10-QPeriod: Q3 FY2022

VERTEX PHARMACEUTICALS INC / MA Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 28, 2022For Securities:VRTX

Summary

Vertex Pharmaceuticals reported strong financial performance for the nine months ended September 30, 2022, with total revenues reaching $6.63 billion, a 20% increase year-over-year, driven primarily by the continued success of TRIKAFTA/KAFTRIO. Net income for the period grew significantly to $2.50 billion, up 59% from the prior year, reflecting robust revenue growth and effective cost management, although the prior year's results were impacted by a large upfront payment for acquired in-process R&D. The company's balance sheet remains strong, with cash, cash equivalents, and marketable securities totaling $9.77 billion as of September 30, 2022. Vertex also made strategic advancements in its pipeline, notably the acquisition of ViaCyte, Inc., and continued progress in its gene-editing therapies for sickle cell disease and beta thalassemia.

Financial Highlights

48 data points
Beta

Revenue

$2.33B

87.6% Gross Margin

Net Income

$930.50M

39.9% Net Margin

EPS (Diluted)

$3.59

Total Assets

$16.71B

Cash & Equivalents

$9.17B

Free Cash Flow

$901.30M

Financial Statements
Beta
Revenue$2.33B
Cost of Revenue$289.40M
Gross Profit$2.04B
SG&A Expenses$246.80M
Operating Expenses$1.21B
Operating Income$1.13B
Net Income$930.50M
EPS (Basic)$3.63
EPS (Diluted)$3.59
Shares Outstanding (Basic)256.50M
Shares Outstanding (Diluted)259.50M

Key Highlights

  • 1Total revenues increased by 20% to $6.63 billion for the nine months ended September 30, 2022, compared to $5.50 billion in the same period last year.
  • 2Net income surged by 59% to $2.50 billion for the nine months ended September 30, 2022, up from $1.57 billion in the prior year.
  • 3TRIKAFTA/KAFTRIO sales showed strong growth, increasing by 41% to $5.67 billion for the nine months ended September 30, 2022.
  • 4Research and development expenses increased by 35% to $1.85 billion for the nine months ended September 30, 2022, reflecting pipeline progression.
  • 5The company acquired ViaCyte, Inc. for $315.0 million in the third quarter of 2022 to advance its Type 1 Diabetes program.
  • 6Cash, cash equivalents, and marketable securities stood at $9.77 billion as of September 30, 2022, indicating a strong liquidity position.
  • 7The company expects to submit a biologics licensing application (BLA) for exagamglogene autotemcel (exa-cel) beginning in November 2022.

Frequently Asked Questions

Vertex's revenue growth is primarily driven by the strong performance and increasing uptake of its cystic fibrosis medicine, TRIKAFTA/KAFTRIO, in both the United States and international markets. Growth has also been supported by label expansions for existing CF medicines into younger age groups.

Vertex is significantly investing in research and development, with expenses increasing to $1.85 billion for the nine months ended September 30, 2022. This investment supports a diverse pipeline targeting serious diseases beyond cystic fibrosis, including sickle cell disease, beta thalassemia, pain, APOL1-mediated kidney disease, and type 1 diabetes, utilizing various therapeutic modalities like small molecules, cell therapies, and gene editing.

Vertex acquired ViaCyte, Inc. for $315.0 million in the third quarter of 2022. This acquisition is expected to accelerate the development of its Type 1 Diabetes program. Financially, it contributed to a $295.9 million outflow in investing activities for the quarter and resulted in the recognition of goodwill and an in-process research and development intangible asset.

Vertex maintains a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $9.77 billion as of September 30, 2022. This significant cash balance, coupled with operating cash flows, is expected to fund operations and strategic initiatives for the foreseeable future.