Q2 2023 Vertex Pharmaceuticals Inc Earnings Call
Good afternoon, and welcome to the vertex Pharmaceuticals second quarter 2023 earnings conference call.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Please note this event is being recorded.
I would now like to turn the conference over to Susie Lisa Senior Vice President Investor Relations. Please go ahead.
Good evening, everyone. My name is Susie Lisa and as the senior Vice President of Investor Relations. It is my pleasure to welcome you to our second quarter 2023 financial results conference call on Tonight's call, making prepared remarks, we have Dr. Ray Smith came out of her money for Texas, CEO and President Stuart Arbuckle, Chief operating Officer, and Charlie Wagner Chief Financial Officer.
We recommend that you access the webcast slides as you listen to this call. The call is being recorded and a replay will be available on our website.
We will make forward looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission. These statements, including without limitation. Those regarding vertex is marketed cystic fibrosis medicines, our pipeline and Bert Texas future financial performance.
Based on management's current assumptions actual outcomes and events could differ materially.
Also note that select financial results and guidance that we will review on the call. This evening are presented on a non-GAAP basis. In addition, the impact of foreign exchange is presented inclusive of a foreign exchange risk management program I'll now turn the call over to very small.
Thanks, Susie good evening, all and thank you for joining us on the call today. After a strong start to the year. We saw continued momentum into the second quarter across all aspects of the company. Our CF business continues to grow and we are reaching more patients than ever in the second quarter. This.
Banded reach drove 14% global CF product revenue growth versus the prior year period and with this first half performance. We are raising our full year 2023 CF product revenue guidance to a revised range of 9.7 to nine 8 billion.
As we continue to deliver in CF. We're also investing for future commercial excellence ahead of multiple potential near term launches.
In extra felt in both severe sickle cell disease, and transfusion dependent beta thalassemia, which we expect will be the first in our next wave of launches in VX five foray for acute pain. Another multibillion dollar commercial opportunity and in our vans, a captain triple combination therapy for cystic fibrosis, which provides the <unk>.
Opportunity to further extend our leadership in CF.
In addition to these four disease areas are mid stage clinical pipeline continues to develop rapidly and marked progress towards our five launches in five years GUL. Recent achievements include the VX 147, or an ACA plan pivotal trial remains on track to complete the phase two b portion of the stack.
By the end of this year in our type one diabetes program. Both VX 880, the naked cells and VX two six for the South post device programs are now in the clinic and dosing patients. Additionally, we announced the strategic long term manufacturing agreement with loves a four.
Type one diabetes cell therapy programs and finally, an accelerated timeline for the VX 548 phase two study in peripheral neuropathic pain, where we now expect the study to complete by the end of 2020 three.
In total we're advancing programs in eight disease areas through mid and late stage development six of which are now past the proof of concept stage as detailed on slide five.
Beyond our clinical pipeline. We're also advancing the next wave of research stage assets, reflecting program source from both internal and external innovation. This includes programs in Duchenne muscular dystrophy, Myotoxic dystrophy type one the NAV, one seven program for pain and <unk>.
The conditioning agents for use with Axa Sal.
In the CF franchise in R&D and across the business. This quarter vertex has continued to make meaningful advancements to bring our C. F T. Our portfolio to more patients around the globe and bring additional first in class or best in class potentially transformative medicines to mulch.
<unk> new disease areas with that overview I'll turn to the details of recent R&D progress starting with C F.
While track after delivers tremendous benefit for patients if it's possible to do better we're committed to being the ones who do so and that is the goal for a next in class vans. The captor Triple combination therapy I'm pleased to share we expect to complete all three phase III studies.
Skyline 102, and 103 in patients ages, 12 years and above and the Rich line study in patients ages six to 11 by the end of 2023 and release results from these three studies in early 'twenty four.
We have high expectations from the vans the captor Triple program to lead to further improvements in C. F. T. R function based on the totality of the evidence generated to date. The most direct read out of higher C. F. T. R function is chloride transport in vitro and sweat chloride in patients.
In vitro or human bronchial epithelial cell assays with the vans. The captor Triple showed greater restoration of chloride transport than with Tri CAFTA and in phase two in patients the vans the captor Triple clinical studies should correspondingly lower levels of sweat.
Right than in previous studies with Tri CAFTA.
We therefore believe the vans the CAFTA triple has the potential to provide patients with enhanced clinical benefit the convenience of once daily dosing and additionally, the vans a triple carries a substantially lower royalty burden.
Another important program in our CF portfolio is VX five two to our C. F. T. R mrna therapy in development with our partners that Madonna for more than 5000, CF patients who cannot benefit from CF GR modulators. We are enthusiastic for this approach for three key reasons based on what we've achieved to date first.
The delivery of mrna and high efficiency N T. H b cells in vitro second expression of C. F T. Our protein leading to high levels of chloride transport and third successful nebulize delivery of mrna in both small and large animals, resulting in express.
A C F G F protein in the desired cells, we continue to enroll and dose CF patients in the single sending dose or sad study of VX five to two <unk>.
