Vertex Pharmaceuticals Inc (VRTX) — Q2 2025 Earnings Call Transcript

Good evening all. My name is Susie Lisa, and it is my pleasure to welcome you to our second 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 Charles 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 will now turn the call over to Reshma.

Thanks, Susie. Good evening all, and thank you for joining us on the call today. As anticipated, momentum accelerated, and we executed with very strong performance across the board, growing and diversifying revenue with multiple new product launches, driving advancement of programs in pivotal development and progressing the earlier-stage R&D pipeline. We continue to reach more patients with more products and delivered $2.96 billion in revenue in the second quarter, representing 12% growth versus Q2 2024. We are sharply focused on commercialization across multiple disease areas and the expansion of our patient reach. We are pleased with the first 6 months of launch performance as well as physician and patient feedback on both ALYFTREK in CF and JOURNAVX in acute pain, as well as the building global momentum for CASGEVY, our gene-edited therapy for sickle cell disease and beta thalassemia. In addition to this commercialization focus, research and clinical progress remain paramount. And to that end, we continue to rapidly advance the 4 programs in pivotal development and are working with urgency to begin our fifth in primary membranous nephropathy. Before I cover R&D highlights for the quarter, I would like to acknowledge our CSO, David Altshuler's retirement a year from now and the planned CSO transition to Mark Bunnage, our current SVP and Global Head of Research. David will be retiring from Vertex effective August 1, 2026, after an incredible 13-year career with the company. David initially joined Vertex as a member of the Board of Directors in 2012 and became Chief Scientific Officer in 2015. During David's tenure, multiple CF medicines have advanced from research through commercialization, including ORKAMBI, SYMDEKO, TRIKAFTA, and ALYFTREK. Our disease sandbox has broadened, and we successfully advanced the scientific breakthroughs that became CASGEVY and JOURNAVX. In an industry with notoriously low R&D success rates, David's teams delivered remarkable achievements year after year. David is a world-renowned physician-scientist known for his creative and critical thinking, penchant for debate, and commitment to building teams. On a more personal level, I know him as a deeply passionate Vertexian, dedicated physician, and valued member of the executive team. As mentioned in our earnings release, as part of this planned transition, I am delighted to announce that Mark Bunnage will assume the role of EVP and Chief Scientific Officer effective February 1, 2026, after which David will work with Mark to ensure a smooth transition. Mark joined Vertex and has worked alongside David since 2016. Since that time, Mark has held increasing senior leadership roles across research, starting as SVP Site Head, Boston Research, and most recently as SVP, Head of Global Research, overseeing all 5 of Vertex's research sites. Under Mark's leadership, we advanced many molecules to the clinic, including CASGEVY and JOURNAVX, Inaxaplin for AMKD, VX-828 for CF, VX-670 for DM1, and VX-407 for autosomal dominant polycystic kidney disease. Mark was also intimately involved in the diligence that led to the Alpine acquisition, which brought povetacicept to Vertex. I look forward to celebrating David's retirement and welcoming Mark as CSO when the time comes closer. Returning then to R&D highlights. I'll limit my comments to the pipeline programs with the most significant new information to share, specifically CF, pain, type 1 diabetes, and the renal programs. Starting with CF. As of July, we have gained approval for ALYFTREK in the U.S., U.K., EU, and Canada. We have also secured reimbursement for ALYFTREK in England and will add Ireland shortly. Patients in Germany and Denmark already have reimbursed access due to existing agreements and provisions. And across other EU member nations and in Canada, we're working with reimbursement bodies to secure access for eligible patients as quickly as possible. As we continue to expand our existing CFTR modulator portfolio to younger age groups, we also continue to develop new CFTR regimens with the aim of reaching our long-standing objective of bringing most, if not all people with CF to normal levels of CFTR function. Our Next-Gen 3.0 or NG 3.0 regimen is next on deck. The backbone of the NG 3.0 combination is VX-828, the most efficacious CFTR corrector that we have ever studied in vitro and brought to the clinic. We are nearing completion of the healthy volunteer study, and we remain on track to initiate a cohort of people with CF with the VX-828 regimen before