Q3 2025 Earnings Call Transcript

Good day, and welcome to the Vertex Pharmaceuticals Third Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Susie Lisa. Please go ahead, ma'am.

Good evening, all. My name is Susie Lisa, and as the Senior Vice President of Investor Relations, it is my pleasure to welcome you to our third quarter 2025 financial results conference call. On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's CEO and President; Duncan McKechnie, Chief Commercial Officer; and Charlie Wagner, Chief Operating and Financial Officer.

We recommend that you access the webcast slides as you listen to this call. The call is being recorded, and a replay will be available on our website. We will make forward-looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission. These statements, including, without limitation, those regarding Vertex's marketed medicines for cystic fibrosis, sickle cell disease, beta thalassemia and moderate to severe acute pain, our pipeline and Vertex's future financial performance are based on management's current assumptions.

Actual outcomes and events could differ materially. I would also note that select financial results and guidance that we will review on the call this evening are presented on a non-GAAP basis. I'll now turn the call over to Reshma.

Thanks, Susie. Good evening all, and thank you for joining us on the call today. Vertex delivered strong performance across the board in Q3 with $3.08 billion in revenue, reflecting double-digit growth versus Q3 2024. As we continue to extend our leadership in CF, we're also diversifying our revenue base by product and by geography with the growing global momentum of CASGEVY and the broad uptake JOURNAVX and acute pain across a wide range of prescribers pain types and settings of care, Concurrently, we are forward planning for the fourth vertical of Vertex's growth. Centered on renal diseases and povetacicept in multiple indications, starting with Pove in immunoglobulin A nephropathy or IgAN.

Moving to the pipeline and starting with CF. Our long-standing goals in CF have been threefold: one, bring forward a medicine that can treat CF patients who make some amount of CFTR protein. Two, bring forward a medicine that restores CFTR function to normal levels as measured by sweat chloride and to do so from as early in life as possible. So patients have the potential to live a long and healthy life like people who carry just one CF allele; and three, bring forward a medicine for the last 5% of CF patients who do not make any CFTR protein at all. .

We are making progress on all 3 fronts. First, ALYFTREK treats more mutations than TRIKAFTA. The number of patients newly eligible for CFTR modulator that treats the underlying cause of their disease is approximately 400 more patients in the U.S. and approximately 4,000 more patients in the EU than TRIKAFTA. In total, 95% of all patients are eligible or will be eligible for ALYFTREK as we make our way to lower age groups.

Second, ALYFTREK, which launched in the U.S. late last year and is launching in Europe now has seen a strong response from patients and physicians who are excited for a once-daily medicine that can bring sweat chloride levels down in patients ages 6 plus to the lowest levels achieved of any CFTR modulator in this age group, 2 additional points to make on sweat chloride. We recently completed the pivotal study for TRIKAFTA for the 1- to 2-year patient population and the results are remarkable. The study's primary endpoint was safety and the data were consistent with the established safety profile of this medicine.

The secondary endpoint was reduction in sweat chloride. The baseline sweat chloride was about 100 millimoles per liter, and over the course of the 24-week study, there was a mean reduction of more than 70 millimoles per liter from baseline through week 24. Furthermore, nearly 70% of patients in the study achieved levels of sweat chloride below the 30 millimole per liter threshold the level considered normal. This magnitude of sweat chloride improvement is unprecedented, and the largest reduction we have seen with any CFTR modulator in any population to date. We are on track to make global regulatory submissions for TRIKAFTA in this population of 1 to 2 year olds in the first half of 2026. Additionally, as we serially innovate, we continue to develop new CFTR regimens with the aim of reaching our long-standing objective of bringing the majority of patients of any age with CF to normal levels of sweat chloride.

As I just discussed with the TRIKAFTA 1- to 2-year-old study, we are already there in our youngest patients. And in our ALYFTREK Phase III study of 6-11 year-olds, more than 50% of patients got to normal levels of sweat chloride VX-828, our NextGen 3.0 CFTR corrector is the most efficacious we have ever studied in vitro to enter the clinic. I am pleased to share we have now initiated the CF cohort in the VX-828 study. And third, regarding our final goal, VX-522, which we're developing for the 5,000 or so patients who cannot benefit from our CFTR modulators, we have resumed enrollment and dosing in the MAD portion of that Phase I/II study.

Moving then to pain. In acute pain, during the quarter, we completed enrollment in 2 Phase IV trials evaluating JOURNAVX initiated preoperatively and as part of multimodal approaches to acute pain management. The interim analysis for one study will be shared at a medical conference later this week, and top line results for JOURNAVX show safety and efficacy, consistent with the pivotal program. Accompanied by substantial reductions in opioid use following aesthetic or reconstructive procedures with approximately 90% of participants being opioid-free compared to less than 10% after similar procedures per the literature.