And we expect to complete the sad portion and initiate the multiple ascending dose portion of the study. This year turning now to access South are Christopher cast nine based gene editing program for sickle cell disease, and transfusion dependent beta thalassemia, which targets the most severe patients and an.
The patient population of approximately 32000.
<unk> holds the promise to be a one time functional cure for these diseases.
On the regulatory front the FDA has accepted our filings and granted priority review in sickle cell disease with the December 8th Purdue for date.
Along with the standard review in beta Thalassemia with a March 30th 2024 <unk> date.
The FDA has indicated an advisory committee will be held and we look forward to the opportunity to discuss the high unmet need share results from the extra cell studies and discuss the transformative potential extra sell holds for patients.
Outside the U S in the EU and the U K reviews for our extra self filings are also well underway. Our oral presentation of the most recent E. J meeting in June provided new data that were the basis of the EMA and MH or a regulatory filings both trials met the prime.
Mary and key secondary endpoints with follow up in some patients of more than 36 months. The extra cell E. J results continue to demonstrate transformative consistent and durable benefit for patients as measured by freedom from severe basal occlusive crises for 94% of S. C.
D patients and transfusion independence in 89% of T. D. T patients. The safety profile was generally consistent would be self and conditioning and bone marrow transplantation.
Another significant opportunity for extra salt is in younger patients and the pediatric trials in both sickle cell disease and beta thalassemia are underway, we have enrolled more than half the target number of patients in both pediatric studies and have dosed multiple patients. This is an important area.
Focus given the opportunity to intervene earlier and potentially prevent organ damage and other complications before they ever occur as the Purdue for dates approach in the U S and reviews come to conclusion in the U K and EU, we look forward to bringing this one time potential.
Curative therapy to thousands of patients with severe sickle cell disease, and transfusion dependent beta thalassemia.
Turning next to our pain program, and we X 548, our novel highly selective NAV. One eight inhibitor that holds the promise of effective pain relief without the side effects or addictive properties of opioids.
In acute pain I am pleased to share that all three phase III studies, two randomized controlled trials and the single arms safety and efficacy study will complete by the end of this year with results available in late 2023 or early 'twenty for the pace of this.
Phase III program has been rapid which we see as indicative of the high unmet need and strong interest in an efficacious non opioid acute pain therapy, we have high confidence in the outlook for these phase III studies, given one the genetic and pharmacologic validation of the target.
Two multiple proof of concept trials with the predecessor molecule and what we ex FIFO rate itself and three the similar methodology design and endpoints of our phase three studies compared to the phase II program.
Closing on acute pain recall that the phase III program has been designed to support a broad moderate to severe acute pain label, which would enable prescribing and usage across multiple care settings, including in hospital or the ambulatory surgical center post discharge and in the home.
We are also studying VX 548 in diabetic peripheral neuropathy or D. P. N type of peripheral neuropathic pain that represents yet another significant area of unmet need and another multibillion dollar market opportunity. We've previously delivered positive proof of concept data.
In peripheral neuropathic pain with the predecessor molecule VX 150, the current study in D. P. N with VX 548 is a 12 week phase two dose ranging proof of concept study.
I am pleased to share the timeline for this D. P. N study has accelerated and we have recently completed enrollment. This study will complete by the end of this year and we expect to share results in late 2023 or early 'twenty four.
Moving now to type one diabetes, where we're evaluating stem cell derived fully differentiated insulin producing islet cells for people with type one diabetes. Our goal is to develop a functional cure for the millions of people living with type one diabetes, including the more than $2 5 million patients in North America.
Europe alone.
The VX 880 program is our foundational cell therapy program for T. One day in which we have already demonstrated proof of concept in the VX 880 trial or the naked cell program patients take standard immunosuppressants to protect the islands from the immune system, we presented updated clinical data on parts a N.
B of the study at the recent American Diabetes Association meeting the presentation at the aviation that all six patients treated with VX 880, and grafted islet cells produced endogenous insulin and had improved glycemic control, while reducing or eliminating exogenous insulin use it.
Importantly, the two patients with at least one year follow up so a complete elimination of severe hypoglycemic events maintained hemoglobin, a one six below 7% and were insulin independent further patients who were earlier on their course of therapy, where on a.
Similar trajectory as the two patients with long term follow up.
Based on these results. The VX 880 trial has now advanced to part C where patients are treated concurrently at the full target dose and as part of our global study plan. We've now open clinical trial sites in Europe . In addition to those already open in the U S and Canada.
Our second program VX two six for the selfless device program encapsulate. These same cells, which have already demonstrated proof of concept in a proprietary immuno protective device and hence there is no requirement for Immunosuppressant I am pleased to share that enrollment in the VX two six for study hasn't.
She aided and we've already dosed the first patient the third program is our hyper immune program in which we added the same fully differentiate itself to cloak them from the immune system. This represents another path to obviating the need for immuno suppressants in March we expanded our collaboration.
With CRISPR therapeutics into type one diabetes to use CRISPR Cas nine to make these edits and we continue to make progress in this research stage program <unk>.