the end of this year. Finally, in CF, on VX-522, I am pleased to note that the Data Safety Monitoring Committee has completed its review and endorsed restarting the trial. We're now in the process of working to resume dosing in the MAD portion of the Phase I/II for the 5,000 or so patients who cannot benefit from our CFTR modulators and expect to do so in the near term. Now shifting to pain. First, in peripheral neuropathic pain or PNP, we had a productive end-of-Phase II meeting with the FDA on our PNP program. While a broad PNP label remains our goal, at this time, the FDA does not see a path to a broad indication. As such, we will not be initiating an LSR trial at present. Instead, in light of the discussions and clear agreement with the FDA regarding approval requirements for diabetic peripheral neuropathy or DPN, we will begin a second DPN Phase III study shortly in order to secure DPN as our first PNP indication for Suzetrigine. Recall, we have breakthrough therapy designation for the DPN indication. Also note that our first Phase III study of Suzetrigine in DPN is already well underway. And with the near-term initiation of the second DPN study, our goal is to complete enrollment of both of these trials by the end of 2026. We look forward to working with the agency to secure DPN as our first PNP indication to expand the indication over time and to continue to discuss a potential pathway to a broad PNP label. Turning now to acute pain and VX-993, another NaV1.8 inhibitor. This afternoon, we shared top line results from the Phase II trial of this molecule in the post-bunionectomy setting. To recap, as part of our serial innovation strategy, we developed VX-993 with 3 main goals: first, to have an IV option; second, to provide additional NaV1.8 inhibitor candidates for potential use as co-formulation with future NaV1.7 inhibitors; and third, to further refine dose-response relationships, including whether higher clinical exposure might result in greater clinical efficacy. Focusing on this last point of efficacy, based on the predicted clinical potency and exposure of 993, we powered the Phase II trial with the goal of detecting a treatment effect higher than previously achieved. This Phase II trial included a placebo group, 3 VX-993 dosage arms, and a hydrocodone reference arm. The primary endpoint was SPID48 compared to placebo. The results showed that VX-993 was safe and well-tolerated with no related serious adverse events and an overall profile consistent with the placebo arm. The placebo effect was well controlled and desired 993 exposures were achieved with adequate separation between doses. On efficacy, VX-993 did not meet the primary endpoint and did not show statistical significance at the 0.05 level. The SPID048 treatment effect was similar at both the mid and high doses, and both were numerically better versus placebo. The outcome of the study, combined with the totality of evidence from our preclinical models and previous NaV1.8 inhibitor clinical studies in acute pain suggest we are at the high end of the NaV1.8 dose response curve for acute pain in the post-bunionectomy setting. As such, we do not plan to advance VX-993 as monotherapy in acute pain because we do not expect that it will be superior to our NaV1.8 inhibitors. We do plan to complete the ongoing VX-993 study of DPN to further define the exposure response relationship and maximal efficacy of NaV1.8 inhibitors in this chronic pain indication. To close out on pain, a quick word on our NaV1.7 inhibitor program. We're very encouraged by our strong preclinical progress in this program and look forward to advancing candidates for use alone or in combination with NaV1.8 inhibitors. Transitioning now to type 1 diabetes. Zimislecel will soon complete enrollment and dosing of its pivotal study, positioning us for global regulatory submissions in 2026 if the data are supportive. Recall, we expect about 60,000 severe type 1 diabetic patients may potentially benefit from this first Zimislecel submission. In June, at the ADA meeting and concurrently in the New England Journal of Medicine, positive data for Zimislecel in type 1 diabetes were presented that continue to demonstrate this cell therapy's transformative potential. All 12 patients with at least 1 year of follow-up who received a full dose of Zimislecel as a single infusion achieved ADA recommended target hemoglobin A1c levels less than 7%, freedom from severe hypoglycemic events during the evaluation period, and greater than 70% time in range. Remarkably, 10 of the 12 patients at 12 months were insulin-free, a testament to the potential transformative benefit and durability of this therapy. We also continue to make preclinical progress on our approaches to cloak the same VX-880 cells from the immune system, including improved immunosuppressive regimens, gene