Well, thanks, everybody, for joining us. I'm Terence Flynn, the U.S. Biopharm analyst here at Morgan Stanley, and we're very pleased to be hosting Vertex for this session. Today, from the company, we have Reshma Kewalramani, who's President and CEO, and Charlie Wagner, who is CFO. Thank you both so much for being here. Appreciate the time today. Before we get started, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that out of the way, Reshma, again, you know, we had the opportunity to speak last night and again got a kind of great overview of the company. So I guess the question I wanted to start with was more one on strategy. Obviously, part of, you know, your mandate, the team's mandate, has been the diversification strategy here that's been well underway for, for a number of years now, to position the company beyond cystic fibrosis, and we were just talking about the number of medical conferences that, you know, the team is, is attending now versus just going to the cystic fibrosis conferences. So maybe just give us an update on kind of where we stand with the diversification progress, and what are some of the next milestones that we should be focused on here over the next 12 months or so? Certainly. Well, first of all, thank you for the invitation. It's nice to be in New York, and it's certainly very nice to be here live. We have been a CF company for 20-plus years, in the commercialized sense, since 2012, and the availability of KALYDECO, and we aim to be, and we intend to always be a CF company. That is going nowhere. But going forward, we're gonna be a CF plus company, and that plus starts with... And we've been talking for some time about the fact that we've been preparing for the day when we're gonna have a CF franchise, and just as we transform CF, our aim is to transform multiple more diseases. The first next disease after cystic fibrosis is going to be Sickle cell disease and Beta thalassemia with exa-cel, and then there are a whole host of additional diseases that we are in, in terms of not only clinical stage, but in terms of post proof of concept, like acute pain, like Type 1 diabetes, like AMKD with VX-147. And so when you look at the company from a 30,000-, 40,000-foot view, we started this diversification effort in full zeal, circa 2014, 2015, and the big goal was to be in multiple diseases, check. Multiple modalities, we're now in eight modalities, depending on exactly how you count, check. And we want to be in a place where we are the leaders in CF and in CF have line of sight to that last 10%, so the last 5,000-6,000 patients who can't benefit from CFTR modulators because they simply don't make any protein. For the first time, I can say, check, we have the program with Moderna for those last patients. And so when you look at it, we said this is where we wanted to be, this is where we were planning to be, and this is where we are today. Okay, great. And I know we're gonna unpack a lot of, a lot of these programs over the next 30 minutes or so. Maybe first we'll just start on the CF franchise, because again, it's been so integral to the company's growth here. As we look forward, obviously, you have the next gen triple coming as well, which is going to be part of the strategy, but maybe what are the additional growth opportunities kind of on the kind of near to medium term before we have that next gen triple? Definitely. Charlie? Yeah, and maybe, maybe even just ground that in the current year. Sure. We recently increased our revenue guidance in CF to a range of $9.7 billion-$9.8 billion. Sets us up for another very strong year. That's growth of 9%-10%, even after a 150 basis point headwind from currency. So we've come into the year with a lot of momentum, continue to execute very well. The growth in 2023 is really driven by the annualization of patients. We had a number of new reimbursements and launches last year. That carries into this year with great momentum. Additionally, we've had the approval in the 2-5 age group in the U.S. That launch has gone really well, and we would expect to have approval in Europe in the 2-5 age group later this year. This strategy of new reimbursements, younger age groups, has been driving the growth. Looking ahead, you know, obviously, we said we started the year with about 20,000 patients or so, who are not yet on therapy, so we're making a dent in that this year. But importantly, the patient population continues to grow. We've now updated our estimate of a CF patient population a couple of times in the last few years, and the reality is, with the availability of a medicine like TRIKAFTA, more people are coming forward, registries are getting better, and patients are living longer. So I would expect that we will continue to update our estimate of the patient population, in future years. And so with a continuation of that strategy, plus our work on an mRNA therapy for the 5,000 or 6,000 patients who