Transitioning now to Enoxaparin or VX 147, the first potential medicine to target the underlying cause of April one mediated kidney disease or a M. K D. A genetically defined disease that affects approximately 100000 patients in the U S and Europe alone recall the enact the planned pivotal program for patients.
With an K D is a single adaptive phase two three study with a pathway to accelerated approval in the U S. The phase two b dose ranging portion of the study continues to enroll and dose and remains on track to complete. This year. We also continue to work to enhance a M.
Katie disease awareness and genetic testing availability to support diagnosis, including through partnerships with Natera, a leader in genetic testing and Arcana a leader in renal pathology services to.
To close and update on our Alpha one antitrypsin deficiency or a a T. D program, our small molecule approach targets, both the lung and liver manifestations of this disease that affects an estimated 100000 people in North America and Europe . Our program is exploring two hypotheses first.
Longer treatment duration with VX 864, and second a more potent molecule with VX six three for the phase III program for VX eight six for a 48 week study in patients with a a T D that assesses both liver clearance of Z polymer and functional plasma a a T.
Levels is ongoing and is anticipated to complete enrollment later this year.
We had six three for the next in class molecule with multi fold greater potency and better drug like properties is projected to complete its phase one trial by the end of this year overall, the a T. D program remains on track and we look forward to sharing results in 'twenty 'twenty four with that I'll turn it over.
Stuart to provide a commercial update including details on our launch preparations for axis out.
Thanks Rushmore.
From a commercial perspective, we had strong second quarter results as we continue our focus on reaching all patients eligible for our C. F T L modulators and maintaining high levels of adherence for patients treated with our medicines.
In addition, we continue to prepare for multiple potential near term launches, including extra sell in severe sickle cell disease, and transfusion dependent beta thalassemia VX 548 in moderate to severe acute pain in the vans, the CAFTA triple combination and C F.
At the same time, we are developing new capabilities to support the commercialization of other pipeline assets such as disease awareness for a M K D and investing in our manufacturing capabilities for type one diabetes.
Given our nearest term opportunity is extra sell in hemoglobin off with is where we have completed our regulatory filings in Europe and the U S and also being granted <unk> dates in the U S.
This quarter I will focus my comments about our pipeline on prelaunch activities for <unk>.
But briefly first on C F.
At the beginning of this year there were more than 20000 people with CF in North America, Europe , and Australia, who could benefit, but we're not yet being treated with a C. F. T O modulator we.
We continue to bring our medicines to these patients through new approvals and uptake following additional reimbursements with a focus on reaching younger patients and this will continue to be a driver of near term growth for our business.
Second quarter 2023, CF revenue growth of 14% was consistent with this outlook and was driven primarily by expanded use of our medicines in younger age groups.
Following U S track after approval in children ages two to five in late April we've seen strong interest from the CF community with the first prescription written just hours after the approval and uptake across all eligible patients.
Outside the U S. Caf trio growth has continued to be strong impatient ages 16 and older following approval reimbursement and successful launches in multiple geographies. In addition, we received EU approval for ORKAMBI in children Ages wanted two in early July and we continue to expect approval for Caf trio in the EU in children ages two to.
Five by the end of this year.
We are also actively enrolling our Caf trio study in children ages, one to two.
Overall, we see continued growth for our portfolio of C. F. T O modulators, driven by approvals reimbursement and uptake of our medicines in younger patients.
In addition approvals of future CF medicines will also drive growth.
Notably our next generation Venza CAFTA triple seeks to provide improved efficacy for patients and a new treatment option for those who have discontinued prior C. F. T R modulator therapy.
And longer term VX five two to our mrna approach could offer a therapy for more than 5000 patients who cannot benefit from C. F. T. Our modulators shifting now to X L, which holds curative potential for patients with severe sickle cell disease, and transfusion dependent beta thalassemia, both chronic diseases.
That can be disabling and life shortening and have an extremely high burden of care.
On previous quarterly earnings calls I provided details for X or sell on the estimated eligible patient population the geographic concentration of those patients and a proposed a T. C network of 50 centers in the U S and 25 in Europe , the hiring and training of our field and medical education teams and insights from physician and patient market research.
Such.
This quarter I'd like to provide our perspective on access and reimbursement and our discussions globally with payers and policymakers.
Our teams continue to make excellent progress in preapproval discussions with both government and commercial payers in the U S and Europe .
With more than a dozen and cell and gene therapies on the market payers across different channels are increasingly experienced with these transformative types of therapies.
In the U S approximately 65% of patients with sickle cell disease or beta thalassemia have coverage through government programs with the majority via Medicaid and the remaining 35% of patients are covered by private insurance. Our teams have already engaged Medicaid administrators in all 50 states with a particular focus on the 24 states.
With the highest prevalence of sickle cell disease accounting for an estimated 90% of Medicaid patients with S. C D.
We're encouraged by the enthusiasm from state Medicaid administrators for X S. L as well as the proactive steps they are taking to prepare for the availability of therapies like X L, including the enablement of separate payment policies for coverage of the cost of the therapy distinct from the cost of the bone marrow transplant procedure.