editing to produce hypoimmune islet cells, and novel immunoprotection to encapsulate these cells. We look forward to updating you as these programs advance. Finally, a few updates on our kidney portfolio, which now has clinical stage programs in 4 diseases: IgA nephropathy, AMKD, membranous nephropathy, and autosomal dominant kidney disease (ADPKD). Starting with povetacicept, a number of autoimmune diseases are driven by uncontrolled B cells. By controlling B cells, Pove is designed to restore immune balance for patients and holds the potential to have transformative benefit across multiple disease states. Pove was specifically engineered for better tissue penetration and to deliver optimized targeted dual inhibition of the BAFF and APRIL cytokines, which both play a key role in the pathogenesis of B-cell-mediated autoimmune diseases. First up for Pove is IgAN. We disclosed previously that we completed enrollment of the interim analysis cohort in the RAINIER Phase III trial. Today, we are pleased to share that we are on track to complete enrollment of the full RAINIER study by the end of this year. With regard to the interim analysis cohort, once this group completes 36 weeks of treatment, we will conduct the interim analysis and if positive, we'll file for potential accelerated approval in the U.S. in the first half of 2026. To close out on IgAN, studies to support the launch of Pove for at-home self-administration with a subcutaneous auto-injector are also well underway. Next, and consistent with this pipeline and product potential, the second disease state where we believe Pove can provide B-cell control is primary membranous nephropathy. Based on strong emerging data from the RUBY-3 study, we completed our end-of-Phase II meeting with the FDA and reached agreement on a Phase II/III adaptive study for traditional approval of Pove versus standard of care with the primary endpoint of complete remission at 72 weeks. This Phase II/III study will begin later this year. And third, we have prioritized additional diseases in which we believe Pove also holds best-in-class promise. Based on emerging data, potential patient impact, the treatment landscape, and commercial opportunity, the next 2 autoimmune diseases in focus for us are generalized myasthenia gravis and warm autoimmune hemolytic anemia. To summarize, our current priority disease areas are IgAN, membranous nephropathy, generalized myasthenia gravis, and warm autoimmune hemolytic anemia, and we are deprioritizing other indications at this time. Next, on inaxaplin for APOL1-mediated kidney disease, we remain on track to complete enrollment in the interim analysis cohort of the AMPLITUDE pivotal trial in primary AMKD this year. Of note, while we are able to enroll more adolescent patients, we've hit an important milestone in this study where the target number of 10- to 17-year-old AMKD patients has now been achieved. After completing enrollment in the IA cohort, these patients will be followed for 48 weeks of treatment, at which point we will conduct the interim analysis, and if positive, we'll be poised to file for potential accelerated approval in the U.S. The AMPLIFIED study, a Phase II proof-of-concept study in patients with AMKD and comorbidities, including type 2 diabetes, is also underway, and this trial is on track to complete enrollment by the end of 2025. To close on our kidney pipeline is VX-407 for ADPKD, a first-in-class small molecule protein folding corrector that is designed to treat the underlying cause of ADPKD by restoring PC1 protein function, thereby reducing total kidney volume and preventing progression to kidney failure. As a reminder, there are approximately 300,000 patients with ADPKD, and there are no approved therapies that treat the underlying cause of this disease. We believe about 10% of patients with ADPKD may be eligible for treatment with VX-407. This quarter, we'll begin the VX-407 proof-of-concept trial, which is a 52-week single-arm study in 24 patients that will evaluate the efficacy of VX-407 as measured by height-adjusted total kidney volume. In closing, Vertex has multiple Phase III programs well underway that are poised for accelerated or traditional approval. These trials have either already completed enrollment or are on track to do so in 2025. They each serve a disease with high unmet need, and they've secured multiple regulatory designations, including Fast Track, breakthrough, regenerative medicine or RMAT, PRIME, amongst others, all of which positions us for multiple regulatory submissions in 2026 and early 2027 with potential approvals and launches to follow. Accordingly, as we drive to achieve our R&D milestones, we're executing on the concurrent work of preparing for commercialization of these potential launches. With that, I'll now turn over the call to Duncan for a commercial update.

