Vertex Announces Q2 2024 Financial Results, Raises Full-Year Product Revenue Guidance
Vertex today reported consolidated financial results for the second quarter ending June 30, 2024, and increased its full-year product revenue guidance to $10.65 to $10.85 billion.
“Vertex achieved another strong quarter of revenue growth with excellent execution across the business, prompting us to raise our full-year product revenue guidance,” said Reshma Kewalramani, M.D., CEO and President of Vertex. “Our focus for the remainder of the year is on commercial execution in CF and the global launch of CASGEVY, while preparing for the potential launches of the vanzacaftor triple in CF and suzetrigine in acute pain. We are also rapidly advancing a robust pipeline that promises long-term value for patients and shareholders.”
Second Quarter 2024 Results
Product revenue increased 6% to $2.65 billion compared to Q2 2023, driven primarily by the continued strong performance of TRIKAFTA®/KAFTRIO®, especially among younger age groups. Net product revenue in the U.S. rose 7% to $1.61 billion, while international net product revenue increased 5% to $1.03 billion.
Combined GAAP and Non-GAAP R&D and SG&A expenses were $1.3 billion and $978 million, respectively, up from $1.0 billion and $928 million in Q2 2023. These increases reflect heightened investments to support global launches of Vertex’s therapies and the advancement of multiple mid- and late-stage clinical development programs.
Acquired IPR&D expenses skyrocketed to $4.4 billion from $111 million in Q2 2023, due to Vertex’s acquisition of Alpine Immune Sciences.
GAAP and Non-GAAP effective tax rates were (6.0)% and (10.0)%, respectively, compared to 21.2% and 21.0% in Q2 2023. This shift is primarily due to non-deductible AIPR&D expenses, resulting in a pre-tax loss for Vertex in Q2 2024. Please refer to Note 1 for further details on Vertex’s GAAP to Non-GAAP tax adjustments.
GAAP and Non-GAAP net losses were $3.6 billion and $3.3 billion, respectively, compared to net income of $916 million and $1.0 billion in Q2 2023, largely due to the Alpine AIPR&D expense.
As of June 30, 2024, cash, cash equivalents, and total marketable securities were $10.2 billion, down from $13.7 billion on December 31, 2023, due to the cash consideration for acquiring Alpine, partially offset by positive cash flows from other operating activities.
Full Year 2024 Financial Guidance
Vertex has raised its full-year product revenue guidance from $10.55-$10.75 billion to $10.65-$10.85 billion. This includes expectations for continued growth in CF and the launch of CASGEVY® in approved indications and geographies. Given the Alpine acquisition’s impact, Vertex now provides guidance for both combined GAAP and Non-GAAP R&D and SG&A expenses and AIPR&D expenses for 2024. The company continues to expect combined Non-GAAP R&D and SG&A expenses to range between $4.2 billion and $4.3 billion for the year. This includes ongoing investments in mid- and late-stage clinical programs, commercial and manufacturing capabilities, and Alpine operating expenses for the rest of 2024. Vertex now anticipates 2024 AIPR&D expenses to be approximately $4.6 billion, including the Alpine acquisition charge in Q2 2024.
Vertex’s updated financial guidance is summarized below:
| Financial Metric | Current FY 2024 | Previous FY 2024 |
|---|---|---|
| Total product revenues | $10.65 to $10.85 billion | $10.55 to $10.75 billion |
| Combined GAAP R&D and SG&A expenses (2) | $5.0 to $5.2 billion | $4.8 to $5.0 billion* |
| Combined Non-GAAP R&D and SG&A expenses (2) | Unchanged | $4.2 to $4.3 billion* |
| AIPR&D expenses | $4.6 billion** | $0.125 billion |
| Non-GAAP effective tax rate | ~100%*** | 20% to 21% |
*Guidance ranges provided on May 6, 2024, included combined GAAP R&D, AIPR&D, and SG&A expenses of $4.9-$5.1 billion and combined Non-GAAP R&D, AIPR&D, and SG&A expenses of $4.3-$4.4 billion, with approximately $125 million for AIPR&D expenses.
