Company Announcements

Vertex Reports Second-Quarter 2019 Financial Results

- Product revenues of $940 million, a 25% increase compared to 2018 -

- Company increases full-year 2019 total product revenue guidance to $3.6 to $3.7 billion -

- Company advancing programs in 5 additional diseases beyond cystic fibrosis -

BOSTON--(BUSINESS WIRE)--Jul. 31, 2019-- Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated financial results for the second quarter ended June 30, 2019 and increased its full-year 2019 total product revenue guidance.

"We have made tremendous progress across our business in 2019 thus far. In CF, we submitted a New Drug Application to the FDA for our VX-445 triple combination regimen, which we believe has the potential to treat up to 90% of all CF patients in the future. We continue to focus on ensuring all eligible patients have access to our CF medicines as early as possible," said Jeffrey Leiden, M.D., Ph.D., Chairman, President and Chief Executive Officer of Vertex. "Additionally, we have rapidly grown our pipeline beyond CF, advancing seven new potential medicines across five disease areas, including beta thalassemia, sickle cell disease, alpha-1 antitrypsin deficiency, APOL1-mediated kidney diseases and pain. And through our expanded collaboration with CRISPR Therapeutics and acquisition of Exonics Therapeutics, we have now established a leading gene editing platform for the treatment of Duchenne Muscular Dystrophy and Myotonic Dystrophy Type 1."

Second-Quarter 2019 Financial Highlights

 

Three Months Ended June 30,

 

%

 

2019

 

2018

 

Change

 

(in millions, except per share amounts)

Total product revenues, net

$

940

 

 

 

$

750

 

 

 

25%

KALYDECO

$

262

 

 

 

$

253

 

 

 

 

ORKAMBI

$

316

 

 

 

$

311

 

 

 

 

SYMDEKO/SYMKEVI

$

362

 

 

 

$

186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating income

$

270

 

 

 

$

173

 

 

 

56%

Non-GAAP Operating income

$

413

 

 

 

$

260

 

 

 

59%

 

 

 

 

 

 

 

 

 

 

GAAP Net income

$

267

 

 

 

$

207

 

 

 

29%

Non-GAAP Net income

$

327

 

 

 

$

244

 

 

 

34%

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

$

1.03

 

 

 

$

0.80

 

 

 

29%

Non-GAAP Net income per share - diluted

$

1.26

 

 

 

$

0.94

 

 

 

34%

Total product revenues increased 25% compared to the second quarter of 2018, primarily driven by the uptake of SYMDEKO in the U.S. and SYMKEVI in Germany.

GAAP net income increased compared to the second quarter of 2018, driven by the strong growth in total product revenues, and was partially offset by increases in operating expenses, including a $50 million upfront payment as part of Vertex's recent collaboration with Kymera Therapeutics, and income taxes.

Non-GAAP net income increased compared to the second quarter of 2018, driven by the strong growth in total product revenues, and was partially offset by increased income taxes.

Cash, cash equivalents and marketable securities as of June 30, 2019 were $4.0 billion, an increase of approximately $800 million compared to $3.2 billion as of December 31, 2018.

Second-Quarter 2019 Expenses

 

Three Months Ended June 30,

 

2019

 

2018

 

(in millions)

Combined GAAP R&D and SG&A expenses

$

536

 

 

 

$

475

 

 

Combined Non-GAAP R&D and SG&A expenses

$

394

 

 

 

$

388

 

 

 

 

 

 

 

 

 

 

GAAP R&D expense

$

379

 

 

 

$

338

 

 

Non-GAAP R&D expense

$

271

 

 

 

$

281

 

 

 

 

 

 

 

 

 

 

GAAP SG&A expense

$

157

 

 

 

$

137

 

 

Non-GAAP SG&A expense

$

123

 

 

 

$

107

 

 

 

 

 

 

 

 

 

 

GAAP income taxes

$

60

 

 

 

$

10

 

 

Non-GAAP income taxes

$

86

 

 

 

$

6

 

 

Combined GAAP R&D and SG&A expenses increased compared to the second quarter of 2018 primarily due to the $50 million upfront payment to Kymera Therapeutics.

Combined Non-GAAP R&D and SG&A expenses were similar to the second quarter of 2018.

