On July 29, 2021 Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) reported consolidated financial results for the second quarter ended June 30, 2021 and raised full-year 2021 guidance for product revenues to $7.2 to $7.4B (Press release, Vertex Pharmaceuticals, JUL 29, 2021, View Source [SID1234585369]).
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"In the second quarter of 2021, we saw continued, significant growth and strong business performance in our cystic fibrosis franchise. We have now secured reimbursement agreements for the triple combination in more than 15 countries outside the U.S. and started expansion into younger age groups with the U.S. approval in patients 6 to 11 years of age last month. With these advancements, we are poised to reach more patients in 2021 than previously forecasted and are therefore raising our 2021 revenue guidance. Looking forward, we continue to see significant growth ahead in CF, with more than 30,000 CF patients who may benefit from the triple combination but who are not yet treated," said Reshma Kewalramani, M.D., Chief Executive Officer and President of Vertex.
"We also made important progress with our pipeline programs in the first half of this year. Our pipeline programs are advancing quickly, with five programs in mid- or late-stage clinical trials. We continue to see impressive clinical results with CTX001, our most advanced program outside of CF, in which we have now dosed more than 45 patients. Our pre-commercial efforts for this program are underway, as we prepare to serve patients with sickle cell disease and beta thalassemia and address the significant market opportunity. We look forward to multiple R&D milestones and data readouts in the coming 6 to 9 months," said Dr. Kewalramani.
Product revenues increased 18% compared to the second quarter of 2020, primarily driven by the uptake of KAFTRIO in Europe and continued strong performance of TRIKAFTA in the U.S. Net product revenues in the second quarter of 2021 increased 4% to $1.26 billion in the U.S. and increased 71% to $536 million outside the U.S., compared to the second quarter of 2020.
GAAP net income decreased compared to the second quarter of 2020, primarily due to a $900 million payment in connection with the amendment of Vertex’s collaboration with CRISPR Therapeutics that was recorded as a GAAP R&D expense in the second quarter of 2021.
Non-GAAP net income increased compared to the second quarter of 2020, largely driven by strong growth in product revenues.
Cash, cash equivalents and marketable securities were $6.71 billion, an increase of $49 million compared to $6.66 billion as of December 31, 2020, primarily driven by strong operating cash flow from Vertex’s revenue growth and profitability, and offset by the $900 million payment to CRISPR and repurchases of our common stock authorized under our 2020 share repurchase program.
Combined GAAP R&D and SG&A expenses increased compared to the second quarter of 2020, primarily due to the $900 million payment to CRISPR in the second quarter of 2021.
Combined Non-GAAP R&D and SG&A expenses increased compared to the second quarter of 2020, primarily due to the expansion of Vertex’s pipeline in CF and other disease areas and incremental investment to support the global launches of Vertex’s medicines.
GAAP income taxes reflected an increased benefit compared to the second quarter of 2020, primarily due to the income tax impact of the $900 million payment to CRISPR partially offset by a decrease in discrete tax benefits. Please refer to Note 2 for further details.
Non-GAAP income taxes increased compared to the second quarter of 2020 primarily due to Vertex’s increased operating income.
Full-Year 2021 Financial Guidance
Vertex today increased its full-year 2021 product revenue guidance based on strong year-to-date performance and the expected impact of recent reimbursement agreements. Vertex’s guidance is summarized below:
Cystic Fibrosis (CF) Marketed Products
Vertex anticipates that the number of CF patients treated with our medicines will continue to grow as we enter into additional reimbursement agreements, achieve new approvals for the treatment of younger patients, and expand treatment options for the approximately 10 percent of patients who do not benefit from CFTR modulators, all of which will lead to continued growth of our CF business in the years ahead.
In June, the U.S. FDA approved expansion of the indication of TRIKAFTA (elexacaftor/tezacaftor/ivacaftor and ivacaftor) to include children with CF ages 6 through 11 years. Health Canada granted Marketing Authorization for TRIKAFTA for people with CF ages 12 years and older who have at least one F508del mutation. TRIKAFTA/KAFTRIO is now approved and reimbursed or accessible in more than 15 countries outside the U.S., including Italy and France.