don't produce the protein, we see many years of further growth in CF from here. Okay, great. Maybe just moving on to the vanzacaftor triple. We're gonna see data early next year from the phase 3 program. Maybe just help to frame for us what's a successful outcome here as we think about that, the, those two phase 3 trials? Yeah, absolutely. So, if you're wondering, what are we trying to accomplish? What are the big goals in CF? They're really threefold. First, get a medicine that can treat the 90% of all CF patients who can respond to a CFTR modulator, and that goal was achieved by way of TRIKAFTA. Before that, we couldn't reach the F/MF patients, as they are called. The second big goal, and that goes directly to Terence's question about vanzacaftor. The second big goal is for those 90% of patients who can benefit from CFTR modulators, get them to carrier levels of sweat chloride. Why? Because at carrier levels of sweat chloride, so think about the parents who are carriers but have children with CF, they have virtually no manifestation of disease. So that's big goal number two. Big goal number 3 is get a therapy for those last 10% of patients. Focusing on vanzacaftor. Vanzacaftor, let's call it the next, next generation CFTR modulators. By way of our in vitro data in our HBE cells, which have been the workhorse assays that have not only qualitatively predicted what happens in the clinic, but quantitatively predicted it, the vanzacaftor triple looks to be even better, and I know this is a tall order, but it looks to be even better than TRIKAFTA. In the clinic, in phase 2, you have to do some cross-study comparisons, but the vanzacaftor triple looks to be even better than TRIKAFTA. The additional benefit is of once-a-day dosing. I do not think that's the be-all, end-all. Our patients take many dozens of medicines a day, so I don't think that's the be-all, end-all, but I think it can help with compliance, and so it's a positive. And for the company, it has a lower royalty burden than the TRIKAFTA triple. So that's what I see there. And in terms of when are we gonna see results, we have completed enrollment, and it's important to note that this is a study that's not only in 12+, this program is a 6+-year-old study and program. So the results that we're gonna see, the studies have finished enrollment. They're gonna finish dosing in the tail half of this year, with results early next year. We're gonna see that for the 12+-year-olds, we're gonna see that for the 6+-year-olds, and that's sort of what you should expect in the coming few months. Okay, great. I know we've talked about this before, but just as we think about the lung function versus sweat chloride, those are the two metrics that everyone looks to. Lung function, patients perceive that, but again, to your point, getting to normal sweat chloride levels has been another part that, you know, maybe physicians are also focused on. So how do you think about the relative importance of those two efficacy endpoints in these studies? Yeah. You know, it's an excellent question, and it's been debated in the literature, amongst physicians and the CF community, this idea of whether there is or is not a ceiling effect to the improvement in lung function, right? So patients, generally speaking, enter the clinical trials with, say, ppFEV1 of, let's say, 60% or so. So when you give the addition 13%, 14, let's round to 15%, the acute improvement brings you to a lung function of 75%. And what we've shown in the real world trials of TRIKAFTA, which is now 4 years in the market, is not only is there no decrement in lung function, it's actually the first time that's ever been shown, even amongst the other CFTR modulators in our portfolio. So you maintain that improvement that you derive from the acute benefit, but we markedly reduce hospitalizations, pulmonary exacerbations. And at the European CF meeting earlier this year, a Swiss physician was telling us that in the country of Switzerland, there were no lung transplants in CF patients. So there are these tremendous benefits that we're looking at. So if you ask me, what is the direct readout of an improved CFTR modulator in our hands and that I think will help patients? I think the most direct readout, the most direct PD readout, is indeed on sweat chloride. And so we have measured that. It's part and parcel of the Phase III program. The main comparison, the primary endpoint, is non-inferiority on ppFEV1. Why? Because that's the regulatory-enabling endpoint. You must do that, and we're certainly gonna look at sweat chloride, and that's where I think there is opportunity, just like there was in phase II. Yep. And I guess the related question is just obviously it depends on the efficacy data, but as you think about, like, analogs for potential conversion of the market, I think that's something else that investors are trying to understand is obviously it ties back to the data, but