In neuropathic pain, the first DPN Phase III study is well underway, and we have completed work that sets up the initiation of the second DPN Phase III study later this month. Transitioning now to the kidney portfolio. Renal Medicine is experiencing a renaissance in drug development, and Vertex seeks to be a leader in the field. With our differentiated R&D approach, grounded in causal human biology, validated targets and biomarkers that translate, we have a broad portfolio of innovative therapies with transformative potential for patients with serious kidney diseases.

Our clinical pipeline has first-in-class or best-in-class assets for 4 kidney diseases. 3 of which are already in or approaching pivotal development. VX-407 for autosomal dominant polycystic kidney disease, or ADPKD, and inaxaplin for APOL1-mediated kidney disease or AMKD pove for IgAN and pove for primary membranous nephropathy. Starting with VX-407 ADPKD, where the Phase II proof-of-concept study was initiated earlier this quarter. Recall, there are approximately 300,000 patients with ADPKD in the U.S. and Europe.

These patients have limited treatment options and no approved therapies that treat the underlying cause of this disease. We believe that up to 10% of patients with ADPKD may be eligible for treatment with VX-407, a first-in-class small molecule protein folding corrector. VX-407 is designed to target the root cause of ADPKD by restoring PC1 protein function. This Phase II proof-of-concept study is a single-arm trial of 24 patients that evaluates the effect of VX-407 on height adjusted total kidney volume.

The second kidney program to highlight is inaxaplin for primary AMKD, a disease that affects 150,000 patients in the U.S. and EU. Enrollment in the interim analysis cohort of the amplitude pivotal study has completed. The patients in this cohort are now being treated for 48 weeks, after which we will conduct the interim analysis. And if positive, we will be poised to submit for potential accelerated approval in the U.S.

Additionally, we are running the amplified study, which is a Phase II proof-of-concept study of inaxaplin in patients with AMKD with moderate proteinuria or patients with AMKD and diabetes populations not being studied in the amplitude trial. AMPLIFIED is on track to complete enrollment by the end of this year. Now turning to povetacicept. The lead and first indication for pove is IgAN, a disease impacting more than 300,000 diagnosed patients in the U.S. and Europe and over 1 million patients globally.

There are 4 points to highlight in this program. First, we completed enrollment of the interim analysis cohort of the RAINIER Phase 3 trial earlier this year. Second, the FDA has granted pove breakthrough therapy designation and rolling review for our BLA. Third, we have completed the studies to support the launch of pove for at-home self-administration with a subcutaneous auto-injector.

Lastly, the new news, I'm very pleased to share tonight is that we have completed full enrollment in the RAINIER Phase 3 trial. The trial enrolled approximately 600 patients in approximately 15 months, the fastest of any contemporary Phase 3 study in IgAN and is a testament to the significant opportunity ahead for pove. Here's the outlook when you put these 4 major milestones together with the rolling review that the FDA is granted, we will begin our submission for potential accelerated approval before the end of this year. Once the interim analysis cohort completes 36 weeks of treatment, assuming the results are positive, we will complete our BLA submission for potential accelerated approval in the U.S. in the first half of 2026. We have used a priority review voucher, and thus, we have certainty that pove's BLA in the IgAN indication will receive an expedited priority review in the U.S.

That is a 6-month review versus a traditional 10-month review. Next, and consistent with this pipeline and product potential, we are pleased to have initiated the pivotal study for the second potential renal indication for pove in primary membranous nephropathy. There are approximately 150,000 patients with membranous nephropathy in the U.S. and Europe and nearly 500,000 globally. Today, there are no approved therapies that treat the underlying cause of this disease, leaving a significant patient population with high unmet need.

Pove was recently granted Fast Track designation by the FDA in membranous nephropathy and our Phase 2, 3 adaptive study OLYMPUS, is now underway. One final note in R&D regarding Zimislecel in type 1 diabetes. While we have completed enrollment in the pivotal trial for T1D, we have temporarily postponed completion of dosing while we work through an internal manufacturing analysis. As this is an ongoing pivotal trial, it is critical to maintain study integrity, and so we won't be providing any additional detail.

I look forward to updating you once dosing is complete. In closing, Vertex now has 7 commercialized medicines. Five programs in Phase III development and an exciting earlier-stage R&D pipeline. Accordingly, as we drive to achieve our R&D milestones, we're executing on the concurrent work of getting our approved medicines to more patients around the globe and preparing for additional near-term potential launches.

To tell you more about our commercial efforts, I'll now turn over the call to Duncan.