The Medicaid focused CMS cell and gene therapy access model also continues to make progress towards its anticipated launch in 2026.
The model is clear evidence of the federal government's recognition of the potential transformative value of gene therapies, like X or sell to treat sickle cell disease and their interest in finding innovative payment solutions and pathways for state Medicaid programs.
Shifting to commercial payers, we've had high levels of engagement with commercial payers, including the top four players that account for approximately 80% of commercial lives.
And our goal is to facilitate timely coverage decisions upon a potential extra cell approval.
Preapproval discussions have been encouraging and are focused on disease burden epidemiology estimates, our clinical data and potential payment models.
In Europe , the MAA reviews are well underway and thus we are also working on paving the way to secured reimbursed access for patients in our targeted European markets.
We have been engaging with health systems to educate them on the significant disease burden on patients health care systems and society.
In addition, we have been meeting with European health authorities to understand their interest in different payment models and to communicate the holistic value of a onetime potential functional cure.
Given the urgent unmet need for new treatments for sickle cell disease, and beta thalassemia. There is significant interest from patients and physicians, particularly in geographies with high concentrations of the eligible patient population.
To conclude it's a remarkable time to be at vertex, we continue to make progress treating more CF patients, while our excitement for the transformative promise of X yourself of patients and the resulting multibillion dollar market opportunity continues to grow as we approach potential approval. We are also preparing for multiple additional near term launches.
Including the vans are capped a triple in CF and VX 548 in acute pain, both of which have the potential to dramatically improve patients' lives.
I'll now turn the call over to Charlie to review the financials.
Thanks Stuart.
<unk> has excellent results in the second quarter of 'twenty twenty-three demonstrate once again, our consistent strong performance and attractive growth profile second quarter 2023 revenue increased 14% year over year to 2.49 billion growth was led by a 26% year over year increase outside the U S on <unk>.
Tenured strong uptake of tried kept a cap trio in markets with recently achieved reimbursement as well as label extensions in younger age groups. Similarly expansion in younger age groups helped to drive 7% U S revenue growth. Following the recent FDA approval of tried catheter in patients ages, two to five second quarter and first half revenue.
Who's also benefited from increases in channel inventory in certain international markets, which are expected to draw down in the second half.
Second quarter 'twenty twenty-three combined non-GAAP R&D acquired IP R&D and SG&A expenses were 1.04 billion compared to 750 million in the second quarter of 2022.
Q2, 2023 results include 110 million of acquired IP, R&D charges compared to $62 million of such charges in the second quarter of 2022 second quarter 2023 IP R&D expense reflects a 70 million dollar milestone to CRISPR therapeutics for progress made in our hyper immune program for type one diabetes.
Aside from our investments in external innovation, and the resulting higher acquired IP R&D charges operating expense growth was driven as expected by continued investment in research and our advancing pipeline, which includes mid and late stage clinical assets across eight different disease areas.
The most significant areas of increased investment versus prior year included the clinical studies for the vans are capped a triple in CF for VX 548 in acute pain and for type one diabetes. In addition, we continued our pre commercial activities for X yourself and other anticipated near term launches given the potentially transformative benefits to <unk>.
Patients and multibillion dollar market opportunities for our mid and late stage programs, we will continue to invest appropriately.
Second quarter 2023, non-GAAP operating income was 1.15 billion compared to 1.19 billion in the second quarter of 2022 second quarter non-GAAP earnings per share were $3.89, representing 8% growth compared to $3.60 in the second quarter of 2022.
We ended the quarter with $12 6 billion in cash and investments now switching to guidance.
Given our strong first half results and our consistent execution, including the successful launch of Tri catheter in patients ages two to five in the U S. We are increasing our 2023 revenue guidance as detailed on slide 16 for the full year 2023, we now expect CF net product revenue of 9.7 to 9.8 billion an increase of.
$100 million to $150 million compared to our prior range of nine point by five to 9.7 billion.
Note that this revenue guidance includes an expected approximate 150 percentage point headwind to our revenue growth rate consistent with our prior expectations. In addition, given our December 8th U S. Paducah date for eggs or sell in sickle cell disease 20, twenty-three product revenue guidance continues to reflect revenue from cystic fibrosis products only.
We are also raising our 'twenty twenty-three guidance for combined non-GAAP R&D acquired IP R&D and SG&A expenses to a range of 4.1 to $4 2 billion, an increase of 200 million from prior guidance. This increase reflects higher IP R&D expenses from new business development, including collaborations with <unk>.
<unk> and D M, one and with CRISPR in type one diabetes are 2023 non-GAAP operating expense guidance now includes approximately $500 million of Upfronts and milestones compared to the 300 million projected at the start of the year.
We continued to invest a majority of our operating expenses into R&D given the momentum in our multiple mid and late stage clinical development programs. We are also funding the expansion of our commercial capabilities in anticipation of the multibillion dollar opportunities represented by our programs with near term launch potential while continuing to leverage and attractive.
In this model afforded by our focus in specialty markets our guidance for projected full year 'twenty twenty-three non-GAAP effective tax rate of 21% to 22% is unchanged.