Thanks very much, Reshma. I will focus my comments tonight on the CF franchise, including the launch of ALYFTREK in the U.S., the continuing global launch of CASGEVY, and the U.S. launch of JOURNAVX in moderate to severe acute pain. Starting with CF. Our CF franchise continues to deliver strong results as we grow the number of eligible patients taking our CFTR modulators. We continue to make progress with younger patients, patients with rare mutations, and patients in new geographies. The overall market outlook is also supported by the fact that patients are living longer. Now turning to the U.S. launch of ALYFTREK, our fifth therapy approved to treat the underlying cause of CF. We believe ALYFTREK is the best CFTR modulator available for eligible patients. As we've discussed on prior calls, versus TRIKAFTA, ALYFTREK provides further improvements in CFTR function as measured by sweat chloride, is indicated for additional mutations not covered by the TRIKAFTA label, and offers the convenience of once-daily dosing. In the U.S., the early 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 thus newly eligible for ALYFTREK as well as those who previously discontinued one of our other CFTR modulators. For patients currently on TRIKAFTA, many have been on therapy for multiple years, have experienced incredible clinical benefit, and therefore, have considerable brand loyalty. In this context, the pace of transitions is steady as these patients continue their conversations with physicians and make decisions that balance the short-term logistics of augmented liver monitoring with ALYFTREK against a lifetime of potential benefits, including greater CFTR protein function and once-daily dosing. Overall, we're very pleased with the reports of ALYFTREK clinical success that physicians and patients are sharing, whether they were naive to a CFTR modulator, are returning to therapy, or have recently transitioned from TRIKAFTA. We continue to expect the majority of patients who are currently on CFTR modulator therapy will transition to ALYFTREK over time given its multiple benefits. We're also now in the process of launching ALYFTREK in England following our recent reimbursement agreement with NHS England, as well as in Germany and Denmark. Transitioning to CASGEVY, our transformative one-time treatment for patients with sickle cell disease and beta thalassemia. The CASGEVY launch is building momentum, and we're pleased with the progress we're making in 2025 as well as the growth it positions us for in 2026. In quarter 2, we've seen an acceleration across the board in patient initiations, cell collections, and infusions. This progress is a reflection of the foundational work initiated in 2024 to build our ATC network, expand our geographic footprint to include the Middle East, and secure reimbursement for CASGEVY worldwide. Regarding reimbursement, 10 countries now provide access to CASGEVY, including the U.S. and several European and Middle Eastern countries. In terms of our CASGEVY launch metrics, I'm pleased to report that since launch and through the end of quarter 2, 2025, firstly, we have met our authorized treatment center goal with more than 75 ATCs now activated globally. We are now dosing patients with sickle cell disease or TDT in multiple regions, including the Middle East, Europe, and the U.S. And secondly, nearly 250 patients have been referred by their physicians to an ATC to initiate the treatment process. Approximately 115 patients have had their first cell collections, including 35 first cell collections in quarter 2, 2025. And finally, a total of 29 patients have completed their treatment journey and received their infusions of CASGEVY edited cells, including 16 patients in the second quarter of 2025. Now shifting to the launch of JOURNAVX in moderate to severe acute pain. JOURNAVX received FDA approval on January 30 and has been available in channel since March. We continue to see a very positive reaction to this novel non-opioid option for the treatment of moderate to severe acute pain. We're pleased with the rapid pace of payer coverage, P&T committee reviews, formulary adoption, breadth of usage, and hospital uptake. We're also very encouraged by the broad range of positive JOURNAVX experiences reported by both physicians and patients. I'll detail several key elements of our ongoing launch. First, we continue to make great progress with payers, which is a testament to their appreciation for the JOURNAVX clinical profile and the importance of offering a novel non-opioid option in the treatment of acute pain. As of mid-July, across commercial and government payers, approximately 150 million lives or roughly half of all lives covered in the U.S. have reimbursed access to JOURNAVX. With commercial payers, our negotiations continue to progress very favorably. We recently reached a formal coverage agreement with a second large national pharmacy benefit manager to make JOURNAVX available to their customers, representing an incremental 22 million commercial lives. As a result, we now have formal coverage from 2 of the 3 large national PBMs and anticipate adding the third before year-end. In addition, we now have national agreements in place with the 2 largest hospital group purchasing organizations to make JOURNAVX available to acute pain patients in their network member hospitals. In Medicare, we continue to engage with plans to secure coverage. And for Medicaid patients through mid-July, we added 6 state plans since our quarter 1 earnings call for a total of 16 states with legislation that ensures access is available without prior authorization or step edit requirements. We continue to expect the coverage across commercial, Medicare, and Medicaid payers will continue to expand through 2025. Second, we are prioritizing the P&T committees at approximately 150 health care systems and roughly 2,000 hospitals. The majority of these 2,000 hospitals ladder up to 1 of the 150 health care systems. Last quarter, we disclosed that more than 1/3 of these target health care systems had taken steps to initiate the P&T review of JOURNAVX. I'm very happy to report that over 1/3 of these priority target health care systems have now added JOURNAVX to their formularies, protocols, or order sets, and many more have JOURNAVX under active consideration. In addition, at the hospital level, about 500 of the 2,000 hospitals we're targeting have also added JOURNAVX to their formularies, protocols, or order sets. Third, prescribing patterns are encouraging for the near- and long-term outlook for JOURNAVX with excellent breadth of usage to date across a wide range of inpatient and outpatient settings, pain conditions, and physician specialties, in line with the broad label. Lastly, more than 110,000 prescriptions were successfully filled for JOURNAVX across the retail and hospital settings as of mid-July. We remain tremendously excited about our opportunity to transform the treatment of pain, and we'll continue to invest as we see warranted. Given the rapid contracting and formulary progress we have made as well as the prescriber and patient feedback, we believe now is the time to make additional investments in our commercial activities behind JOURNAVX. This includes additional marketing activities in Q3 as well as field support as we continue to secure more access and hospital formulary wins over the coming months. We have high confidence that we are in the early days of creating another multibillion-dollar franchise for Vertex. To conclude, we are well on our way to establishing a new era of commercial diversification at Vertex as we execute on multiple launches in CF, sickle cell disease, TDT, and acute pain and begin the build-out for the next wave of launches in several disease areas with high unmet need. We look forward to bringing our transformative therapies to millions more patients and to keeping you updated on our progress. I'll now turn the call over to Charlie to review the financials.