GAAP and Non-GAAP income taxes increased significantly compared to the second quarter of 2018 due to Vertex's release of its valuation allowance on the majority of its deferred tax assets in the fourth quarter of 2018. GAAP and non-GAAP income taxes in the second quarter of 2019 include a provision for income taxes on Vertex's pre-tax income using an estimated effective tax rate approximating statutory rates. This provision for income taxes includes a significant non-cash charge due to Vertex's ability to offset its pre-tax income against previously benefited net operating losses. Refer to "Supplemental Income Tax Information" for discussion of the cash versus non-cash components of Vertex's provision for income taxes.

Share Repurchase Program

In order to reduce the impact of dilution from employee equity programs, the Board of Directors has authorized a share repurchase program of up to $500 million of common stock through December 31, 2020.

The repurchase is expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.

Full-Year 2019 Financial Guidance

Vertex today announced updates to its 2019 financial guidance as summarized below:

 

Current FY 2019

 

Previous FY 2019

 

 

 

 

 

 

 

 

 

TOTAL product revenues

$

3.60 to 3.70 billion

 

 

$

3.45 to 3.55 billion

 

 

 

 

 

 

 

 

 

Combined GAAP R&D and SG&A expenses

$

2.25 to 2.40 billion

 

 

$

2.00 to 2.15 billion

 

Combined Non-GAAP R&D and SG&A expenses

 

Unchanged

 

 

$

1.65 to 1.70 billion

 

Non-GAAP effective tax rate

 

Unchanged

 

 

 

21% - 22%

 

The increase in total product revenue guidance is based on the strong product performance in the first half of 2019.

The company's revised combined GAAP R&D and SG&A expense guidance reflects upfront payments made to CRISPR Therapeutics and Kymera Therapeutics for transactions announced in the second quarter of 2019.

Business Highlights

CF CLINICAL DEVELOPMENT

  • On July 22, 2019, the company announced that it submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for the triple combination of VX-445 (elexacaftor), tezacaftor and ivacaftor. A Marketing Authorization Application (MAA) submission to the European Medicines Agency (EMA) is planned for the fourth quarter of 2019.
  • Enrollment is ongoing in a Phase 3 study evaluating the triple combination of elexacaftor, tezacaftor and ivacaftor in children ages 6 to 11 years.
  • A Phase 2 dose-ranging study is ongoing to evaluate the once-daily potentiator VX-561 to support potential Phase 3 development of VX-561 in a once-daily triple combination regimen.
  • A Phase 2 study is ongoing to evaluate the next-generation corrector, VX-121, in combination with VX-561 and tezacaftor as a potential once-daily triple combination regimen. VX-121 was granted Fast Track Designation by the FDA in the second quarter of 2019.
  • Vertex continues to make significant progress toward gaining approval for its CF medicines for use earlier in the course of disease progression. Recent highlights include:
    • Approval for SYMDEKO in the U.S. for children ages 6 to 11 years; MAA submission in the EU planned for the second half of 2019
    • Approval for ORKAMBI in Australia for children ages 2 to 5 years
    • Approval for KALYDECO in Australia for children ages 12 to <24 months

CLINICAL DEVELOPMENT

Alpha-1 Antitrypsin (AAT) Program:

  • Vertex has completed its evaluation of single and multiple doses of VX-814, the company's first investigational molecule for the treatment of alpha-1 antitrypsin (AAT) deficiency, in healthy volunteers. Based on the safety, tolerability and pharmacokinetic data from this study, the company plans to advance VX-814 into a Phase 2 dose-ranging study in patients with two Z mutations.
  • The company expects to have clinical data from its AAT program in people who have two Z mutations in 2020.
  • Vertex has also advanced a second investigational small molecule corrector, VX-864, into Phase 1 clinical development. Both VX-814 and VX-864 have received Fast Track Designation by the FDA.

Sickle Cell Disease and Beta Thalassemia:

  • Vertex and its partner CRISPR Therapeutics have dosed the first patient in the Phase 1/2 clinical study of severe sickle cell disease using the novel gene-editing therapy CTX001. The first patient with beta thalassemia was dosed in the first quarter of this year.

APOL1-Mediated Kidney Diseases:

  • Vertex has initiated a Phase 1 study evaluating VX-147, the company's first investigational oral small molecule medicine for the treatment of APOL1-mediated focal segmental glomerulosclerosis (FSGS) and other serious kidney diseases. VX-147 is designed to inhibit APOL1 function, which is a causal genetic factor in FSGS and other proteinuric kidney diseases. Vertex is also advancing multiple other APOL1 inhibitors through preclinical development.