In closing the vertex delivered excellent results for the second quarter of 2023, we delivered strong revenue growth completed important regulatory milestones updated on significant clinical trial programs and invested internally and externally as we continue to advance our programs in 'twenty twenty-three, we anticipate further important milestones.
As highlighted on slide 17 to Mark our continued progress in multiple disease areas.
We look forward to updating you on our progress on future calls and I'll ask Susie to begin the Q&A period.
Thanks, Charlie Gerry can you please queue. The first question.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you were using a speaker phone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two our first question is from Phil Nadeau with Cowen.
<unk> company. Please go ahead.
Good afternoon, Thanks for taking our questions just a couple on extra sell them in the prepared remarks, you mentioned or at least in the press release, you mentioned that an advisory committee is likely just for.
Any sense of what it's like to be discussed or debated at the Advisory Committee and then second for Stuart.
Thanks for all your comments on the commercial prep, we have seen gene and cell therapy launches get off to a relatively slow starts avoid.
With some not actually having patients dose for for seven or so months.
After approval, what does vertex learn from that or could you do to increase.
Increase the speed at which patients are adopting X yourself post approval. Thank you.
Hey, good afternoon, Phil This is Rachel I'll, let me take the first part of your question and I'll ask Stuart to comment on the commercial launch readiness with regard to extra sell the FDA has informed us that there will be an advisory committee.
Is not unexpected as we've discussed in the past given the new mechanism of action.
We don't have further details those will be forthcoming and.
I expect we'll know more as we approach the date of the AD com, which we don't have today E. There. However, a conventionally the advisory committees, usually take place about one to two months before the produced per day. So that's the general framework that we're looking at are we are very excited to.
<unk> the opportunity to share our data to talk about the benefit risk and can talk about that transformative potential and to have the patient voice is heard at the Advisory Committee, let me turn it over to Stuart to comment on our launch readiness.
Yeah, Phil so thanks for the question.
Obviously, the first most important step to provide the conditions for a successful launch all going to be to secure access and reimbursement because as you know without access and reimbursement there really is no opportunity for patients to get treated and that's why.
I focus my comments on that and we are doing everything we can.
With payers both in the U S and internationally now to try and get access and reimbursement is close to a regulatory approval as we possibly can obviously, that's not entirely within our control but that's.
What we're working on in terms of the kind of uptake curve in the future now obviously, that's going to depend on the interest from physicians and patients we know that that is.
Very high.
But I would remind you that as I've said on previous calls we do expect the uptake with X yourself it'd be slower obviously than we see with our CF medicines, where the launches are almost vertical and that's largely because as you know this is a multi month process that a patient has to go through to get treated with <unk>.
So obviously they have to decide with their physician that they want to go through a gene therapy that they have to have their cells collected the cells that have to be edited return to the site and then the patient is to schedule coming in for essentially the equivalent of a bone marrow transplant before they are actually dosed with the ex cel drug product. So.
It is a multi month process from start to finish for any individual patient and so that's why we've always said this launch we do expect to be slightly slower in uptake rate then in cystic fibrosis. We continue to believe there's a lot of interest it's a big market opportunity and we see excess L. A is a multibillion dollar opportunity in the future.
Great and one follow up if I might on the reimbursement we've seen warranty agreements put in place by one recent gene therapy launched is that something you are considering or do you think would be helpful.
So I feel I didn't quite catch the question can you say it again in terms of reimbursement in the structure.
Of reimbursement agreements one recent gene therapy launch included a warranty as part of the reimbursement agreement is.
Is that something where Texas, considering or would think would be helpful for a launch like X yourself.
Yeah, we are considering a range of different options fill the reason for that is.
It's kind of if you ask one payer what theyre looking for you get one answer if you ask another pay you got another one so so I think much as we've done with cystic fibrosis, we're going to look to be flexible there awesome, who are going to be interested in just a straight price and just paying upfront for the benefits of a onetime functional cures.
They are looking at more things like outcomes based agreements and that and so right now we're in kind of listening mode and defining and designing.
The nature of our payment models will be but I think the key word is probably flexibility.
Perfect. Thanks for taking our question our questions and congrats on the progress.
Yeah.
The next question is from Lisa Baker with Evercore ISI. Please go ahead.
Hi, there thanks for taking my question and congratulations on the good quarter.
Wondering if you could.
Give us a view on sort of the next data readout figure type one diabetes program are both the south and themselves plus pouch. Thanks.
Sure thing.
Lisa with regard to the <unk> program.
On the VX 880 side, that's a let's call it the naked cell program.
You should expect to have a data readout at the fall diabetes conference.
Where there will be an oral presentation.
The two six for a program that's the self plus device program. We've just initiated enrollment we've just dosed as you heard in my prepared remarks, the first patient and you should expect to hear from US with regard to result from that South plus device program, which does not require immunized.
Our preference either when we've reached a milestone in terms of a data readout or we have a decision to communicate we won't be sharing results patient by patient.
Okay Fair enough and then.
You think about your kind of commercial path for pain, or you're going to be focusing on certain types of centers. I mean, this could be obviously, a very broad market and opportunity how are you thinking about the rollout.