Thanks, Duncan. Vertex's Q2 2025 revenue growth accelerated as expected, and our results demonstrate our consistent strong performance and attractive growth profile. Second quarter 2025 total revenue increased 12% year-over-year to $2.96 billion. U.S. revenue growth of 14% year-over-year was driven in CF by ongoing patient demand and favorable gross to net versus prior year and also included contributions from CASGEVY, JOURNAVX, and collaboration revenue. As expected, revenue outside the U.S. rebounded this quarter and was up 8% year-on-year, including healthy CF growth and a contribution from CASGEVY. Included in total revenue and the regional growth rates was $30 million of CASGEVY revenue, $12 million from JOURNAVX, and $21 million of collaboration revenue. Second quarter 2025 combined non-GAAP R&D, acquired IPR&D, and SG&A expenses were $1.24 billion compared to $5.43 billion in the second quarter of 2024. Excluding Alpine-related acquired IPR&D, non-GAAP operating expenses increased 24% year-on-year, driven primarily by the continued advancement of our broad pipeline, including clinical trials for IgAN, pain, and type 1 diabetes, as well as the build-out of commercial capabilities in pain. Second quarter 2025 acquired IPR&D expenses were $2 million compared to $4.4 billion in the second quarter of 2024, which included the acquisition of Alpine Immune Sciences. Second quarter 2025 non-GAAP operating income was $1.33 billion compared to a non-GAAP operating loss of $3.15 billion in the second quarter of 2024. Second quarter 2025 non-GAAP effective tax rate was 19.4%. Second quarter 2025 net income was $1.2 billion compared to a net loss of $3.3 billion in Q2 of '24. Second quarter 2025 non-GAAP earnings per share were $4.52 compared to a loss per share of $12.83 in the second quarter of 2024, primarily due to higher revenue and disciplined operating spend as well as the impact of the Alpine IPR&D expense in the second quarter of 2024. We ended the quarter with $12 billion in cash and investments after deploying approximately $395 million to repurchase more than 865,000 shares in the second quarter. In May, we announced a new $4 billion share repurchase program, building upon our existing $3 billion share repurchase program, which was authorized in 2023 and had $570 million remaining as of June 30. Our priorities for cash deployment remain unchanged: innovation and growth fueled by investment, both internal and external, followed by share repurchases. Now switching to guidance. We are reiterating all elements of our financial guidance, including our 2025 total revenue guidance range of $11.85 billion to $12 billion, representing growth of approximately 8% at the midpoint 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., followed by other regions later this year. Recall that ALYFTREK carries a meaningfully lower royalty burden than TRIKAFTA and extends our composition of matter patent protection to 2039. Revenue guidance also includes CASGEVY revenue as we treat more patients in geographies where we have secured regulatory approval and reimbursement. Given the duration of the patient journey, we have high visibility into CASGEVY revenue. As patient initiations and cell collections continue to ramp, we expect commensurate increases in infusions, but note that the timing of infusions is predicated on patient scheduling choices, there may be revenue variability from quarter to quarter. In addition, guidance reflects additional revenue contribution from JOURNAVX in the second half due to gains in sustainable payer coverage. Recently announced positive coverage decisions are included in our revenue guidance. Overall, we are confident in our ability to deliver another strong year of revenue growth for Vertex in 2025. We are also reiterating guidance for combined non-GAAP R&D, acquired IPR&D, and SG&A expenses in a range of $4.9 billion to $5 billion for the full year 2025, though we expect to be at the high end of this guidance range. Consistent with prior commentary, this range includes approximately $100 million in projected IPR&D charges. We will continue to invest a majority of our operating expenses into R&D given the momentum in our multiple mid- and late-stage clinical development programs with 4 and soon to be 5 Phase III studies ongoing and multiple Phase IIs. In addition, given progress with respect to reimbursement and access and the size of the opportunity for JOURNAVX, as Duncan mentioned, we are increasing our investment in marketing and commercial initiatives to support the launch in the second half of this year. We 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, on guidance, there is no change to our expected full-year 2025 non-GAAP effective tax rate in the range of 20.5% to 21.5%, which implies a higher effective tax rate in the second half of the year. We do not anticipate recent tax legislation to have a material impact on our expected effective tax rate in 2025. In closing, Vertex yet again delivered strong results in Q2 '25, growing and diversifying our revenue with the launch of 2 new products in the U.S., ALYFTREK and JOURNAVX, continuing the global launch of CASGEVY, and making significant pipeline progress across the portfolio. 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.