INVESTMENTS IN EXTERNAL INNOVATION

  • On June 6, 2019, Vertex announced that it is expanding its collaboration with CRISPR Therapeutics and acquiring Exonics Therapeutics with the goal of developing novel therapies for Duchenne Muscular Dystrophy (DMD) and Myotonic Dystrophy Type 1 (DM1). Vertex completed the CRISPR and Exonics transactions in July 2019.
  • On May 15, 2019, Vertex and Kymera Therapeutics entered into a four-year strategic research and development collaboration to develop small molecule protein degraders against multiple targets. The collaboration will leverage Kymera's expertise in targeted protein degradation and its proprietary Pegasus™ drug discovery platform and Vertex's scientific, clinical, and regulatory capabilities to accelerate the development of first-in-class medicines for people with serious diseases.

Non-GAAP Financial Measures

In this press release, Vertex's financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results and guidance exclude from Vertex's pre-tax income (i) stock-based compensation expense, (ii) revenues and expenses related to business development transactions including collaboration agreements, asset acquisitions and consolidated variable interest entities, (iii) gains or losses related to the fair value of the company's strategic investments and (iv) other adjustments. The company's non-GAAP financial results also exclude from its provision for or benefit from income taxes the estimated tax impact related to its non-GAAP adjustments to pre-tax income described above. These results are provided as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help indicate underlying trends in the company's business, are important in comparing current results with prior period results and provide additional information regarding the company's financial position. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally and to manage the company's business and to evaluate its performance. The company adjusts, where appropriate, for both revenues and expenses in order to reflect the company's operations. The company provides guidance regarding product revenues in accordance with GAAP and provides guidance regarding combined research and development and sales, general, and administrative expenses on both a GAAP and non-GAAP basis. The company also provides guidance regarding its anticipated income taxes as a percentage of pre-tax income on a non-GAAP basis. The guidance regarding GAAP research and development expenses and sales, general and administrative expenses does not include estimates associated with any potential future business development activities. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.

Vertex Pharmaceuticals Incorporated
Second-Quarter Results
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

Product revenues, net

$

940,380

 

 

$

749,912

 

 

$

1,797,633

 

 

$

1,387,641

 

Collaboration and royalty revenues

913

 

 

2,245

 

 

2,095

 

 

5,315

 

Total revenues

941,293

 

 

752,157

 

 

1,799,728

 

 

1,392,956

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of sales

135,740

 

 

104,382

 

 

230,832

 

 

175,995

 

Research and development expenses

379,091

 

 

337,532

 

 

718,581

 

 

648,085

 

Sales, general and administrative expenses

156,502

 

 

137,303

 

 

303,547

 

 

267,111

 

Restructuring expense (income)

 

 

62

 

 

 

 

(14

)

Total costs and expenses

671,333

 

 

579,279

 

 

1,252,960

 

 

1,091,177

 

Income from operations

269,960

 

 

172,878

 

 

546,768

 

 

301,779

 

Interest income

18,076

 

 

8,049

 

 

33,691

 

 

13,838

 

Interest expense

(14,837

)

 

(18,155

)

 

(29,705

)

 

(35,041

)

Other income, net (1)

53,939

 

 

53,819

 

 

96,549

 

 

150,657

 

Income from operations before provision for (benefit from) income taxes

327,138

 

 

216,591

 

 

647,303

 

 

431,233

 

Provision for (benefit from) income taxes (2)

59,711

 

 

10,341

 

 

111,245

 

 

(2,318

)

Net income

267,427

 

 

206,250

 

 

536,058

 

 

433,551

 

Loss (income) attributable to noncontrolling interest (3)

 

 

1,110

 

 

 

 

(15,928

)

Net income attributable to Vertex

$

267,427

 

 

$

207,360

 

 

$

536,058

 

 

$

417,623

 

 

 

 

 

 

 

 

 

Amounts per share attributable to Vertex common shareholders:

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

Basic

$

1.04

 

 

$

0.82

 

 

$

2.09

 

 

$

1.65

 

Diluted

$

1.03

 

 

$

0.80

 

 