**Includes Alpine AIPR&D expense of $4.4 billion.
***Vertex’s full-year Non-GAAP tax rate is impacted by the Alpine AIPR&D expense, which is non-deductible for tax.
Key Business Highlights
Marketed Products and Potential Near-Term Launch Opportunities
Cystic Fibrosis (CF) Portfolio:
Vertex expects growth in CF patients taking its medicines through new approvals and reimbursement for younger patients. Highlights include:
- The FDA accepted the New Drug Application (NDA) for the once-daily vanzacaftor triple for people with CF aged 6 and older, assigning Priority Review with a PDUFA target action date of January 2, 2025. Similar submissions have been validated by the EMA and MHRA, with further submissions in Canada, Australia, New Zealand, and Switzerland.
- Vertex extended a long-term reimbursement agreement with NHS England for KAFTRIO, SYMKEVI®, ORKAMBI®, and KALYDECO®, providing access to current and future eligible CF patients. Similar agreements exist in Wales, Northern Ireland, and Scotland.
- The European Commission approved KALYDECO for infants with CF aged 1 month to less than 4 months with specific CFTR gene mutations, the first such approval in Europe.
- Health Canada approved TRIKAFTA for CF patients with 152 rare responsive mutations, marking the first approval outside the U.S. based on in vitro data.
- Regulatory applications for TRIKAFTA/KAFTRIO for rare responsive mutations have been submitted to the FDA and EMA.
CASGEVY for Sickle Cell Disease (SCD) and Transfusion-Dependent Beta Thalassemia (TDT):
CASGEVY is approved in multiple regions, including the U.S., Great Britain, the EU, KSA, and Bahrain, with ongoing launches.
- Regulatory submissions are complete in Switzerland and Canada, with Priority Review in Canada.
- More than 35 authorized treatment centers (ATCs) are active globally, with increasing patient participation.
- The French National Authority for Health (HAS) approved early access programs (EAPs) for CASGEVY for SCD and TDT.
- Vertex continues to generate positive long-term data from CLIMB-111, CLIMB-121, and follow-up studies, confirming CASGEVY’s durable clinical benefits over time.
Suzetrigine (VX-548) for Acute Pain:
Suzetrigine is being developed as a new class of pain medication.
- The FDA accepted the NDA submission for suzetrigine for moderate-to-severe acute pain, granting Priority Review with a PDUFA target action date of January 30, 2025. The drug has also received Fast Track and Breakthrough Therapy designations.
Select Clinical-Stage R&D Pipeline:
Cystic Fibrosis:
- Vertex is advancing next-in-class small molecule CFTR modulators and a nebulized mRNA therapy.
- The Phase 1/2 study of VX-522, a nebulized mRNA therapy, is ongoing, with data expected in the first half of 2025.
Sickle Cell Disease and Transfusion-Dependent Beta Thalassemia:
- Phase 3 studies of CASGEVY in children aged 5 to 11 with SCD or TDT are ongoing.
- Preclinical assets for gentler conditioning for CASGEVY are in development.
Acute Pain:
- A Phase 1 trial for an intravenous formulation of VX-993 is ongoing.
- A Phase 2 study of VX-993 for moderate-to-severe acute pain following bunionectomy surgery is set to begin.
Peripheral Neuropathic Pain (PNP):
- Phase 3 trials for suzetrigine in patients with painful diabetic peripheral neuropathy (DPN) are set to begin.
- A Phase 2 study of suzetrigine in painful lumbosacral radiculopathy (LSR) is expected to yield results in late 2024.
- A Phase 2 study of VX-993 for DPN is set to start.
APOL1-Mediated Kidney Disease (AMKD):
- The Phase 3 trial of inaxaplin for AMKD is ongoing, with a pre-planned interim analysis at Week 48.
IgA Nephropathy (IgAN) and Other B Cell-Mediated Diseases:
- The Phase 3 trial of povetacicept in IgAN (RAINIER study) is set to begin.
- Phase 2 basket trials (RUBY3 and RUBY4) are ongoing, with data readouts expected in late 2024 and into 2025.
Type 1 Diabetes (T1D):
- VX-880, a cell therapy for T1D.