I had a couple on pain. So for the additional commercial efforts behind JOURNAVX, was that increase always planned as coverage came into place? Or is that a reaction to what you're seeing as you kind of continue the launch so far? And then for Suzetrigine in DPN, I think you said you'd complete enrollment in both Phase IIIs by the end of 2026. I'm just curious, can we expect enrollment completion for the first Phase III trial much sooner than that?

Hi, Jess. This is Reshma. Let me split that into 2 parts. I'll take the second part first, and then I'll ask Duncan to comment. Yes, I think that the first DPN might well enroll ahead of the second DPN because it started ahead of time, and the enrollment is going very well. I will ask Duncan to comment on JOURNAVX. As you know, it's really important to secure payer coverage as we ramp commercial efforts behind that. Duncan, any more comments on how you're thinking about commercialization?

Sure. And thank you for the question, Jess. So obviously, we're now about 5 months or so into the launch. And I'd say there are sort of 3 factors that are really driving our thinking. Firstly, as Reshma just alluded to, we're very pleased with the progress we're making with payer coverage and hospital formularies, particularly considering how lengthy P&T processes can be. Secondly, we're receiving incredibly positive feedback from physicians and patients on how well JOURNAVX is working for them clinically. And thirdly, we've seen both in the face-to-face arena with our sales organization as well as in the digital arena, we've seen JOURNAVX to be incredibly promotionally responsive. So based on those 3 factors, yes, we are thinking that now is the right time to augment our spend in marketing and field support, although I would add the last comment that we do anticipate that field support would still sit within the specialty model.

So with regard to the strategy in pain here, can you help us understand now that you won't be moving forward with a broad PNP label today, maybe what your plan is around running these DPN trials and then whether it's taking next-generation drugs or so forth to move into LSR or any of the other smaller indications like small fiber neuropathy or some of the others? And then secondly, in light of the JOURNAVX launch that's progressing here, maybe help us understand how to think about gross to net over the balance of the year and beyond.

Sure thing. Salveen, let me take those questions. With regard to our plans in PNP, it remains our goal to get a broad PNP indication. Our conversations with the FDA at this recent meeting were very productive. They were open-minded. They were very open to ongoing discussions, but it was equally clear that at this time, they do not see a path to PNP. That's just not where they are. However, we have a clear agreement on DPN. So the first order of business for us is to secure the DPN indication, hence, the start of the second DPN study. We can broaden that indication, and we had really good conversations about how that could occur. As you point out, small fiber neuropathy could be one broadening of the label. It could be by way of mono or polyneuropathies. It could be by way of distal or proximal. And there are certainly ways in which we can augment that label. The real big prize for us remains broad PNP. And we think that the way to get there might well be with ongoing conversations with the agency and with our NaV1.7 plus NaV1.8 portfolio. So what I would say is here and now, secure DPN, work to broaden the indication, and it might be one step at a time. SFN is one example of a next indication and then broaden all the way to PNP as we are able to have more conversations with the agency. Any comments that you want to add to gross to net, Charlie?

Yes. I mean on gross to net, obviously, it's elevated in the early months of the launch. We had said all along that volume would ramp up ahead of revenue, with the most significant revenue contribution in the second half of the year. Again, the elevated gross to net in the early days is a result of our patient support programs. As we continue to expand our coverage, those programs will start to fall away. Gross to net will normalize over the course of the year. But beyond that, I'm not going to provide further detail.

Just have a couple also on pain. Reshma, I want to ask you about the implications of the FDA feedback and the 993 data. I guess the first question is, could the strategy in chronic pain involve now include broader indications such as joint pain, et cetera? In other words, like outside of PMP and then on 993, do you think it makes sense to look at more of a NaV1.8 and 1.7 mechanism, at least involving maybe multiple isoforms just to try to maximize the treatment effect? I wasn't sure kind of what the strategy is there from a pipeline perspective.

Sure thing. Let me do chronic pain first, and then we'll come back to 993. Geoff, on chronic pain, I think the approach is, as we just described for the previous question, DPN first, then add on single indications but work with the agency to get to broad PNP. They have left us with some questions. We need to talk with each other some more. On musculoskeletal, which is, I think, the point you were raising, I do think that this class of compounds can work based on the data that we saw, for example, with VX-150 and osteoarthritic pain. But we're still very focused, first and foremost, on acute and then neuropathic. We will get to the musculoskeletal, but I don't see that in the highest priorities. On 993 and what the plan is with regard to acute pain, the big next steps for us on acute pain, obviously, launch JOURNAVX, we have our IV formulation with the 993 version. And we now have 2 potential molecules that could be used with the NaV1.7 molecule that's making very good progress on the bench. But I would say the big next thing to look for us to do in acute pain is combination NaV1.7 and 1.8. Remember, preclinically, what we see is a synergistic, not additive effect. And so that's going to be really important. I hope that helps.

Just 2 on JOURNAVX for me. So just first, can you comment a little bit more on how the progress in the real-world evidence generation is going at some of these key health systems and how you expect that to impact the cadence of P&T formulary placement? And then just second, on gross to net, I know you mentioned that there's been use of patient support programs initially in the launch. Just what we should expect going forward in terms of the use of the patient support programs as we think about gross to net from here?

You bet. Eli, let me take the first half of your question, and I'll ask Duncan to talk to you a little bit about the PSP patient support programs. So formulary coverage, Eli, is going really well with the hospitals and with the integrated delivery networks, and some very large prominent programs with lots of procedures have added JOURNAVX, frankly, faster than I would have expected given how long P&T committees normally take. With regard to evidence generation, I'll speak to a couple of studies that we're running in terms of lifecycle management. We have a Phase IV trial in a variety of, let's call it, plastic surgery indications, and another one in a variety of orthopedic conditions. And the emerging data looks really good, not only in terms of pain control, but also in terms of reducing opioid use and having patients go through an opioid-free journey. And I expect that you're going to see us presenting those papers in upcoming conferences. Duncan, can I ask you to make a couple of comments on the PSP program?