$

2.06

 

 

$

1.61

 

Shares used in per share calculations:

 

 

 

 

 

 

 

Basic

256,154

 

 

254,135

 

 

255,941

 

 

253,685

 

Diluted

259,822

 

 

258,584

 

260,015

258,557

 

Reconciliation of GAAP to Non-GAAP Net Income
Second-Quarter Results
(in thousands, except per share amounts)
(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

GAAP net income attributable to Vertex

$

267,427

 

 

$

207,360

 

 

$

536,058

 

 

$

417,623

 

Stock-based compensation expense

89,687

 

 

82,436

 

 

183,478

 

 

160,572

 

Increase in fair value of strategic investments (1)

(56,527

)

 

(53,918

)

 

(100,078

)

 

(149,376

)

(Decrease) increase in fair value of contingent consideration payable to VIE (3)

 

 

(1,100

)

 

 

 

22,900

 

Collaborative and transaction revenues and expenses (4) and other adjustments

53,389

 

 

4,278

 

 

59,740

 

 

5,120

 

Total non-GAAP adjustments to pre-tax income

86,549

 

 

31,696

 

 

143,140

 

 

39,216

 

Estimated income taxes related to non-GAAP adjustments to pre-tax income (5)

(26,710

)

 

5,030

 

 

(56,102

)

 

(16,829

)

Non-GAAP net income attributable to Vertex

$

327,266

 

 

$

244,086

 

 

$

623,096

 

 

$

440,010

 

 

 

 

 

 

 

 

 

Amounts per diluted share attributable to Vertex common shareholders:

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

GAAP

$

1.03

 

 

$

0.80

 

 

$

2.06

 

 

$

1.61

 

Non-GAAP

$

1.26

 

 

$

0.94

 

 

$

2.40

 

 

$

1.70

 

Shares used in diluted per share calculations:

 

 

 

 

 

 

 

GAAP and Non-GAAP

259,822

 

 

258,584

 

 

260,015

 

 

258,557

 

Reconciliation of GAAP to Non-GAAP Revenues and Expenses
Second-Quarter Results
(in thousands)
(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

GAAP total revenues

$

941,293

 

 

$

752,157

 

 

$

1,799,728

 

 

$

1,392,956

 

Collaborative and transaction revenues (4)

(17

)

 

(941

)

 

(158

)

 

(2,860

)

Non-GAAP total revenues

$

941,276

 

 

$

751,216

 

 

$

1,799,570

 

 

$

1,390,096

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

GAAP cost of sales

$

135,740

 

 

$

104,382

 

 

$

230,832

 

 

$

175,995

 

Stock-based compensation expense

(1,503

)

 

(1,191

)

 

(2,841

)

 

(2,004

)

Non-GAAP cost of sales

$

134,237

 

 

$

103,191

 

 

$

227,991

 

 

$

173,991

 

 

 

 

 

 

 

 

 

GAAP research and development expenses

$

379,091

 

 

$

337,532

 

 

$

718,581

 

 

$

648,085

 

Stock-based compensation expense

(55,632

)

 

(51,612

)

 

(115,347

)

 

(100,100

)

Collaborative and transaction expenses (4) and other adjustments

(52,175

)

 

(5,127

)

 

(58,667

)

 

(7,200

)

Non-GAAP research and development expenses

$

271,284

 

 

$

280,793

 

 

$

544,567

 

 

$

540,785

 

 

 

 

 

 

 

 

 

GAAP sales, general and administrative expenses

$

156,502

 

 

$

137,303

 

 

$

303,547

 

 

$

267,111

 

Stock-based compensation expense

(32,552

)

 

(29,633

)

 

(65,290

)

 

(58,468

)

Collaborative and transaction expenses (4) and other adjustments

(1,231

)

 

(482

)

 

(1,231

)

 

(1,811

)

Non-GAAP sales, general and administrative expenses

$

122,719

 

 

$

107,188

 

 

$

237,026

 

 

$

206,832

 

 

 

 

 

 

 

 

 

Combined non-GAAP R&D and SG&A expenses

$

394,003

 

 

$

387,981

 

 

$

781,593

 

 

$

747,617

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

GAAP other income, net

$

53,939

 

 

$

53,819

 

 

$

96,549

 

 

$

150,657

 

Increase in fair value of strategic investments (1)