Thanks very much, Reshma. I will focus my comments tonight on the CF franchise, global launches of ALYFTREK and CASGEVY the U.S. launch of JOURNAVX and commercial planning for our potential launches in 4 serious kidney diseases, the first of which will be Pove in IgAN, Beginning with CF, our CF franchise delivered strong double-digit growth this quarter as we continue to grow the number of eligible patients taking our CFTR modulators. This reflects the ongoing launch of the ALYFTREK, progress with younger patients and patients with rare mutations, enhanced survival benefits of our therapies and expansion into new geographies, such as Brazil and Turkey.

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

We also see continued uptake by those patients who have previously discontinued one of our other CFTR modulators. Lastly, the pace of transition patients primarily those switching from TRIKAFTA remains steady and represents the majority of patients on ALYFTREK in the quarter. Outside the U.S., the early launch of ALYFTREK is off to a strong start in multiple European countries where patients have reimbursed access England, Ireland, Germany and Denmark. And the feedback has been very positive, both in terms of the clinical profile and once daily dosing.

And as Reshma mentioned, there are nearly 10x as many newly eligible patients in Europe with rare mutations for TRIKAFTA and ALYFTREK than in the U.S. and no additional liver monitoring requirements. Overall, we are pleased with the response to ALYFTREK and continue to expect that the majority of patients around the globe will transition to ALYFTREK over time given its multiple benefits. Moving to CASGEVY, our transformative onetime treatment for patients with severe sickle cell disease and beta thalassemia. The momentum continues to build as we enter the last few months of 2025. As a result, we have a clear line of sight to over $100 million in CASGEVY revenue this year and significant growth in 2026. Importantly, we have seen continued progress in securing access to CASGEVY around the world, with the notable recent addition of reimbursement in Italy for TDT and SCD.

Italy has the second largest population in the world of TDT patients at approximately 5,000 patients, about half of whom are eligible for CASGEVY. As further evidence of CASGEVY building momentum across all 3 regions, the U.S., Europe and the Middle East, I'm pleased to report that since launch and through the end of quarter 3, 2025 nearly 300 patients have been referred by their physicians to an ATC to initiate the treatment process. More than 160 patients now have had their first cell collection. This includes 110 in the first 9 months of 2025, double our full year 2024 total.

And a total of 39 patients have received their infusions of CASGEVY edited cells, including 10 patients in the third quarter of 2025. We see continued growth in ATC's onboarding and initiating patients in the U.S., Europe and the Middle East as the treatment teams become more familiar with the process. Through the end of September, 25 ATCs had initiated more than 5 patients and at least one ATC in each of the 3 regions had initiated 20 or more patients. Given the very well understood duration of the treatment journey and the fact that we now have significant numbers of patients at every stage in the process, CASGEVY has a strong outlook, and we are excited to serve the growing numbers of patients through the end of this year into 2026 and beyond.

Now shifting to the launch of JOURNAVX in moderate to severe acute pain. We continue to see a very positive reaction to this novel non-opioid option for the treatment of moderate to severe acute pain. As a reminder, our goals in 2025 were firstly secure broad payer coverage. Secondly, ensure hospital and health system access through P&T reviews and formulary adoption.

And thirdly, drive broad usage of JOURNAVX across a range of physician and pain types with a seamless experience for physicians and patients alike. We are executing well on all fronts, and I'll now provide some details. We continue to make good progress with payers. As of mid-October, across commercial and government payers, over 170 million lives of reimbursed access to generics, up from the 150 million we discussed on our Q2 call.

With commercial payers, our negotiations continue to progress favorably. We have formal coverage under 2 of the 3 large national PBMs and are working to add the third. In Medicare, we continue to engage with plans to secure coverage. And for Medicaid patients through mid-October, we now have a total of 19 states, up from 16 last quarter that are providing access to JOURNAVX without prior authorization or step edit requirements.

We continue to expect that coverage across commercial, Medicare and Medicaid payers will expand through the balance of 2025 and into 2026. Note that even after national payers grant formal coverage for JOURNAVX, it can take time to ensure that all lives are covered in their downstream plans. Therefore, we plan to extend our patient support program, or PSP, into 2026 to ensure that if a physician makes the decision to prescribe JOURNAVX for their patient with acute pain, the patient will receive the medicine. Recall the PSP only kicks in for those patients without coverage or with highly restricted coverage.