Yes, sure. So just to step back, we put in the PSP program in place in order to provide a seamless experience for patients in advance of payer coverage. And as we noted in our prepared remarks and as Charlie commented on, a couple of minutes ago, as we see our coverage with payers increasing over the course of this year, that program becomes unnecessary. And essentially, we will retire that program as we see national coverage. Obviously, we're not quite at that point yet, but that is the plan by the end of the year is to conclude that program. And as Charlie alluded to earlier, I don't think we're providing specific gross to net guidance with regard to that program.

Maybe to switch the subject up a little bit. Can I ask a couple on Pove? Is it your plan to launch with the auto-injector when you go live on IgAN? And then in terms of the indications that you're prioritizing on a go-forward basis, you've included gMG. I'm just curious about where you think you could particularly differentiate given that it seems like that's a pretty crowded market already.

Yes. Tazeen, on Pove, you have it exactly right. We plan to launch in the IgAN indication, which, of course, is the first indication with the auto-injector. And just to confirm, gMG, you mean myasthenia, not membranous?

Yes, that's correct.

Yes. The myasthenia indication is very exciting for us, and it is one of the ones that we've prioritized. Maybe 4 lines of reasoning to share with you. The first is there remains a very high unmet need in this area. We don't have any medicines that target the underlying cause of disease. And as you know, some of the medicines being used need to be cycled on and cycled off. And in the off period, that gives the opportunity for the autoantibodies to redevelop and continue to cause damage at the junction. The Pove mechanism is dual APRIL/BAFF inhibition, i.e., it dampens down the B cells, both the earlier B cells and the plasma cells, which is, of course, the underlying cause of myasthenia. The second is emerging data in this class is very appealing and points to a strong treatment effect. The third is that I expect that the regulatory pathway is going to be an efficient development pathway. And the last is, as you put all of this together and you think about the underlying cause of disease, high unmet need, the emerging data from others in this class, and then you think about the fact that Pove was specifically engineered to have best-in-class properties in terms of potency, binding affinity, as well as tissue distribution, this is why we're so excited about myasthenia.

Another follow-up kind of on the pipeline and the product for Pove. Can you kind of walk me through the rationale for prioritizing indications such as gMG, warm autoimmune hemolytic anemia, of course, IgAN? Was it clinical data, early data kind of preclinically or commercial considerations that drove these decisions?

Yes. Evan, this is Reshma. Let me take that one for you. All of the above. So as you know, RUBY-3 and RUBY-4 give us good insight into a basket of renal indications and a basket of heme indications. And we have emerging data, for example, in membranous, which points us to best-in-class potential in that disease, which has no other treatment. And it gives us an indication of best-in-class potential for warm autoimmune hemolytic anemia. So it is indeed emerging data from our own data sets. Sometimes, as in the case with myasthenia, it's emerging data from the class, taking into account that Pove has this benefit of being engineered to be best-in-class. So there's the emerging data. There is also consideration given to what exists in the marketplace and whether it treats the underlying cause of disease and whether we have a transformative medicine, and certainly takes into account our ability to be successful commercially. All of those have gone into us prioritizing IgAN, membranous, myasthenia, and warm autoimmune hemolytic anemia. And just to close out on that, prioritizing for myasthenia means we are ready to go to the agency to have our discussion on what the pivotal program looks like, and prioritizing for warm autoimmune hemolytic anemia means we are awaiting a final data set that we expect towards the end of this year. I hope that helps.

This is Divya on for Phil. I just had 2 questions on JOURNAVX. One is just a little bit technical, but I was curious for patients that are getting free samples. If they are to show up at a retail pharmacy, I was curious if you could walk me through the protocol for how they actually are able to secure the free drug. And the second is, I was curious if you could comment on the split of JOURNAVX scripts and how much are coming from maybe retail pharmacies versus hospitals? And any insights into the type of physicians prescribing JOURNAVX?

You bet. Duncan, can I ask you to comment first maybe quickly on how free samples work and then a little bit more detail on physician types and split between hospital and retail?

Thank you for the question. The free samples are provided through the patient's physician who supplies them directly to the patient, so they do not appear in the retail data. About 65% of the prescriptions are reflected in the weekly IQVIA data for retail prescriptions, while the rest are in the hospital sector. Currently, around 15,000 physicians are prescribing JOURNAVX, with more joining each week. These physicians include general surgeons, plastic surgeons, orthopedic surgeons, dentists, and anesthesiologists, and they prescribe for a wide range of treatments that align with the label, including everything from sprains and strains to reconstructive surgeries and total knee replacements.

