|
Securities registered pursuant to Section 12(b) of the Act:
|
||||
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 Par Value Per Share
|
|
VRTX
|
|
The Nasdaq Global Select Market
|
Common Stock, par value $0.01 per share
|
259,276,709
|
Outstanding at April 24, 2020
|
|
|
|
Page
|
|
||
|
Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2020 and 2019
|
|
|
Condensed Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2020 and 2019
|
|
|
Condensed Consolidated Balance Sheets - March 31, 2020 and December 31, 2019
|
|
|
Condensed Consolidated Statements of Shareholders' Equity - Three Months Ended March 31, 2020 and 2019
|
|
|
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2020 and 2019
|
|
|
||
Item 5.
|
Other Information.
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Product revenues, net
|
$
|
1,515,107
|
|
|
$
|
857,253
|
|
Collaborative and royalty revenues
|
—
|
|
|
1,182
|
|
||
Total revenues
|
1,515,107
|
|
|
858,435
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of sales
|
162,497
|
|
|
95,092
|
|
||
Research and development expenses
|
448,528
|
|
|
339,490
|
|
||
Sales, general and administrative expenses
|
182,258
|
|
|
147,045
|
|
||
Change in fair value of contingent consideration
|
1,600
|
|
|
—
|
|
||
Total costs and expenses
|
794,883
|
|
|
581,627
|
|
||
Income from operations
|
720,224
|
|
|
276,808
|
|
||
Interest income
|
12,576
|
|
|
15,615
|
|
||
Interest expense
|
(14,136
|
)
|
|
(14,868
|
)
|
||
Other (expense) income, net
|
(61,130
|
)
|
|
42,610
|
|
||
Income before provision for income taxes
|
657,534
|
|
|
320,165
|
|
||
Provision for income taxes
|
54,781
|
|
|
51,534
|
|
||
Net income
|
$
|
602,753
|
|
|
$
|
268,631
|
|
|
|
|
|
||||
Net income per common share:
|
|
|
|
||||
Basic
|
$
|
2.32
|
|
|
$
|
1.05
|
|
Diluted
|
$
|
2.29
|
|
|
$
|
1.03
|
|
Shares used in per share calculations:
|
|
|
|
||||
Basic
|
259,815
|
|
|
255,695
|
|
||
Diluted
|
263,515
|
|
|
260,175
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
602,753
|
|
|
$
|
268,631
|
|
Changes in other comprehensive income:
|
|
|
|
||||
Unrealized holding (losses) gains on marketable securities, net
|
(764
|
)
|
|
596
|
|
||
Unrealized gains (losses) on foreign currency forward contracts, net of tax of $(5.0) million and $1.5 million, respectively
|
18,782
|
|
|
(222
|
)
|
||
Foreign currency translation adjustment
|
(2,662
|
)
|
|
4,967
|
|
||
Total changes in other comprehensive income
|
15,356
|
|
|
5,341
|
|
||
Comprehensive income
|
$
|
618,109
|
|
|
$
|
273,972
|
|
|
March 31,
|
|
December 31,
|
||||
|
2020
|
|
2019
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,593,412
|
|
|
$
|
3,109,322
|
|
Marketable securities
|
596,984
|
|
|
698,972
|
|
||
Accounts receivable, net
|
845,269
|
|
|
633,518
|
|
||
Inventories
|
187,087
|
|
|
167,502
|
|
||
Prepaid expenses and other current assets
|
223,648
|
|
|
213,515
|
|
||
Total current assets
|
5,446,400
|
|
|
4,822,829
|
|
||
Property and equipment, net
|
736,303
|
|
|
745,080
|
|
||
Goodwill
|
1,002,158
|
|
|
1,002,158
|
|
||
Intangible assets
|
400,000
|
|
|
400,000
|
|
||
Deferred tax assets
|
1,147,705
|
|
|
1,190,815
|
|
||
Other assets
|
160,635
|
|
|
157,583
|
|
||
Total assets
|
$
|
8,893,201
|
|
|
$
|
8,318,465
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
100,703
|
|
|
$
|
87,610
|
|
Accrued expenses
|
1,258,271
|
|
|
1,116,912
|
|
||
Other current liabilities
|
179,776
|
|
|
130,305
|
|
||
Total current liabilities
|
1,538,750
|
|
|
1,334,827
|
|
||
Long-term finance lease liabilities
|
532,952
|
|
|
538,576
|
|
||
Long-term contingent consideration
|
178,100
|
|
|
176,500
|
|
||
Other long-term liabilities
|
181,745
|
|
|
183,318
|
|
||
Total liabilities
|
2,431,547
|
|
|
2,233,221
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 1,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 500,000 shares authorized, 259,079 and 258,993 shares issued and outstanding, respectively
|
2,591
|
|
|
2,589
|
|
||
Additional paid-in capital
|
7,695,905
|
|
|
7,937,606
|
|
||
Accumulated other comprehensive income (loss)