And where are you now.
Curious on that kind of thing is that the that the market estimates could be.
You know I have a very wide range, depending on how you think about it. Thanks.
Sure Lisa.
You're right we see this as a enormous opportunity let me ask Stuart can tell you how we plan to.
To approach that opportunity Stewart, yeah, so acute pain, obviously, which is going to be our first launch indication.
The studies being positive.
Is two things can be true at the same time, Lisa I'd say, one is acute pain therapies off prescribed by a wide range of prescribers that is indeed true, but it's equally true that a large percentage of the prescriptions are concentrated in institutions ambulatory surgical centers settings like <unk>.
That where patients are either prescribed and dispensed their acute pain medicine, whilst they're in the institutional the facility and then they're also prescribed and given a prescription on discharge for their ongoing paint management when they leave the facility.
That accounts for a large percentage of the prescriptions in acute pain. Those prescriptions are concentrated in somewhere around just shy of 2000.
Sites covered by about 220, or say Ivy and then that is going to be the primary focus of our commercialization activities. We think we can cover that universe of centers, where the sales force approximately in the 150 range, which fits very nicely with a focus on specialty markets.
Thanks.
Pardon me at the request of management could we please limit yourself to one question and if you have a follow up please press star one to rejoin the queue.
Next question is from a salve in Richter with Goldman Sachs. Please go ahead.
Okay.
Good afternoon. Thanks for taking my question just a follow up on the acute pain program I'm. Just can you help us understand apart from you know.
Upon a positive data outcome here and.
Target prescribers, you mentioned what needs to be done logistically to ensure a successful launch with regard to them.
Just the who the marketing aspect E. Whether there's kind of any you know any understanding that needs to be played out with regard to contracts and how the no pain la kind of falls into this just any idea of how you can ensure that this plays out well. Thank you.
Sure. So I mean, I'll ask Stuart to comment.
Yeah, Solvay and thanks for the question I think there's a couple of other things that are likely to be supportive of VX 548 in acute pain. One is I think we all likely to see a number of the existing pain treatment guidelines consider update their guidelines. Once there is the availability of a.
Safe and effective non opioid medicine. In addition, and you mentioned one of them I think we are increasingly you're going to see.
Policies change their focus the policies that have been put in place in states and hospitals over the last few years for understandable reasons have largely all of that being about restricting.
Prescriptions, restricting who can prescribe for which patient types for what length of time I think we all begin to see the focus of those policy initiatives change to being supportive.
Of non opioid pain medicines like VX five four right and I think that's a very welcome systemic change, which will potentially support the uptake of VX five four rate.
Subsequent to it getting approved so in addition to our own commercialization efforts I think theres, a number of other things, which would be supportive of the launch.
The next question is from Geoff Meacham with Bank of America. Please go ahead.
Hey, guys. Thanks for the thanks for the question.
Just had a follow up on extra sell I know you guys are focused today on record.
And when commercial as well, but when you think about the improved conditioning regimen and wanted to know kind of what we're what we should expect from that optimization of that what are kind of the what does success look like I guess for that and what are the timelines I think that will we will see some some data for it.
Sure.
As we think about the abuse saw fan base conditioning regimen, which is what XFL will launch with we see that as having a positive benefit risk.
Profile for the approximately 32000 people with the most severe forms of sickle cell disease, and beta thalassemia and with the improved our gentler conditioning, we see the opportunity to serve the full 150000 people with sickle cell disease and beta thalassemia in Europe and.
The U S.
What this program looks like and we have an active set of programs internally our partners at CRISPR are working on this problem other academia and biotech start working on this problem and so I do see this as a problem that will be solved it's not a tomorrow solution, but I see this happening in the coming months.
And years.
What we see is the opportunity to have a conditioning regimen that very specifically targets the compartment and the cells.
That are limited to those hematopoietic stem cells sparing all of the other cells and in so doing not have the side effects of yourself and including the very significant.
Significant cytopenia is that you've seen with for yourself and so I do think that this is a area that we will see a solution for because we and others are working on it and because of the broad application and I do think you'll see progress in the coming months and are in our.
Yes, I don't mean decades.
Okay.
Thank you.
Our next question is from Robin Karnofsky US was true of Securities. Please go ahead.
Hi, sorry for the noise I'm on board a plane or wherever it occurs. So question is what is the bar for neuropathic pain I know your previous study with your previous drive kind of looks similar to Lyrica, maybe you could set that for us in seconds.
You know we've done some due diligence and the chemo related peripheral neuropathy is a huge unmet need I want to know what you thought it might work in this population as well thanks.
Yeah, So robyn the bar for neuropathic pain is to have a better overall profile benefit with taken together than existing therapies. As you know the existing therapy has limitations in terms of efficacy, but there are also limitations.
On the safety Slash AE side and the reason for that is what we use for neuropathic pain is frankly, a recycled medicine that comes from fundamentally central nervous system depression that we are we using for neuropathic pain, because that's the best we have so what we're gonna be.