Yes. So I have 2 questions, please. First on JOURNAVX. I was wondering if you could comment on the number of commercial lives with unrestricted access. And then second, with respect to VX-828, could you please provide a little bit more color on your expectations for the profile of this candidate?

Sure thing, Dave. Let me take the 828 question, and then I'll ask Duncan to comment on JOURNAVX. So 828, as I said in my prepared remarks, it is the most efficacious CFTR corrector that we've ever studied in vitro that we've advanced into the clinic. I expect that it is going to have most, if not all, patients get to carrier levels of sweat chloride. I expect a good safety profile. I expect a good drug-drug interaction profile based on the preclinical data. To wrap up on 828, we do continue to track towards initiating the CF cohort before the end of this year. Duncan, JOURNAVX?

Yes. Thank you for the question, David. So obviously, we are extremely pleased with the 150 million lives covered in just a few months. To get to the answer to your question, 84 million of those lives are unrestricted. I can tell you that for every single contract we have negotiated to date, every single one of those is for unrestricted access, which we define, as you know, as no prior authorization or step edit. So what that means, of course, is that based on high demand for JOURNAVX, there are, of course, some plans that have put in place coverage of JOURNAVX in advance of any agreement with us. And in those situations, there can be a prior authorization or step edit. Obviously, we'll be working to reduce that ratio over the balance of the year. But at this point, 150 million lives covered, 2 out of the 3 PBMs are covering, and we're working with the third, as you'd expect. And every single agreement we have done is for unrestricted access.

Just a couple from me. One was on the NOPAIN Act. I was a little bit surprised to see that JOURNAVX was not included in the draft rule that was published, I guess, it was about a month ago. And any kind of concerns or kind of process to get that on the list for 2026? And then second was with CASGEVY. Just what are you seeing in terms of the cycle time from cell collection to infusion? And do you see potential for that to accelerate going forward?

Sure, let's start with CASGEVY. As Duncan mentioned in his prepared remarks, we are witnessing increased momentum. A significant part of this is due to having patients at different stages in their treatment journey. More patients have had their cells collected and are now ready for infusion, which we anticipate will be significant in the latter half of this year. Regarding cycle time, I believe there is room for improvement. We mentioned that the entire process is expected to take around 4 to 5 months. This can vary based on whether the patient is receiving treatment for TDT or sickle cell disease, as it's typically easier to collect cells from TDT patients. We have strategies in place to reduce the cycle time as we continue to progress. As for the NOPAIN Act, the draft proposal did not include JOURNAVX because it was not explicitly indicated for post-surgical pain, which was surprising since JOURNAVX is indeed indicated for post-surgical pain. Both Phase III randomized controlled trials focused on post-surgical pain—one for abdominoplasty and the other for bunionectomy. I am confident that we will resolve this misunderstanding, and I expect JOURNAVX to be included on the final list due out this fall.

Just wondering I had 2 questions. The first is on JOURNAVX, if you can just confirm if there's any inventory in the second quarter that we need to think about as we do the math on a dollar per script basis? And then on the 993 Phase II data, just wondering if you think you need to make any tweaks to the preclinical models at all here given that data and particularly as you think about the NaV1.7 assets that you're developing.

Terence, could you just maybe rephrase the first part of your question? We didn't quite get it here.

Yes. Sorry, was there any inventory in Q2 for JOURNAVX?

On JOURNAVX, you know the buying patterns for hospitals are variable. So we see the normal variability for buying patterns in the hospital, but no, no inventory to speak of. You raised a crucial question about the performance of our preclinical models regarding the 993 study. It was essential for us to conduct this study and reach the dose levels we did to ensure we achieved clear distinctions between low, medium, and high doses. This was necessary to confirm that our models were accurately trained. What we observed with 993 entering the Phase II study was a molecule predicted to be more potent, allowing for higher dosing with very high exposure levels. Our models indicate this reaches a significant percentage of the EC50, many times above it. From this study, we confirmed that we indeed achieve high exposures and a clear separation between the medium and high doses. However, as reflected in our press release, the efficacy between the medium and high doses is similar, differing only from the low dose. This indicates that we are now at the high end of the dose response curve, and we do not expect this medicine to outperform our existing molecules. Thus, this is a significant result from Phase II, and we are pleased to have completed the study and acquired this information, positioning ourselves at the forefront with our models.

Nick, we'll take one more question, please.

Just wanted to check in on the Most Favored Nation and the letters government has sent out here. Given that your exposure to Medicaid, do you see any risk there? I mean you could be protected because of the orphan disease, but just wanted to make sure it is not on the cards.

Mohit, we have not received a letter. The lines of communication are open. We are able to have good dialogue with D.C., and we're paying close attention and digesting the latest news, but I can confirm that we did not receive a letter.