So for patient's plan reimburses JOURNAVX, the PSP program is not triggered. Secondly, we're making excellent progress with P&T committees at the approximately 150 healthcare systems and 2,000 hospitals we're targeting, more than 750 hospitals and approximately 90 of the 150 targeted large health care systems have now added JOURNAVX to their formularies, protocols or order sets. Thirdly, we continue to see broad adoption of JOURNAVX by a wide range of physicians, including orthopedic surgeons, plastic surgeons, anesthesiologists, pain specialists and dentists. They're using JOURNAVX in a wide range of pain settings, including surgical and nonsurgical procedures, such as joint replacement and repair, shoulder surgeries, fractures and sprains and dental procedures.

In hospital systems and clinics that have adopted JOURNAVX, we have received impressive feedback from physicians in terms of very significantly reduced or eliminated opioid usage, consistent with the Phase 4 study results Reshma mentioned earlier. Reports from patients also continue to be very positive in terms of how well JOURNAVX manage their pain in addition to being well tolerated. We also continue to see that JOURNAVX is promotionally responsive to our field representative calls as well as our digital engagement with physicians. There is a clear correlation between frequency of calls and depth of prescription writing by physicians.

For these reasons, and as we discussed last quarter, we're planning to add 150 additional representatives in the first quarter of 2026, which will enable us to increase our frequency of calls with existing prescribers and expand our coverage to additional physicians. And to raise awareness of JOURNAVX among consumers, we have a wide range of communication initiatives ongoing, including a partnership with basketball Superstar, Jayson Tatum as he shares his JOURNAVX treatment journey experience post is Achilles injury during the playoffs last season. Finally, as evidence of the growing reception in the marketplace, there have now been more than 300,000 prescriptions filled for JOURNAVX across the retail and hospital settings as of mid-October.

We continue to have high confidence that there is a significant unmet need for an effective non-opioid option to treat moderate to severe acute pain, and we're in the early days of creating another multibillion-dollar franchise for Vertex. I'll close with some comments on our commercial planning for our potential launches in renal medicine, where we have begun the build-out of our commercialization team. We expect that our renal franchise will become a significant growth driver and value generator for Vertex over the next several years. I'll focus my comments this evening on our first step in that direction, pove in IgAN.

We believe that pove offers a unique combination of attributes with a compelling clinical and patient profile. Firstly, pove is a fusion protein specifically engineered for better tissue penetration and to deliver optimized, targeted dual inhibition of the BAFF and APRIL cytokines. In the Ruby III clinical data we've seen to date, pove delivers substantial reductions in [ GDI GA1 ], hematuria and proteinuria. Secondly, among the APRIL only or dual BAFF APRIL inhibitors, pove has the most convenient dosing and administration for patients.

Every 4 weeks at home administration via a subcutaneous auto-injector and the lowest dosage volume of less than 0.5 milliliters. And thirdly, pove is the only dual BAFF APRIL inhibitor in pivotal trials for multiple serious kidney diseases, IgAN and pMN. We believe pove has a superior mechanism of action, a superior clinical profile and will deliver a superior patient experience. In short, we believe pove holds best-in-class potential.

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

Thanks, Duncan. Vertex's Q3 2025 double-digit revenue growth demonstrates our consistent strong performance and attractive growth profile. Third quarter 2025 total revenue increased 11% year-over-year to $3.08 billion. U.S. revenue growth of 15% year-over-year was driven in CF by ongoing patient demand and favorable net pricing versus prior year.

As well as contributions from ALYFTREK, CASGEVY and JOURNAVX. Revenue outside the U.S. grew 4% year-on-year, including mid-single-digit CF growth and a contribution from CASGEVY. . Included in Q3, '25 total global revenue and the regional growth rates was $17 million of CASGEVY revenue and $20 million from JOURNAVX. Third quarter 2025 combined non-GAAP R&D acquired IP R&D and SG&A expenses were $1.28 billion compared to $1.08 billion in the third quarter of 2024. Non-GAAP operating expenses increased 19% year-on-year, driven primarily by the continued advancement of our broad later-stage pipeline, including the acceleration of pove development programs as well as the build-out of commercial capabilities in pain.

Acquired IP R&D expenses were $55 million compared to $15 million in the third quarter of 2024. Third quarter 2025 non-GAAP operating income was $1.38 billion compared to $1.31 billion in the third quarter of 2024. Third quarter 2025 non-GAAP effective tax rate was 17.6%, including benefits from R&D tax credits as a result of last year's Alpine acquisition. Third quarter 2025 non-GAAP net income was $1.24 billion compared to $1.14 billion in Q3 of '24. Third quarter 2025 non-GAAP earnings per share were $4.80, an increase of 10% compared to $4.38 in the third quarter of 2024. We ended the quarter with $12 billion in cash and investments after deploying approximately $1.1 billion to repurchase more than 2.7 million shares in the third quarter.