Looking for is improvement in diabetic peripheral neuropathic pain scores change from baseline and our phase two dose ranging proof of concept study also has a lyric arm for context. So we will be able to see the magnitude of the treatment effect as well as.
Oh Lyrica arm for for context.
The next question is from David Risinger with Leerink partners. Please go ahead.
Yes, thanks, very much I wanted to change gears. Please to your to a T candidates could you frame the efficacy results to watch in 2024.
Potential timeline for those Readouts next year. Thank you.
Sure.
David I think you're asking about the a T D program and just to ground everyone on that one. This is our program where we have two molecules VX 864, which is in a phase two study and VX six week or which is making its way through our phase one study.
Our excitement for this particular program in disease comes from the fact that it fits the vertex strategy like a glove, we are seeking to target both the liver and lung manifestations of this disease in our small molecule approaches the only one that holds the potential to treat both liver and lung manifestations that I do believe you.
Need to treat both in order to have a transformative medicine.
Our VX 864 study, which is in phase two is a long term study. It's a 48 week study and there we are looking at the impact of long term dosing on both functional <unk> levels in the blood.
And clearance of liver polymer you might recall that on a post hoc analysis of our VX 864 phase two data from a few years ago, we saw a 90 plus percent reduction in <unk>.
Here are the polymer levels, which is why we're so interested in the liver polymer.
And in the six week four study we are going through our first in human studies. So I expect that we'll have all the results from both of these trials by some time next year, So 2024, and I expect that we'll be able to share the results at that time exact timing, we're gonna needle.
Got a few more months under our belt to look at the enrollment dynamics, but I do expect we will be sharing results by sometime next year. So it's a 24 a milestone.
Thank you.
The next question is from Terence Flynn with Morgan Stanley . Please go ahead.
Alright, thanks for taking the question.
You mentioned there were about 20000 patients not on drug at the start of the year that could potentially be eligible just wondering where that figure will and assuming you achieve your new 2023 guidance. Thank you.
Yeah sure. So we've kind of gone away over the last few years of kind of giving detail detail to the forensic accounting of OLED different patient numbers, and so I'm not going to kind of give you an.
An updated estimate at this time, but as Charlie said in his remarks, and I said in mind, we've continued to make good progress in treating more patients, including in younger age groups and including in other countries, where we've secured reimbursement in launches, but other than that we're not going into more detail at this time.
We may if that's a substantial change we may update.
Those numbers as we've done in the last couple of years also.
At the beginning of next year, when we talk about our guidance for the following year.
The next question is from Mohit Bansal with Wells Fargo. Please go ahead.
Great.
For this.
Thanks for taking my question.
Just wanted to.
Get some color on.
How do you. So you talked about sweat chloride improvement with Davita Lenscrafter trial is.
Is there a correlation between.
The amount of spectrum that you produced versus the SUV improvement.
If I'm not mistaken the improve the subscriber improvement was about 30% more than the dry cast that combo.
This combo so.
Just trying to understand how should we think about that.
For FCB that Docomo will effect. Thank you.
Yeah.
I think you're talking about the vans the captive triple that's our next next in class a regimen for CF. This is the program that's in phase III and we expect to complete both studies in the 12 plus year old age group and the six plus your age group this year.
With results from that pivotal program early next year with regard to your question on sweat chloride N. P. P. F. Even one yes. There is a very strong association between improvements in sweat chloride and improvements in lung function and you can see that across all of our previous see FTR modulators.
All the way from Kalydeco floor can be Sim and try capped out so that relationship is strong in terms of what you should expect from the vans the captor triple or let me put it another way. The reason we have such high enthusiasm for the vans are captured triple in the preclinical experiments, including the very important.
H B assays, which have been not only qualitatively predictive, but quantitatively. So the vans the captive triple I know this is going to this is that hard to believe in a tall order, but the vans the captive triple pre clinically is even better than try catheter in our HPE, south and when we look across the phase III.
That had been done the vans, a captive triple have better sweat chloride.
That even tried kafka, it's hard to call make a call on P. P. F E V. One because in the phase II studies the sample sizes are obviously.
Smaller and P. P. F E V. One is a more variable endpoint. So I think the right measure to look at is indeed, sweat chloride and from all of the data we've collected banter.
It's even better than try character on that measurement of sweat chloride.
Helpful. Thank you.
The next question is from Michael Yee with Jefferies. Please go ahead.
Hey, guys. Thanks for the question.
You announced that the chronic pain neuropathic pain study phase two was completed enrollment so that's super exciting and the data I guess is end of 'twenty. Three early 'twenty four can you talk a little bit about I guess on one side you feel confident because if the biology and the acute data was also quite strong and Theres also some early chronic data as well.
The last trend, but also I guess historically chronic pain studies can be challenging with placebos, even with Vicodin opioids, you can get mixed results. So I just wanted to add.
Ask about your confidence around this probability success versus the acute study and how we should take this study into <unk>.
<unk> from an expectation standpoint gave its anticipated two thanks very much.
Sure.
My confidence level in the VX 548 program.
Is equal for the acute pain studies in that phase III program as it is for the diabetic peripheral neuropathy phase II program and Youre right that confidence comes from the pharma.
