Vertex Pharmaceuticals — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 12% year-over-year to $3.44 billion in Q3 2026, compared to $3.08 billion in Q3 2025.
• U.S. revenue grew 10% to $2.17 billion, driven by CF therapies, new ALYFTREK initiations, higher realized net prices, and contributions from CASGEVY, JOURNAVX, and PALSONIFY.
• International revenue grew 16% to $1.27 billion, driven by CF performance, increased CASGEVY infusions, and favorable foreign exchange impacts.
• GAAP net income was $654 million, a decrease from $1.1 billion in Q3 2025, primarily due to acquisition-related expenses.
• Non-GAAP net income was $1.2 billion, flat compared to $1.2 billion in Q3 2025.
• Combined GAAP and non-GAAP R&D, Acquired IPR&D, and SG&A expenses were $2.2 billion in Q3 2026, up from $1.5 billion in Q3 2025.
• Cash, cash equivalents, and total marketable securities totaled $9.8 billion as of September 30, 2026, down from $12.3 billion as of December 31, 2025.
• Short-term debt was $999.6 million and long-term debt was $3.5 billion as of September 30, 2026.
• GAAP effective tax rate was 16.6% and non-GAAP effective tax rate was 18.0% for Q3 2026.

Guidance and Future Outlook:

• Full-year 2026 total revenue guidance was raised to $13.15 billion to $13.25 billion from the previous $13.1 billion to $13.2 billion.
• Embedded in guidance are expectations for $500 million or more in combined revenue from CASGEVY and JOURNAVX, and $40 million to $50 million from PALSONIFY.
• Full-year 2026 combined GAAP R&D, AIPR&D, and SG&A expense guidance increased to $7.15 billion to $7.2 billion from $6.3 billion to $6.45 billion.
• Full-year 2026 combined non-GAAP R&D, AIPR&D, and SG&A expense guidance increased to approximately $6.0 billion from $5.65 billion to $5.75 billion.
• Non-GAAP effective tax rate guidance remains unchanged at 19.5% to 20.5%.
• Guidance reflects a year-over-year benefit of approximately 150 basis points from foreign exchange changes.

Business Segments and Product Lines:

• Cystic Fibrosis (CF): CF portfolio revenue remains the primary driver; ALYFTREK reimbursement secured in 7 additional countries (total 32), and regulatory submissions initiated for children ages 2 to 5.
• CASGEVY: Generated $99 million in Q3 2026 revenue (30% quarter-over-quarter growth), nearly six times the $17 million reported in Q3 2025. FDA approved for children ages 2 and older in July; approvals obtained in UAE, Bahrain, and UK for pediatric populations.
• JOURNAVX: Generated $58 million in Q3 2026 revenue (18% quarter-over-quarter growth), nearly tripling Q3 2025 revenue. Over 750,000 prescriptions filled in Q3 2026 (40% quarter-over-quarter growth); became the most prescribed branded oral pain medicine in the U.S. as of August 2026.
• PALSONIFY: Generated $10 million in revenue in September 2026 following the Crinetics acquisition. Holds over 40% brand share among patients starting or switching therapy; approved in EU in April 2026 with launches expected in H2 2027.
• Pipeline:
  • CF: Phase 1 data for next-generation 3.0 CFTR corrector VX-828 showed safety and efficacy; enrollment ongoing for VX-581 and VX-272.
  • Pain: Phase 3 enrollment for suzetrigine in diabetic peripheral neuropathy (DPN) on track to complete by end of 2026; Phase 2 enrollment for VX-993 in DPN on track to complete by end of 2026.
  • Nephrology: BLA for povetacicept in IgA Nephropathy (IgAN) under priority review with PDUFA date of November 30, 2026; Phase 3 enrollment ongoing for primary membranous nephropathy (pMN).
  • Kidney Disease: Positive Phase 2b results for inaxaplin in APOL1-mediated kidney disease; full enrollment completed for AMPLITUDE pivotal study.
  • Endocrine: Phase 3 trial of atumelnant for congenital adrenal hyperplasia (CAH) enrollment underway; Phase 2/3 study initiated for ACTH-dependent Cushing's syndrome.
  • Diabetes: Phase 1/2 trial for VX-017 (stem cell-derived islet therapy) for Type 1 Diabetes ongoing; focus shifted to VX-017 over zimislecel.
  • Other: Phase 2 enrollment completed for VX-407 in ADPKD; Phase 1/2 enrollment completed for VX-670 in Myotonic Dystrophy Type 1.

Market and Competitive Landscape:

• CFTR modulators treat approximately 95% of people with CF in core markets and are accessible in over 65 countries.
• PALSONIFY has access to over 245 million individuals (approx. 80% of U.S. covered lives) and is prescribed by approximately 500 of 3,200 target endocrinologists.
• CASGEVY is the first genetic therapy for SCD and TDT indicated for children as young as 2 years old.
• JOURNAVX is a first-in-class oral selective non-opioid NaV1.8 pain signal inhibitor.
• Povetacicept is positioned as a potentially best-in-class approach for B cell-mediated diseases including IgAN, pMN, and gMG.

Risks and Challenges:

• GAAP net income decline was driven by expenses related to the Crinetics Pharmaceuticals acquisition.
• Increased operating expenses to fund pipeline and commercial opportunities, including the renal franchise build-out and JOURNAVX launch.
• Higher interest expense and lower interest income resulting from the Crinetics acquisition.
• Forward-looking statements regarding revenue, expenses, and clinical trial timelines are subject to risks including regulatory delays, trial enrollment issues, and potential failure of data to support registration.

Management Commentary and Tone:

• CEO Reshma Kewalramani described Q3 2026 results as "excellent," citing strong revenue growth across a diversified portfolio and successful Crinetics acquisition.
• Management expressed confidence in establishing nephrology as the fifth commercial franchise pending povetacicept approval in IgAN later in the month.
• Tone indicates a strategic shift toward expanding beyond CF into rare endocrine, renal, and pain markets.

Other Key Points:

• Completed acquisition of Crinetics Pharmaceuticals on September 1, 2026, for a total equity value of approximately $10.0 billion ($9.0 billion net of cash acquired).
• Entered into a collaboration with AbCellera in July with a $28 million upfront payment.
• $9.0 billion net cash was used for the Crinetics acquisition and stock repurchases, partially offset by a $4.5 billion term loan executed in Q3 2026.
• Approximately $500 million of compensation and transaction-related expenses associated with the Crinetics acquisition were included in combined R&D, AIPR&D, and SG&A expenses.
• Combined GAAP and non-GAAP expense guidance includes approximately $650 million to $700 million of stock-based compensation and $500 million of acquisition-related costs.