Year-to-date, we have spent over $1.9 billion to repurchase approximately 4.5 million shares. Our priorities for cash deployment remain unchanged, innovation and growth fueled by investments, both internal and external, with a second priority of share repurchases. Now switching to guidance. With only one quarter remaining in 2025, we are updating our financial guidance for revenue, operating expenses and taxes.

We now expect 2025 total revenue to be in a range of $11.9 billion to $12 billion versus prior guidance of $11.85 billion to $12 billion, representing growth of approximately 8% to 9% for the full year at current exchange rates. This outlook reflects our expectation for continued growth from our portfolio of CF medicines, including the ongoing launch of ALYFTREK in the U.S. and recent launches in Europe. As Duncan mentioned, full year revenue guidance also includes over $100 million of CASGEVY revenue as we treat more patients in geographies where we have secured regulatory approval and reimbursement.

In addition, guidance reflects further contribution from JOURNAVX in the fourth quarter due to growing prescription volumes. We are also refining guidance for combined non-GAAP R&D acquired IP R&D and SG&A expenses and now expect operating expenses of approximately $5 billion to $5.1 billion versus prior guidance of $4.9 billion to $5 billion for the full year. This is primarily due to the acceleration in pove development programs across multiple indications and increased investment in commercial and marketing activities to support the launch of JOURNAVX. There is no change to our estimate of approximately $100 million in projected IPR&D charges for the full year, including the recently announced collaboration with Enlaza.

We continue to expect an immaterial cost impact from tariffs in 2025 based on what we know today due to our significant U.S. presence and our geographically diverse supply chain. Of course, given the dynamic nature of the tariff situation, including the potential for sector-specific tariffs, this outlook is subject to change. And finally, we are lowering our expected full year 2025 non-GAAP effective tax rate guidance from a range of 20.5% to 21.5% to a revised range of 17% to 18% and to incorporate several onetime tax benefits. These benefits include those recognized in Q3 from Alpine related R&D tax credits as well as anticipated recognition in Q4 '25 of previously deferred tax benefits.

In closing, Vertex yet again delivered strong results in Q3 '25, growing and diversifying our revenue with the launch of 2 new products in the U.S., ALYFTREK and JOURNAVX, the launch of ALYFTREK in Europe and the continued global launch of CASGEVY. We also made significant pipeline progress across the portfolio in mid- and late-stage clinical development, including pove's pipeline and a product potential and continued advancement. These and other anticipated milestones of continued progress in multiple disease areas are detailed on Slide 17. We look forward to updating you on our progress on future calls.

I'll now ask Susie to begin the Q&A.

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

[Operator Instructions] And the first question will come from Geoff Meacham with Citibank.

I just have 2 quick ones. On ALYFTREK. Just wanted to get maybe a bit of a status update. Do you think you're hitting a tipping point with regard to kind of patient switching or those that are maybe kind of new starts and just curious about the monitoring requirement, whether that's sort of eased a little bit.

And then the second thing is, as you guys look forward, Reshma, I know your nephrologist by training. So as you get closer to the pove dataset. Maybe just help us with kind of how you're thinking about the differentiation here versus the many BAFF, APRIL type of assets here? I know obviously, it's data dependent.

I want to get your high-level comments?

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

So yes, as far as ALYFTREK is concerned, I would say that the vast majority of the newly eligible patients in the U.S. have now started on ALYFTREK. And we're seeing the discontinued and transition patients transition nicely over to ALYFTREK as physicians are navigating the monitoring requirements over the first few months. The pace of transitions remain steady, and we're very happy with the progress. Outside the U.S., we're also seeing strong uptake in those countries with access.

And I would add that in the 10 months since the launch of the ALYFTREK it's generated close to $0.5 billion of sales in revenue. So overall, we're pretty happy with the pace of progress on ALYFTREK.

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

To me, if you think about IgAN and what it means, it is a chronic disease that unfortunately results in death, dialysis or transplantation, that's what ends up happening to our patients. And so what we're really trying to do here is get those autoantibodies under control in order to mitigate that end point. If you look at the disease, it's a disease of elevated APRIL levels and elevated BAFF levels. It's not the case that just one of those two cytokines is elevated.

So it makes all the sense in the world to me to inhibit both, which is what pove does. The next thing to look at is the preclinical data, and you've heard me say before, the reason we were so excited about Alpine and pove because it was specifically engineered for higher tissue distribution, potency and binding affinity. And then you translate that to the early data that we see in the clinic through RUBY-3. And it looks really good. Last thing I'll say is for patients who have this a chronic disease.