maybe just anything to think through as we think about what that could look like over the back half of the decade. Absolutely. I'll ask Charlie to comment on if the profile is what we think it is, how is that gonna work in the marketplace? And, Charlie will probably also comment on some patients who are not on TRIKAFTA, who we think will come on to Vanza. Sure. Yeah, obviously, again, it will depend on the profile, but there are about 6,000 patients who were previously on CFTR modulators who've discontinued for one reason or another. That's a relatively small number of the total number of patients, but with any medicine, there's some discontinuation. We think that there's an opportunity for those folks to come back on, and what we have seen when new medicines are introduced, a number of patients are inclined to come back and try again. So, really excited about this as an opportunity for those who've discontinued. Okay. I'll add just, Terence- Sure. You know, this is a disease that is obviously a genetic disease. It runs in families. Children have this. The patient community is acutely aware of drug development and want to avail themselves of the best medicine out there. We saw that when TRIKAFTA came, and I think we're going to see the same. If the Vanza program has a better benefit risk, if it has more efficacy, I think the same thing's going to happen here. Okay, great. The other program you mentioned, your opening remarks is VX-522, the- mRNA program, which would target those or be a therapy for those patients that don't make any protein. So again, I know the company's been working at this for a long time. So maybe just remind us of, you know, the current trial, when we might see some data, and then where your confidence is coming, 'cause I know- It's been a very hard problem to, to solve for a number of, of reasons, including delivery. Yeah. Yeah. So this program, VX-522, is also in CF. This is that last 10%, so 5 or 6 thousand people. We have a partnership with Moderna, and our approach involves an LNP with an mRNA. For these last 5, 6 thousand patients, some nucleic acid therapy is going to be required because they simply don't make any protein that we can correct. We've been working on this, with Moderna for many years, and actually, the RNA construct, we've solved that for 2+ years. The real challenge and the last mile on this one has been delivery, and that's what we've cracked in the last 18 months or so, which has led to the program, which is the VX-522 program, in patients already in the clinic. There's a single ascending dose component. That's where we are today. After we complete that, we'll be in the multiple, ascending dose component, and I do think that it's going to take multiple dosing to evaluate efficacy. Everyone asks me, when are we going to be able to see some results? Never say never, and, you know, our CF programs have surprised us in the past, but I do think to see efficacy, it's going to take more than one dose. So I think it's a 24 event. Where do we get the confidence from? Well, we go back to our HBE workhorse cells. We've been able to look at the mRNA construct in exactly those cells, which have... We have done, I think, six programs now, including two that we didn't advance to phase 3 because we had two better ones. But we have trained this model and seen this model over years, over 6 molecules. The mRNA construct performed extremely well in our HBE assay. We've also looked at this with the LNP and delivered to small animals and large. We get to the appropriate cells with the appropriate expression. And so when we think forward about the possibility of this program, I have great enthusiasm for it, and my confidence comes from those preclinical experiments, particularly the HBE assay. Okay, perfect. Maybe now we'll pivot to the, you know, some of the other non-CF programs. Sure. Again, that's part of the longer-term strategy here. Pain has been front and center, I think, for a number of investors, given you've been working on this for a long time, but we're approaching the phase III data now, late this year, early next year. So maybe just again, you know, give us a recap of the phase II data. Those were recently published in the New England Journal of Medicine, and you know, why you are confident moving into a broad phase III program. We're conducting three phase III trials in the acute setting. Yeah, yeah, yeah. So, you know, we just spent the last 10 minutes or so talking about cystic fibrosis. We've been working on that for 20 years in the San Diego site. It turns out that the San Diego site is the exact same site, and it's actually the same group of researchers who've been working on our pain program, and they've been working on pain longer than we've been working on cystic fibrosis. So it is a tough nut to crack. But it's also that target, NaV1.8, which is what we're talking about for the VX-548 program, and its