Pharmacologic validation of the target, which we ourselves are conducted with our predecessor molecule VX 150, and also the genetic validation of the one eight target.
With regard to a double click on what you could expect from both acute and then neuropathic pain studies. The acute pain program is two randomized clinical trials in the same bunionectomy abdominoplasty. Those are two of the RCT and the third is a single arm safety and efficacy study to allow abroad model.
To severe acute pain label and the various settings that Stuart described in terms of youth and.
And I expect that those results will be available late this year early next and the goal. There is gosh, if we see what we saw in phase two for VX five four at acute pain that would be a homerun for the diabetic peripheral neuropathy program. This is a multiple dose dose ranging proof of concept study, where we also have.
Have a gabapentin arm for context, so what you should be looking for there is improvements in the pain score from baseline to the 12 week time point, when we have the pain endpoint and you'll be able to make our assessment versus the gabapentin.
Arm that's in there for context.
In that study.
Is fully enrolled and should also be available in terms of results late this year early next.
Thank you.
The next question is from Evan Seagram's with BMO capital markets. Please go ahead.
Hi, guys. Thank you so much for taking my question kind of a follow up <unk> question on the vans a triple.
Talk about what the added benefit of the vanda triple needs to be versus try catheter to get patients to switch and you also mentioned you know getting patients to levels of carrier levels of sweat chloride could you ever get to a wild type level sweat chloride. Thank you.
Yeah, Let me take the second half of your question, Evan and then I'll turn it over to Stuart.
To talk through how.
How were seeing the commercial opportunity for the vans a triple.
So when you look at.
Aaron.
So carriers of the C at a mutation.
For those who don't have disease when.
When you are at those carrier levels of sweat chloride you have virtually no manifestation of disease. That's why we're targeting carrier levels of sweat chloride, you're fundamentally just like you and me I don't I'm, not a carrier and I am not a patient with CF, but if you're a carrier of.
Yet you are fundamentally.
Affected that's why that's the highest bar to achieve and that's why that's the bar we continue to chase.
The trial tactic trip will get some patients there the vans the captor triple will get more patients there, but our research continues and we've already identified additional potentiate, there's an corrector that will get us to that ultimate goal of carrier levels of sweat chloride Stuart.
So and in terms of the.
Sort of uptake and what's attractive is the profile, we know from speaking with CF clinicians if vans. The CAFTA has the sort of profile that regimen described earlier, where it's delivering increased levels of benefit in terms of C. F. T cell function as measured through sweat chloride that that in and of itself will be an attractive.
Opposition, because as restaurants said the link between increases in CFT, our function and improvements in outcomes has been demonstrated through our through our own work.
In addition, you were talking about patients potentially transitioning I do think there's an important group.
Also consider which is there have been a number of patients who over the years have discontinued the <unk> modulators, it's probably somewhere north of 6000 patients who we now want to be honest the FTR modulator, but have had to discontinue over the years and I do think that's another population who will welcome an additional treatment option.
Being available.
The next question is from Colin Bristow with UBS. Please go ahead.
Hey, good evening and congrats on the quarter, maybe one other CRISPR based in D program are you still on track with all of the audit and the second half.
And then assuming all goes to plan.
Would it be reasonable to expect clinical data in 2024, and then maybe if I could just a quick follow up to the event that has to kick off with a question.
What do you think you need to see because it could be a.
Yeah.
<unk> as a major component of switches, but it's just a new patient acquisition. Thank you.
Oh, and I think they're two separate questions in there one about the vans.
Triple and what do we need to see and then one on DMV.
Let me tackle the D. M D. D. M. One question I'll come back to vans out all the D. M. D question I'm going to broaden that to muscular dystrophy as a whole and I'll talk about D. M D and DM. One we have programs in DMD that are going through IND, enabling studies now as well as in D. M. One we actually are.
Multiple programs in D. M. One the lead program is the one that we in licensed from and Trotter and that program also is already in IND, enabling studies and both of them should have those results in the second half of 'twenty, three and our timing remains to file the IND for both the M D.
And for D M. One for the.
Lead program, India, and one in the second half of this year.
With regard to the Vantiv program I think Stuart just covered that what we're looking to see in the way. The study is designed is.
<unk> in the Phase III program head to head versus try CAFTA and the primary endpoint is sweat chloride and the reason for that is.
Again with patients who with carriers those with who all have one CF gene they.
They have virtually no manifestations of disease.
And that is measured assessed by a the sweat chloride carrier level is a description.
Description of sweat chloride levels. So that's what we're measuring we are of course going to have P. P. F. E V. One in there and as Stuart said, if the profile is as I describe it to be improvement on sweat chloride levels.
We expect it to have a real value to patients I'll also add that the vans. The captive triple has a lower royalty burden than the Tri CAFTA combination.
Thanks, Collin Gerry that brings us to time, because it causes athlete.
This concludes the question and answer session and the conference is also now concluded. Thank you for attending today's presentation. You may now disconnect.
[music].
Yeah.
[music].
Yeah.
Yeah.
[music].