The important thing is that they have a medicine, a biologic that they can take over time that is best for them. And from all of the data, not only in market research for IgAN patients, but you look at biologics in the marketplace is about the dosing small volume. It's about having an auto-injector and monthly dosing, which are key, and that's what we have with pove. Last thing to say, I do think nephrologists are also going to be interested in the fact that we've already started our Phase 2/3 trial in membranes.

So all in all, it's pretty neat.

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

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

Yes. Let me take the pove question first, Salveen, then I'll ask Duncan to comment on the last of the 3 PBMs. So Salveen in many renal diseases, including in IgAN, there's a very strong association of correlation between reductions in proteinuria and stabilization eGFR. And I expect that, that will hold up in all of these Phase 3 data that we see.

I think the important thing to note though is that while the final end point -- that's to say even for traditional approval is eGFR showing the stabilization of eGFR. What we're really trying to do for our patients is to prevent those long-term complications of death, dialysis and transplantation, it's just that the endpoint if we measure that would take too long, so the agency has accepted eGFR stabilization of that is the fine end point. And so when you look at all of the evidence that's been generated over the course of time, the medicine that has the best reductions in proteinuria in hematuria, in this Gd-IgA1. I think that's the medicine that's going to be best for patients.

If you think about the long-term outcomes. But I do think that the association of proteinuria and eGFR will hold, and I expect that you will see that. Duncan.

Salveen, so I think it's important to note that we're building a long-term pain franchise here where, clearly, we want to secure broad access for patients, but we also want to ensure long-term value of our medicines. So we feel very happy with the progress we've made so far in securing 170 million lives for JOURNAVX in a relatively short period of time. . I would say that we're in productive ongoing conversations with the third PBM. And obviously, we'll keep you updated as we have news there.

And as you know, in the meantime, patients who are not covered can get JOURNAVX through the patient support program. So overall, we're pleased with the access progress to date. It will continue to expand over the balance of 2025 and 2026. And in the meantime, of course, a key performance indicator is continued physician uptake and prescription growth while we secure access. And on that point, although you didn't ask, I would just reference the prescription growth we saw 10,000 prescriptions in quarter 1, 90,000 prescriptions in quarter 2, 170,000 prescriptions in quarter 3, and of course, several thousand in October.

So we're very happy with the acceleration we're seeing in prescriptions while we finalize access.

Your next question will come from Jessica Fye with JPMorgan.

I was wondering if you could just touch on what your current priorities are as it relates to capital allocation and specifically on the business development front, is there a phase of development you feel as the sweet spot for assets that Vertex brings in?

Charlie?

Yes, Jessica, no change in our priorities for capital allocation. We've said for some time now, our top priority is to reinvest in the business, both internally and externally to drive innovation and growth. That continues to be true. We are investing in our pipeline right now in commercialization.

We are making capital investments in support of the business as well, and that remains the top priority. . A secondary priority for us is share buybacks. We were very active in the third quarter, taking advantage of the volatility in the stock price after the last earnings call. So we were out there buying aggressively in the quarter at prices that we think are quite attractive.

And so that combination of reinvestment in the business, as well as share buybacks will continue to be the priority going forward. In terms of whether we are looking for assets of any specific stage of development, here, I think you know with our sandbox approach, we are always looking for the best technology and the best assets in any of the disease areas where we are focused. That sometimes takes the form of enabling technology. Sometimes it takes the form of programs that are either preclinical or in the clinic.

We were certainly very happy with the Alpine acquisition last year. If we could find something like that again, we would certainly be interested but we are open to all types of deals that move our strategy forward in our different disease areas.

Next question will come from Evan Seigerman with BMO Capital.

I want to touch on the competitive profile, pove. We talked about having an auto-injector and Q4 week dosing. Can you put the context of how important this is maybe in relationship to other competitive products that could be on the market? And why you think this could give you a competitive advantage?

Yes. Evan, I'll take team that with Duncan said he can give you a commercial perspective. The auto-injector once-monthly dosing in small volumes are really, really important. Of course, this means we've already stopped through safety, efficacy benefit risk and a really good-looking clinical profile.

But especially in diseases where you're using a biologic this administration set of features just cannot be underestimated. Now I'll turn it over to Duncan to tell you about some examples in the field and maybe some market research as well, Duncan.

Yes. Thank you for the question. So I mean, I would step back a little bit and just make the point that for a variety of reasons and attributes, we believe that pove offers best-in-class potential in terms of its mechanism of action, the way it's been specifically engineered for the disease the compelling clinical profile and then as you allude to, the patient profile, the key here is that it's dosed every 4 weeks at a very low volume. It can be administered at home.

And those attributes are incredibly important, especially in biologics. They're being shown to significantly reduce patient burden, improve adherence and increased treatment satisfaction in other biologics previously launched. So -- we do think, although it sounds unimportant. Actually, this is a very important differentiator for pove alongside the mechanism of action and the excellent clinical data that we're seeing.

