10-QPeriod: Q1 FY2022

VERTEX PHARMACEUTICALS INC / MA Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 6, 2022For Securities:VRTX

Summary

Vertex Pharmaceuticals Inc. reported strong financial results for the first quarter of 2022, driven by continued growth in product revenues, particularly from its flagship cystic fibrosis (CF) medicine, TRIKAFTA/KAFTRIO. Total revenues increased by 22% year-over-year to $2,097.5 million, with net product revenues reaching $2,097.5 million. Net income saw a healthy increase of 17% to $762.1 million, translating to a diluted EPS of $2.96. The company's robust cash position strengthened, ending the quarter at $8.2 billion in cash, cash equivalents, and marketable securities. Significant investments in research and development continue, with a focus on advancing a broad pipeline of therapies beyond CF, including promising candidates for sickle cell disease, beta thalassemia, APOL1-mediated kidney disease, and pain.

Financial Highlights

48 data points
Beta

Revenue

$2.10B

88.3% Gross Margin

Net Income

$762.10M

36.3% Net Margin

EPS (Diluted)

$2.96

Total Assets

$14.26B

Cash & Equivalents

$7.60B

Free Cash Flow

$892.60M

Financial Statements
Beta
Revenue$2.10B
Cost of Revenue$245.80M
Gross Profit$1.85B
R&D Expenses$603.10M
SG&A Expenses$215.20M
Operating Expenses$1.06B
Operating Income$1.04B
Net Income$762.10M
EPS (Basic)$2.99
EPS (Diluted)$2.96
Shares Outstanding (Basic)255.10M
Shares Outstanding (Diluted)257.90M

Key Highlights

  • 1Total revenues grew 22% to $2,097.5 million in Q1 2022, compared to $1,724.3 million in Q1 2021.
  • 2Net income increased 17% to $762.1 million ($2.96 diluted EPS) in Q1 2022, up from $653.1 million ($2.49 diluted EPS) in Q1 2021.
  • 3Product revenues were driven by TRIKAFTA/KAFTRIO, which increased 48% year-over-year.
  • 4Operating expenses increased by 26% to $1,056.6 million, largely due to a 32% rise in R&D expenses to support pipeline advancement.
  • 5The company's cash, cash equivalents, and marketable securities grew by 9% to $8.2 billion as of March 31, 2022.
  • 6Vertex continues to expand its clinical pipeline with a focus beyond CF, initiating or advancing trials for sickle cell disease, beta thalassemia, APOL1-mediated kidney disease, and pain.
  • 7Share repurchases were minimal in Q1 2022, with $499.7 million remaining authorized under the 2021 Share Repurchase Program.

Frequently Asked Questions

The primary driver of Vertex's revenue growth is the strong performance and continued international launches of its cystic fibrosis (CF) medicine, TRIKAFTA/KAFTRIO. This is further supported by the expansion of TRIKAFTA's use in younger age groups.

Vertex is significantly investing in research and development (R&D) to advance its pipeline beyond CF. This includes progressing therapies for serious diseases like sickle cell disease, beta thalassemia, APOL1-mediated kidney disease, and pain, as well as exploring genetic therapies for CF patients not served by current small molecule treatments.

Vertex maintains a strong financial position with a substantial increase in cash, cash equivalents, and marketable securities to $8.2 billion as of March 31, 2022. This robust liquidity, combined with ongoing profitability, provides ample resources to fund operations and R&D investments.

Operating expenses increased by 26% year-over-year, primarily driven by a 32% increase in research and development (R&D) expenses. This increase reflects the company's commitment to advancing its diverse pipeline of product candidates through various stages of clinical development.