counterpart, NaV1.7. They are considered the holy grail of pain, and they're considered the holy grail of pain because they're found in C fibers. They're responsible for the activation and the propagation of the action potential, which carries pain signals from the periphery to the center. The reason it's really seen as this holy grail is you can hopefully, and what we've already shown in phase II trials, you can decrease pain in the periphery. This is not a centrally acting drug. There are no known NaV1.8 receptors in the brain, and therefore, you could have pain relief without the addictive potential or the other side effects of opioids, for example. We've been very excited about this program. It is an exceptionally large population, whether you look at acute pain or neuropathic pain, the two indications that we're very focused on. And for that reason, it's not only important to have excellent pain relief, it's important to have a drug that has great manufacturability, great drug-drug interaction profile, ability to take with food or without food, because obviously, acute pain patients may be coming out of surgery. While our predecessor, Molecule 150, showed very good efficacy and safety, we did not advance that, preferring to wait for what I used to call the perfect molecule, and that's what I see VX-548 as. Phase II is complete. The results were presented in the New England recently. Phase III will complete all three studies, a study in bunionectomy, a study in abdominoplasty, and a study, a single arm, let's call it an all-comer study, tail end of this year, with results either end of this year or early next. And where does my confidence, enthusiasm come from? Three lines of evidence. First, the target is a genetically validated target, and it's pharmacologically validated by VX-150.... Second, we did the exact same studies that we're doing in Phase 3, just Phase 3 is bigger, but it's the exact same study, one in bunionectomy, one in abdominoplasty, and we've already demonstrated that it works in both of those conditions. And the third is the predicate of 150 itself. Usually people ask me then about the acute pain studies and neuropathic pain and, and how do you feel about them? I'm equally confident, equally enthusiastic about both of those because of those predicate points. Yep. Perfect. And again, the other, you know, in the New England Journal, there's this editorial, and I wanted to give you guys an opportunity to address some of the points raised. There's a question about rescue medication, onset of action, and need for combination. So again, I know combination, you're working on 1.7, as yo mentioned. Seems pretty straightforward, but maybe those other two points, just anything to add in terms of, you know, how you'd respond to that editorial? Yeah. I think it's a testament to the program, to the target and to the data that the New England Journal published it. If you look at the data, I think they speak for themselves. You always can find something to ask a question about, provide a critique on, but the bottom line is we have a raging opioid epidemic in the country. We have the desire to use non-opioid medicines. We have no non-opioid medicines. So I think the big news here is we have potentially the first new class of pain medicines in three decades that look to have a very good efficacy profile, very good benefit risk profile, and there are always things we can do better. Yep. And that's maybe one commercial question is just the profile. So maybe just remind us of what you're hoping in phase 3, 'cause the question we get a lot is: Do you need to actually beat opioids to make this a commercially successful opportunity, or is just showing equivalent efficacy enough? So maybe help us think through the commercial implications of the data when we see it. Sure. Let me ask Charlie to outline the acute pain market first, and I'll come back and tell you a little bit about what we're expecting from this study. Yeah, part of the enthusiasm, obviously, for the program is we see it as a significant opportunity. The acute pain market today is, we estimate, north of $4 billion, and that's at generic pricing. So the opportunity for a medicine with a superior profile, we think, is very significant. We've further drilled down and looked at the dynamics of the market, where prescribing happens, again, north of 1 billion, 1.5 billion treatment days in the U.S., two-thirds of that influenced either in a hospital or surgical center or at time of discharge, which gives us comfort in the ability to serve that market with our specialty commercial model. We think with the number of hospitals and the number of IDNs, a sales force, you know, in the range of 100-200 people is going to be sufficient to serve that market in the U.S. So that makes it very Vertexian and a great fit for our approach overall. In terms of the profile? In short hand, if we see what we saw in phase 