So we're super excited to be bringing it to market. And for all of those reasons, we do think it has best-in-class potential.

Your next question will come from Tazeen Ahmad with Bank of America.

Can you just provide some clarity on what the FDA had seen thus far that let them give you the confidence to start the filing early and get this breakthrough designation? For pove?

Yes, sure thing. So, we've had the opportunity to complete what's called a pre-BLA meeting. In other words, we've had the opportunity to sit with the agency, review all of the data to date, talk through what the filing submission, what's called the will look like. So they have access to all of our data and our plans for how we expect to be filing after we went through that meeting, that's when we got the breakthrough designation.

It's also when we received their endorsement for rolling submission. . I would say that if the reason they have granted us breakthrough enrolling is probably the same as for most medicines that get it. They see unmet need. They [ tear ] a medicine that is attractive and can treat the disease at hand and that they have enthusiasm to receive the filing so that they can plan their workload.

Your next question will come from Terence Flynn with Morgan Stanley.

Great. I was just wondering, Reshma, if there's any update on the NOPAIN Act and what you guys are doing on that front. And then I know you mentioned there's some Phase 4 data for JOURNAVX that's coming up here. Are we going to see anything on time to discharge setting? I know that's something that some physicians have asked about in the past.

Yes. Sure. Terence. On the no pain final list, it was supposed to be out on October 31. So last week Friday, and we understand that it's been postponed because of the government shutdown.

We continue to advocate vigorously for the inclusion of JOURNAVX.An as we've talked before, while the dollar number may be small for hospital outpatient or surge center for Medicare patients. We think that the principle is really important. The NOPAIN Act was literally designed for a medicine like JOURNAVX. So we continue to have our conversations, but the list -- the finalization of that list and the release of that list has been delayed.

I don't have an updated timeline for when it will be out. On the Phase IV data, we've now completed enrollment in 2 Phase IV studies. One is multimodal therapy and use prior to and post [indiscernible] aesthetic and reconstructive surgeries and another one is in orthopedic and general surgeries. The data that you're going to see later this week is in the aesthetic and reconstructive surgery area.

And the trust of the data is about opioid reduction compared to what's seen in the literature. We have a whole host of additional studies coming that look at a variety of other endpoints, including discharge, but those data are not ready just yet.

Your next question will come from David Risinger with Leerink Partners. .

I'm Edward calling on behalf of David Risinger. So 2 questions, please. For JOURNAVX, how many of the 170 million lives have unrestricted access and how many commercial lives are covered by the major PBMs. And the second question on the next-generation CF candidate VX-828. Can You provide more details on the PPP news ahead and also the timing for data disclosure?

Let me take the VX-828 question first, and I'll turn it over to Duncan to talk to you about JOURNAVX. So on VX-828, the important thing to know is it is the most efficacious medicine in vitro that we had ever studied and you know that our in vitro systems in CF have translated time and again, not only qualitatively but quantitatively to what we see in the clinic. So 828 is the most efficacious that we've seen so far. You should expect to see data next year.

We're in the patient cohort now. I'll give you more specific time lines in the coming months, but you should see data next year. And in terms of what we're looking for, look, it is getting hard to do better than what we have today. The data that I described at TRIKAFTA 1- to 2-year-old is truly remarkable and unprecedented.

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

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

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

Next question will come from Philip Nadeau with TD Cowen.

Two commercial questions for us. First, on JOURNAVX, based on prescription trends and the prescription numbers that you said, it seems like gross to net continues to be quite high. Can you give us a sense of where it currently is and where it could be in 2026? And then second, on ALYFTREK, you said a couple of times steady transition from TRIKAFTA to ALYFTREK.

When do you think you'd be in a position to give formal guidance, say, 3 years from now, some percentage of TRIKAFTA patients will be transitioned to ALYFTREK?

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

Yes.Phil. So the 3 drivers, of course, gross to net are payer discounts, wholesaler discounts and the impact of the patient support program with that last one being most significant in 2025. While we are working to expand payer coverage and finish some of the contracting work that Duncan talked about, the patient support program continues to be very active, and that's resulting in elevated gross to net for the time being. We're not yet ready to give guidance for 2026 on that until we've landed on the mix and the book of business with payers. I think it would be early to say anything about that for next year.

Your next question will come from Paul Matteis with Stifel.

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

Yes. The -- no new updates for you on suzetrigine in the peripheral neuropathic pain area. We are hyper-focused on getting our DPN study #2 up and running to secure the DPN indication, which -- for which there is a clear pathway concrete next steps for us to take and an ability to serve 2 million patients. With regard to our ideas for how to expand to the broader P&P market, there's a couple of things there. .