(56,527

)

 

(53,918

)

 

(100,078

)

 

(149,376

)

Non-GAAP other (expense) income, net

$

(2,588

)

 

$

(99

)

 

$

(3,529

)

 

$

1,281

 

 

 

 

 

 

 

 

 

GAAP provision for (benefit from) income taxes

$

59,711

 

 

$

10,341

 

 

$

111,245

 

 

$

(2,318

)

Estimated income taxes related to non-GAAP adjustments to pre-tax income (5)

26,710

 

 

(4,614

)

 

56,102

 

 

10,840

 

Non-GAAP provision for income taxes (2)

$

86,421

 

 

$

5,727

 

 

$

167,347

 

 

$

8,522

 

Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 

 

June 30, 2019

 

December 31, 2018

Assets

 

 

 

Cash, cash equivalents and marketable securities

$

3,951,222

 

 

$

3,168,242

 

Accounts receivable, net

464,900

 

 

409,688

 

Inventories

143,017

 

 

124,360

 

Property and equipment, net

731,131

 

 

812,005

 

Goodwill

50,384

 

 

50,384

 

Deferred tax assets

1,425,191

 

 

1,499,672

 

Other assets

267,626

 

 

181,547

 

Total assets

$

7,033,471

 

 

$

6,245,898

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Accounts payable and accrued expenses

$

1,146,117

 

 

$

1,069,886

 

Finance lease liabilities

588,577

 

 

596,639

 

Other liabilities

228,812

 

 

144,170

 

Shareholders' equity

5,069,965

 

 

4,435,203

 

Total liabilities and shareholders' equity

$

7,033,471

 

 

$

6,245,898

 

 

 

 

 

Common shares outstanding

256,671

 

 

255,172

 

Supplemental Income Tax Information
(in thousands, except percentages)
(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

Components of provision for (benefit from) income taxes related to:

 

 

 

 

 

 

 

 

 

 

 

 

Cash taxes paid or accrued for state and foreign income taxes

$

5,214

 

 

$

5,727

 

 

$

9,992

 

 

$

8,522

 

VIE income taxes (5)

 

 

(416

)

 

 

 

5,989

 

Provision for income taxes offset by net operating losses

54,497

 

 

5,030

 

 

101,253

 

 

(16,829

)

GAAP provision for (benefit from) income taxes (2)

$

59,711

 

 

$

10,341

 

 

$

111,245

 

 

$

(2,318

)

 

 

 

 

 

 

 

 

Cash taxes paid or accrued for state and foreign income taxes

$

5,214

 

 

$

5,727

 

 

$

9,992

 

 

$

8,522

 

Estimated income taxes attributable to Vertex related to non-GAAP adjustments to pre-tax income (5)

26,710

 

 

(5,030

)

 

56,102

 

 

16,829

 

Provision for income taxes offset by net operating losses

54,497

 

 

5,030

 

 

101,253

 

 

(16,829

)

Non-GAAP provision for income taxes (2)

$

86,421

 

 

$

5,727

 

 

$

167,347

 

 

$

8,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate reconciliation:

 

 

 

 

 

 

 

GAAP effective tax rate

18

%

 

5

%

 

17

%

 

(1

)%

Impact of GAAP to Non-GAAP adjustments

3

%

 

(3

)%

 

4

%

 

3

%

Non-GAAP effective tax rate

21

%

 

2

%

 

21

%

 

2

%

Notes and Explanations

1: The company records gains and losses related to changes in the fair value of its strategic investments to "Other income, net."

2: In the fourth quarter of 2018, the company recorded a non-cash benefit from income taxes of approximately $1.5 billion related to the release of its valuation allowance on the majority of its net operating losses and other deferred tax assets. As a result, the company recorded deferred tax assets of $1.5 billion on its consolidated balance sheet as of December 31, 2018, which were previously subject to its valuation allowance. Starting in the first quarter of 2019, the company began recording a provision for income taxes on its pre-tax income using an estimated effective tax rate that approximates statutory rates. The provision includes a significant non-cash charge due to the company's ability to offset its pre-tax income against previously benefited net operating losses. The company expects the majority of its tax provision to represent a non-cash expense until its net operating losses have been fully utilized. As of December 31, 2018, the company's federal net operating losses and credits that were available to offset future pre-tax income were approximately $4.5 billion.