2, it's a home run. Okay, great. What... I guess one question always with CNS-type studies, the companies run multiple studies because sometimes there could be placebo effects, et cetera. So what's the- what's kinda like the minimum number of those three trials that you'd need to secure an approval? Yeah. It's a really good point. When you're working in depression or in pain, even in schizophrenia, the placebo effect is real, and it's something that you have to be very careful about when you're designing your studies. For our program, we're looking for a positive result, and when I say positive, the primary endpoint in the abdominoplasty and bunionectomy studies is the high dose from phase 2, the VX-548 high dose, versus placebo on pain relief, this measure called SPID-48. So we're looking for those primary endpoints. And the single-arm safety and effectiveness study is there because in our conversations with the FDA, our goal and the label we seek is a broad, moderate to severe acute pain label. We're not seeking a label that's post-bunionectomy or post-abdominoplasty or post-surgery or anything like that. It's a broad, moderate to severe acute pain label, and that's what that single-arm study is there for. Let's call it an all-comer study. If you have a fracture, if you have a sprain, whatever pain condition you have, that's what's there for. Okay. Understood. You're also running the phase 2 neuropathic pain study. Maybe similar question, just, you know, timing of that data set, and then what is- what does successful outcome look like in that setting? 'Cause I know it's a little bit different from acute. Definitely. I'll ask Charlie to give you a market opportunity, and I'll come back and tell you- Sure - about expectations. Yeah, and it's again similar to the enthusiasm in acute, the opportunity in neuropathic pain is quite large. Again, multibillion-dollar opportunity there. Again, one that we feel, given the concentration of prescriptions with specialists, one that we feel that we can serve with our specialty model. In terms of the neuropathic pain program, we did a neuropathic pain phase 2 study with the predecessor molecule, VX-150, and it was positive. So going into this study, we have enthusiasm and excitement because of that and also because of the genetic and pharmacologic validation of NAV1.8. Where are we today? We are well underway in the phase 2 program. I expect the study to complete towards the tail end of this year, and I expect results to be available tail end of this year or beginning of next. In terms of success, the phase 2 study is designed as a change from baseline study. There is a pregabalin arm, and what we're looking to do is to assess the magnitude of the treatment effect, so we can appropriately design and power our phase 3 study. So that's really what we're looking for. Okay. Okay, perfect. And is the idea to kind of bundle all this data together because it's all related in a sense, and it's all around the same time, or is it something that's gonna be, like, sequenced out? Yeah, good question. So in terms of disclosure, what you should expect is the three studies that make up the acute pain, the VX-548 program. We're gonna share all of those results altogether, and the reason for that is that that whole package is what determines and drives the label that we seek. So that acute pain package will be all together, those three studies. It just turns out to be the case, it, it just happens to be the case that the timeline for the neuropathic pain study is very, very similar, but that disclosure is a separate entity. We are gonna do all three acute pain studies together. Okay, understood. It's helpful. I guess moving on through the pipeline, you know, exa-cel, another one we were talking about earlier today. You have an FDA AdCom coming up, so maybe just any insight in terms of kind of some of the key topics there that might be discussed, and then, Charlie, maybe you could update us in terms of the launch prep that the company's been focused on? 'Cause I know this is a very unique market opportunity and market launch, but you guys have a lot of expertise from the cystic fibrosis data that you can leverage, obviously. Yeah. Yeah. In terms of the exact next steps, you know that in the U.S., it's two filings. It's a separate filing for sickle cell disease, PDUFA date December 8th, and it's a separate filing for thalassemia, and that's a March 24. Outside the U.S., in the U.K. and in the EU, it's a singular filing for both sickle cell disease and beta thalassemia. Coming back into the U.S. then, we know that we're gonna have an AdCom. This is not at all surprising because it is a new mechanism of action, and we also know the date of our advisory committee. It's October 31st of this year. We don't yet have the FDA's briefing book or their questions. It will certainly come in the coming days and weeks. I expect the AdCom to be fairly