We're working through what we believe would be the most efficient way to get there. We're also thinking through time lines for our NaV1.8 inhibitors, i.e., JOURNAVX and our NaV1.7s and the possibility of combination. So more to come on that. PNP remains very interesting to us.

But the focus now is on securing the DPN indication, getting the second DPN study diabetic peripheral neuropathy study up and running. And I do think that we'll be completing both those studies by the end of next year.

Your next question will come from Gena Wang with Barclays.

So maybe I would just have one quick question regarding the Poly data later this week. I know you cannot disclose anything. Regarding the actual data. But just wondering, given if we look at Vera data, they're already setting eGFR, but are pretty high, basically flat or the slow is relatively I think a slope is minus 0.1%.

So here, do you think with your drug profile, do you think it could actually improve the eGFR over the longer treatment?

Yes. Gena, I do understand your question. I think -- you'll be pleased with the data that we show at ASN later this week, I certainly am. I would say the same thing that I said to Salveen reductions in premier in a number of homogeneous renal diseases with proteinuria that translated to stabilization of eGFR.

And so I think that, that will happen. I think the more important question is, over the long term, as we treat our patients with IgAN or membranous and we have medicines that can get patients to lower levels of proteinuria completely eliminate if not decrease, hematuria, gets a low levels of these [indiscernible] Gd-IgA antibodies. I think that's where we're going to see practice move. And I think you're already seeing that with KDIGO guidelines, for example.

I won't jump ahead of the data coming at ASN, but you will see eGFR data from the Povetacicept IgAN program.

Your next question will come from Mohit Bansal with Wells Fargo.

And I would also emphasize or asked a question around the BD here. I would love to understand your thought process here given that, I mean, you said that if we find something like pove, we would go for it. I think the only challenge is that Vertex is not a small company anymore. So maybe is there a -- is there a chance that you would look at bigger deals in that $5 billion to $10 billion range as well?

Or given your cash position, you think you would probably be nimble and small when it comes to BD at this point?

This is Reshma. Sorry, sorry. I'm sorry. I think Charlie summarized it really well.

Our BD strategy is very much in lockstep with our internal innovation strategy. It's all about the Sandbox diseases and our approach to R&D, high unmet need, the biomarkers that translate from bench to bedside as well as targets that are validated, be it a genetic or pharmacology efficient clinical development and regulatory pathways and specialty markets. That is the -- those are the guiding principles that have led us to where we are. And you can bet that we're going to keep going with the same.

It's not about the size. It's all about fit with R&D strategy.

The next question will come from Myles Minter with William Blair.

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

Yes. Let's maybe do CASGEVY first. For all of the clinical trial patient data, whether it's in the primary, let's call it, the primary sickle cell disease and beta thal studies [ CLIN 1 ] and [ CLIN 2 ] or if it's in the long-term follow-up study, they get reported through the clinical trial system. For commercially treated patients, they get reported as physicians may report through to either the company or to the FDA in the normal manner.

DM1 is an exciting program for us. You might recall that the way we set up the study in order to be most efficient and fastest to pivotal development if the data are supportive, is we did a SAD/MAD directly in patients. We've completed the SaaS portion of DM1, and we're in the MAD portion now. I expect that we'll be able to complete the study and have results next year.

And what that means is because we are in patients, it will be safety and efficacy.

Last question. The last question of the day will come from William Pickering with Bernstein.

I have 2 about pove and pMN if I may. The first is if you could discuss the competitive landscape in that indication and perhaps compared to IgAN? And then the second is how you define the pMN addressable market. I think that Biogen has estimated only 36,000 patients in the U.S., which seems a bit more conservative than your combined U.S. and EU number would imply?

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

It's a really significant disease in Asia I think the estimates are something like 300,000 in the Western world, while membranous is more like 150,000 in the Western world. The competitive landscape is also different much more competitive intensity in IgAN nephropathy, likely because it's a larger patient population. To the best of my knowledge, we're the only APRIL/BAFF, for example, in pivotal development for membranous. And I do think exactly for the reason that these are both B cell-mediated diseases, I think a drug like Poly has best-in-class potential in membranous.

And in the APRIL/BAFF class, we're in the lead because we are already initiated in the Phase 2/3. I hope that helps.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

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

Yes, ma'am. The conference has now concluded. Thank you for attending today's presentation. A replay of today's event will be available shortly after the call concludes by dialing 1 (877) 344-7529 or 1 (412) 317-0088. Using replay access code 101-96553. Thank you for your participation. You may now disconnect.