Grand scheme of things when you think about what we're doing with CTX. Here's your one it's ex vivo gene editing and really it's the task enzyme and the guide RNA and in the Grand scheme of things, that's just simply and easier manufacturing.
Reshma Kewalramani: So I feel very good about our conversations with the agency. We've been able to mitigate risk by addressing their questions along the way. And we are using the same processes and the same sites that we used in the clinical trials for the commercial product. Stuart, a couple of comments maybe from you about Europe and CTX-001. Yeah, Cori, thanks for the question. You know, I feel very
Situation than other manufacturing challenges.
Challenges, so I feel very good about.
Our conversations with the agency, we've been able to derisk by addressing their questions along the way and we are using the same processes. The same sites that we used in the clinical trials for the commercial product Stuart a couple of comments, maybe from you about Europe and CTX hairs here.
Stuart A. Arbuckle: Yeah, Corey, thanks for the question. You know, I feel very confident in the team that we have on the ground in Europe and their ability to secure reimbursement and access for patients who have rare diseases to transformative medicines like this. I think they've got a demonstrated capability to capture and describe the unmet need in these types of conditions, to gather and generate evidence on the both economic and clinical benefits of our medicines, translate those into value propositions that make sense to payers, and then work creatively with payers to develop bespoke solutions country by country to secure reimbursement and access for our medicines. I think we've demonstrated that very, very successfully in CF, and I'm looking forward to us being able to use those same capabilities to get access for patients with sickle cell disease and beta thalassemia in Europe.
Yeah Cory Thanks for the question you know I feel very confident in the team that we have on the ground in Europe and their ability to secure reimbursement and access for patients who have rare diseases, but transformative medicines lightless I think they've got a demonstrated capability to capture and describe the.
Unmet need in these types of conditions do you.
Gather and generate evidence on the both economic and clinical benefits of our medicines translate those into value propositions, which makes sense to payers and then work creatively with payers to develop bespoke solutions country by country to secure reimbursement and access for our medicines I think we've demonstrated that.
A very very successfully in CF and I'm looking forward to us being able to use those same capabilities to get access for patients with sickle cell disease and beta thalassemia in Europe.
Operator: Our next question comes from Geoff Meacham with Bank of America. Your line is open.
Great. Thank you guys.
Our next question comes from Geoff Meacham with Bank of America. Your line is open.
Geoff Meacham: First, can you give us a better sense for when we might start to see those Phase III data, now that both of those trials are up and running, and whether there could be an opportunity for an earlier look at one or maybe both of those trials as we get into next year? And then I know you guys have talked about moving forward even more NextGen triplets at some point. So are there specific areas where you're maybe more focused when you think about the optimization or differentiation of those newer assets? And just as a follow-up to that, could there be some potential ways to accelerate development timelines once those agents move into clinics? Yeah, hey, good.
Hi, guys. This is Olivia brayer on for Jeff. Thanks for the questions I've got two follow ups on the Nextgen. A triplet program first is can you give us a better sense for when we might start to see those phase III data in that now that both of those trials are up and running and whether there could be an opportunity for an earlier look at one or maybe both of those trials as we get into next year.
And then I know you guys have talked about moving forward even more next gen triple it at some point.
So are there specific areas, where you're maybe more focused on when you think about the optimization or or differentiation of those newer assets.
And just as a follow up to that could there be some potential ways to accelerate development timelines once once those agents moving to the clinic.
Reshma Kewalramani: Yeah, hey, good afternoon. With regard to your questions, which really center around the next wave, whether it's 1, 2, 1, 5, 6, 1, tezacaptor, which is already in the clinic in phase three clinical trials, or the molecules that we've identified in San Diego that are going to be coming into the clinic. How are we thinking about this? How quickly can we go? What's the overall goal?
Yeah, Hey, good afternoon.
With regard to.
Your questions, which really center around the next wave whether its one to 1561 peasant chapter which is already in the clinic in phase III clinical trials or the molecules that we've identified.
In San Diego that are going to be coming into the clinic. How are we thinking about this how quickly can we go what's the overall goal so to be clear. The goal here is to bring all patients with cystic fibrosis to carrier levels of sweat chloride that is our long stated goal and that is what.
Reshma Kewalramani: So to be clear, the goal here is to bring all patients with cystic fibrosis to carrier levels of sweat chloride. That is our long-stated goal, and that is what we are aiming for. And I feel really good about where we are with 1, 2, 1, 5, 6, 1, tez, based on the preclinical results that I shared and the phase two results that we shared earlier this year. And the next wave of molecules looks like they can be even better.
We are aiming for.
And I feel really good about where we are with one to 1561 test based on the preclinical results that I shared and the phase II results that we shared earlier this year and the next wave of molecules look like they can be even better. So we are well on our path to bringing forward therapies that can bring.
Reshma Kewalramani: So we are well on our path to bringing forward therapies that can bring all CF patients to carrier levels of sweat chloride. With regard to speed and how fast we can go, I don't think that anybody can go faster than us in cystic fibrosis for a couple of reasons.
All CF patients to carrier levels of sweat chloride with regard to speed and how fast can we go right I don't think that.
Reshma Kewalramani: One, we've already demonstrated that we can do this very quickly. In Tricasta, we went from the bench, so the first synthesis of the molecule, to U.S. approval in less than four years. Outside of oncology, it's one of the fastest drug development programs ever. The second reason I say that we do this really fast is that we have a lot of experience with this, right? We've already done it with four medicines on the market, the fifth one being 1,2,1 Tez, 5,6,1.
Anybody.
Can go faster than us in cystic fibrosis for a couple of reasons. One we've already demonstrated that we can do this very quickly in tried Casco. We went from the bench. So first synthesis of the molecule to U S approval in less than four years outside of oncology.
It's one of the fastest drug development programs ever.
The second reason I say that we do this really fast as we have a lot of experience in this right. We've already done it with four medicines on the market the fifth one being one one taz.
Reshma Kewalramani: And with regard to when we should expect results from such trials, remember the trials for Trikafta we enrolled in about six months. So that's a benchmark for the last set of clinical trials we did. I expect us to continue to use what we know and our experience to move fast with 1,2,1, 5,6,1 Tez and the molecules behind that.
561, and with regard to what should we expect results in such remember the trials for Tri CAFTA, we enrolled in about six months. So that's the benchmark for the last set of clinical trials. We did I expect this to continue.
To use the what we know and our experience to move fast with one to 1561 test and the molecules behind that.
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