standard. It is likely to be about efficacy, safety, benefit, risk, because that's what AdComs tend to be about, and that's what I think. But to be fair, we don't have the questions or their briefing book yet. Charlie? Yeah, in terms of launch, we are, you know, I would say, palpably excited, and very ready. So we have done all the work that we need to do in terms of hiring salespeople, medical liaisons, patient support specialists. Supply chain is ready. We have done everything we can do to be ready there. We are working with our authorized treatment centers. We said we would target around 50 in the U.S., 25 in Europe. Those conversations are ongoing, and we will have centers ready at the time of approval. And then lastly, we've been advancing our discussions around access and reimbursement. Great success there. We've talked with private payers in the U.S., of course, representing more than 80% of covered lives. We've had conversations with all of the relevant Medicare, state Medicare organizations, and we see a clear pathway for reimbursement for the procedure. So we're gonna be ready. I think the only other point we would make is that, you know, with the launch, we're gonna be ready, and then there's a patient journey that happens at that point. It's a multi-month process for a patient to go through selection, screening, cell collection, the editing process, ultimately the reinfusion. And so while there will be a lot of activity on day one, it will take a little bit of time for patients to go through the process. And so we look at 2024 as really an important and foundational year as we treat patients and build towards a multi-billion-dollar opportunity. Yep. Okay, and just remind us, geographically, again, I'm assuming this is more of a U.S. versus ex-U.S. opportunity. Yes. So if you look at the total population in the U.S., let's call it North America, we'll include Canada. In North America and the E.U., total would be about 150,000. That's not what we're targeting with this exa-cel plus busulfan conditioning regimen. We're targeting 32,000 patients with sickle cell disease and beta thalassemia. Of that, the overwhelming majority of the opportunity is in sickle cell disease, and of that, the overwhelming number of patients are right here in the U.S. Exactly right. Okay. Of that, 80%+ of the patients are in 20 states, and an equivalent statement can be made. About 80% of the patients in Europe are in 4 countries. Yeah. Great. Just in the last minute, Type 1 diabetes, obviously another, potentially transformative program that the company has been working on for some time here. I know we're gonna get an update at EASD in October next month. Maybe just very quickly, what should we be focused on with that update? Yeah. The Type 1 diabetes program is one of the most exciting programs in our portfolio, largely because it can help so many patients, along with pain. Pain is, like, tens of millions of patients. The Type 1 diabetes program is 2.5 million patients in North America and Europe, and it's particularly exciting because it's another one of the programs in our portfolio that offers curative potential, like exa-cel, the potential for a one-and-done therapeutic. So what are we doing in this program? We know from 20+ years of research that cadaveric islet cells or whole pancreas can provide a long-term, durable, or curative therapy. The problem is quality and quantity of cells or organs. So what we've done... When I say we, it's the royal we. It's Doug Melton, it's Felicia Pagliuca, and it's the Semma group that we acquired. They determined a way to take stem cells and coax them into differentiating into fully differentiated insulin-producing islet cells. What we're doing is 3 programs within the umbrella of Type 1 diabetes. The first program, which is the program that we've already reported out on, and the first person in that program, who was a 40-year diabetic, taking 40 units of insulin, takes no insulin, and we've already shared that data. That first program, let's call it the Naked Cell program, we require immunosuppressive, off-the-shelf immunosuppressants for that. We think that that program could be useful for about 60,000 people, brittle diabetics, and those who have already undergone a kidney transplant for their Type 1 diabetes. Program number 2 is those exact same cells that we already know work, encapsulated into a device, no immunosuppression needed. That second program is also already in the clinic, and we've shared that we've dosed the first patient. The third program is those exact same cells that have certain gene edits to evade the immune system. That is still in preclinical development. I'm sorry, it took more than the 53 seconds we had. No problem. Well, I think we're gonna break for lunch anyways- Okay. So, it's good that we went over, but thank you so much, Reshma, Charlie. Really a pleasure. Thanks, Terence Thank you. So good to see you.