3: During the three and six months ended June 30, 2018, the company consolidated the financial statements of a variable interest entity, or VIE, because Vertex had licensed the rights to develop the VIE's most significant intellectual property asset. During the six months ended June 30, 2018, the fair value of the contingent payments payable by Vertex to the VIE increased by $22.9 million. This increase was attributable to noncontrolling interest and resulted in a decrease in net income attributable to Vertex on a dollar-for-dollar basis. The change in the fair value of the contingent payments payable by Vertex to the VIE decreased by $1.1 million in the three months ended June 30, 2018. The company deconsolidated the VIE as of December 31, 2018; therefore, there were no comparable amounts during the three and six months ended June 30, 2019.

4: "Collaborative and transaction revenues and expenses" in the three and six months ended June 30, 2019 and 2018 primarily related to collaborative upfront and milestone payments. "Collaborative and transaction revenues and expenses" in the three and six months ended June 30, 2018 also included revenues and expenses attributable to our VIE's operations.

5: In the three and six months ended June 30, 2019, "Estimated income taxes related to non-GAAP adjustments to pre-tax income" primarily related to (i) stock-based compensation (including an adjustment for excess tax benefits related to stock-based compensation), (ii) the increase in the fair value of the company's strategic investments and (iii) collaborative upfront payments. In the three and six months ended June 30, 2018, "Estimated income taxes related to non-GAAP adjustments to pre-tax income" were related to a provision for income taxes attributable to the company's VIE and excess tax benefits related to stock-based compensation.

About Vertex

Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases. The company has three approved medicines that treat the underlying cause of cystic fibrosis (CF) - a rare, life-threatening genetic disease - and has several ongoing clinical and research programs in CF. Beyond CF, Vertex has a robust pipeline of investigational medicines in other serious diseases where it has deep insight into causal human biology, such as sickle cell disease, beta thalassemia, pain, alpha-1 antitrypsin deficiency, Duchenne muscular dystrophy and APOL1-mediated kidney diseases.

Founded in 1989 in Cambridge, Mass., Vertex's global headquarters is now located in Boston'sInnovation District and its international headquarters is in London, UK. Additionally, the company has research and development sites and commercial offices in North America, Europe, Australia and Latin America. Vertex is consistently recognized as one of the industry's top places to work, including nine consecutive years on Science magazine's Top Employers list and top five on the 2019 Best Employers for Diversity list by Forbes. For company updates and to learn more about Vertex's history of innovation, visit www.vrtx.com or follow us on Facebook, Twitter, LinkedIn, YouTube and Instagram.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, Dr. Leiden's statements in this press release, the information provided regarding future financial performance, including in the section captioned "Full Year 2019 Financial Guidance" and statements regarding (i) the timing and expected outcome of regulatory applications, including NDAs and MAAs and (ii) the development plan and timelines for our product development candidates, including our next-generation triple combination regimen, VX-561, VX-121, CTX001, VX-814, VX-864 and VX-147. While Vertex believes the forward-looking statements contained in this press release are accurate, these forward-looking statements represent the company's beliefs only as of the date of this press release and there are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements. Those risks and uncertainties include, among other things, that the company's expectations regarding its 2019 CF net product revenues, expenses and effective tax rates may be incorrect (including because one or more of the company's assumptions underlying its expectations may not be realized), that data from the company's development programs may not support registration or further development of its compounds due to safety, efficacy or other reasons, and other risks listed under Risk Factors in Vertex's annual report and quarterly reports filed with the Securities and Exchange Commission and available through the company's website at www.vrtx.com. Vertex disclaims any obligation to update the information contained in this press release as new information becomes available.

Conference Call and Webcast

The company will host a conference call and webcast today at 4:30 p.m. ET. To access the call, please dial (866) 501-1537 (U.S.) or +1 (720) 545-0001 (International). The conference call will be webcast live and a link to the webcast can be accessed through Vertex's website at www.vrtx.com in the "Investors" section under "Events and Presentations." To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast. An archived webcast will be available on the company's website.

(VRTX-E)

Source: Vertex Pharmaceuticals Incorporated

Investors:
Michael Partridge, 617-341-6108
or
Eric Rojas, 617-961-7205
or
Zach Barber, 617-341-6470

Media:
617-341-6992
mediainfo@vrtx.com