R&D pipeline
Vertex continues to progress a broad pipeline of potentially transformative small molecule, cell and genetic therapies aimed at serious diseases. Recent and anticipated progress for key pipeline programs is noted below:
Cystic Fibrosis
Vertex recently announced plans to initiate Phase 3 studies of the next-in-class, once-daily triple combination of VX-121, tezacaftor and VX-561 in the second half of 2021. Clinical and preclinical data suggest that this triple combination has the potential to provide enhanced benefit for people with CF who have the F508del mutation on at least one allele.
The Phase 3 program will consist of two 48-week trials, which will evaluate the safety and efficacy of the new combination relative to TRIKAFTA in a total of 800 patients. Both studies will measure the regulatory-enabling endpoint of absolute change in ppFEV1, a measure of lung function, that will be analyzed for non-inferiority to TRIKAFTA. Both studies will also assess absolute change from baseline in ppFEV1 and sweat chloride for superiority to TRIKAFTA.
Beta Thalassemia and Sickle Cell Disease
Based on the compelling data generated with CTX001, in April, Vertex and CRISPR Therapeutics announced an amendment to their collaboration for CTX001. In connection with the completion of the transaction in June, Vertex made a $900 million upfront payment to CRISPR.
Data from 22 patients with at least three months of follow-up after CTX001 infusion were presented at EHA (Free EHA Whitepaper) in June and continued to build the profile of a one-time functional cure for patients with transfusion-dependent beta thalassemia (TDT) and severe sickle cell disease (SCD), showing consistent and durable benefit with longer term data from a larger population of patients.
Enrollment and dosing are ongoing in the clinical studies for CTX001 and more than 45 patients have been dosed across the program to date. Vertex anticipates achieving target enrollment in both studies in the third quarter of 2021, with regulatory filings possible in the next 18 to 24 months.
APOL1-mediated Kidney Diseases
Vertex is evaluating the potential of inhibitors of APOL1 function to treat people with APOL1-mediated kidney diseases.
Enrollment is ongoing in a Phase 2 proof-of-concept study designed to evaluate the reduction in proteinuria in people with APOL1-mediated focal segmental glomerulosclerosis (FSGS) following treatment with VX-147.
Data from this study are expected in the second half of 2021.
Pain
NaV1.8 is a genetically and pharmacologically validated novel target for the treatment of pain, and Vertex has previously demonstrated clinical proof-of-concept with a small molecule investigational treatment targeting NaV1.8 in multiple pain indications including acute pain, neuropathic pain and musculoskeletal pain. Vertex’s approach is to selectively inhibit NaV1.8 using small molecules with the objective of creating a new class of medicines that have the potential to provide superior relief of acute pain without the limitations of opioids, including their addictive potential. VX-548 is the most recent molecule to enter clinical development from Vertex’s portfolio of NaV1.8 inhibitors.
Vertex announced in July that the VX-548 Phase 2 acute pain program has been initiated. The proof-of-concept trial for acute pain following bunionectomy surgery is open for enrollment, and the VX-548 trial following abdominoplasty surgery will commence in the coming weeks.
Data from the bunionectomy trial are expected by early 2022.
Type 1 Diabetes (T1D)
Vertex is evaluating a cell therapy designed to replace insulin-producing islet cells in people with T1D. Vertex is pursuing two programs for the transplant of stem cell-derived, fully differentiated, insulin-producing islet cells into patients: 1) transplantation of islet cells alone, using immunosuppression to protect the implanted cells and 2) implantation of the islet cells inside a novel immunoprotective device.
A Phase 1/2 clinical trial for VX-880, the islet cells alone program, is ongoing in people with T1D. The first patient in this study has been dosed, and initial data from this study are expected in 2022.
Alpha-1 Antitrypsin (AAT) Deficiency
Vertex continues to evaluate small molecule correctors of zAAT protein to target the underlying cause of AATD, and thereby address both lung and liver manifestations of the disease.
Vertex plans to advance one or more novel small molecule zAAT correctors into the clinic in 2022.