|
13,383
|
|
|
(1,973
|
)
|
||
Accumulated deficit
|
(1,250,225
|
)
|
|
(1,852,978
|
)
|
||
Total shareholders’ equity
|
6,461,654
|
|
|
6,085,244
|
|
||
Total liabilities and shareholders’ equity
|
$
|
8,893,201
|
|
|
$
|
8,318,465
|
|
|
Three Months Ended
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
Shareholders’ Equity |
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2018
|
255,172
|
|
|
$
|
2,546
|
|
|
$
|
7,421,476
|
|
|
$
|
659
|
|
|
$
|
(2,989,478
|
)
|
|
$
|
4,435,203
|
|
Cumulative effect adjustment for adoption of new accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,310
|
)
|
|
(40,310
|
)
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
5,341
|
|
|
—
|
|
|
5,341
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
268,631
|
|
|
268,631
|
|
|||||
Repurchase of common stock
|
(537
|
)
|
|
(6
|
)
|
|
(98,001
|
)
|
|
—
|
|
|
—
|
|
|
(98,007
|
)
|
|||||
Common stock withheld for employee tax obligations
|
(27
|
)
|
|
—
|
|
|
(5,832
|
)
|
|
—
|
|
|
—
|
|
|
(5,832
|
)
|
|||||
Issuance of common stock under benefit plans
|
1,743
|
|
|
21
|
|
|
64,023
|
|
|
—
|
|
|
—
|
|
|
64,044
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
94,243
|
|
|
—
|
|
|
—
|
|
|
94,243
|
|
|||||
Balance at March 31, 2019
|
256,351
|
|
|
$
|
2,561
|
|
|
$
|
7,475,909
|
|
|
$
|
6,000
|
|
|
$
|
(2,761,157
|
)
|
|
$
|
4,723,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2019
|
258,993
|
|
|
$
|
2,589
|
|
|
$
|
7,937,606
|
|
|
$
|
(1,973
|
)
|
|
$
|
(1,852,978
|
)
|
|
$
|
6,085,244
|
|
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
15,356
|
|
|
—
|
|
|
15,356
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
602,753
|
|
|
602,753
|
|
|||||
Repurchase of common stock
|
(1,404
|
)
|
|
(14
|
)
|
|
(300,012
|
)
|
|
—
|
|
|
—
|
|
|
(300,026
|
)
|
|||||
Common stock withheld for employee tax obligations
|
(575
|
)
|
|
(6
|
)
|
|
(136,161
|
)
|
|
|
|
|
|
(136,167
|
)
|
|||||||
Issuance of common stock under benefit plans
|
2,065
|
|
|
22
|
|
|
77,572
|
|
|
—
|
|
|
—
|
|
|
77,594
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
116,900
|
|
|
—
|
|
|
—
|
|
|
116,900
|
|
|||||
Balance at March 31, 2020
|
259,079
|
|
|
$
|
2,591
|
|
|
$
|
7,695,905
|
|
|
$
|
13,383
|
|
|
$
|
(1,250,225
|
)
|
|
$
|
6,461,654
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
602,753
|
|
|
$
|
268,631
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Stock-based compensation expense
|
115,706
|
|
|
93,791
|
|
||
Depreciation expense
|
26,821
|
|
|
27,140
|
|
||
Increase in fair value of contingent consideration
|
1,600
|
|
|
—
|
|
||
Deferred income taxes
|
36,705
|
|
|
43,425
|
|
||
Losses (gains) on equity securities
|
44,870
|
|
|
(43,551
|
)
|
||
Other non-cash items, net
|
9,668
|
|
|
(2,431
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(223,672
|
)
|
|
(30,136
|
)
|
||
Inventories
|
(27,450
|
)
|
|
(13,139
|
)
|
||
Prepaid expenses and other assets
|
2,790
|
|
|
7,941
|
|
||
Accounts payable
|
14,285
|
|
|
(24,145
|
)
|
||
Accrued expenses
|
153,814
|
|
|
(27,279
|
)
|
||
Other liabilities
|
57,808
|
|
|
24,537
|
|
||
Net cash provided by operating activities
|
815,698
|
|
|
324,784
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of available-for-sale debt securities
|
(75,265
|
)
|
|
(128,215
|
)
|
||
Maturities of available-for-sale debt securities
|
60,145
|
|
|
107,118
|
|
||
Sale of equity securities
|
72,036
|
|
|
—
|
|
||
Expenditures for property and equipment
|
(19,450
|
)
|
|
(18,041
|
)
|
||
Investment in equity securities
|
(5,800
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
31,666
|
|
|
(39,138
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Issuances of common stock under benefit plans
|
79,597
|
|
|
63,620
|
|
||
Repurchases of common stock
|
(300,026
|
)
|
|
(94,007
|
)
|
||
Payments in connection with common stock withheld for employee tax obligations
|
(136,167
|
)
|
|
(5,832
|
)
|
||
Payments on finance leases
|
(10,287
|
)
|
|
(9,385
|
)
|
||
Proceeds related to finance leases
|
5,833
|
|
|
—
|
|
||
Advance from collaborator
|
2,500
|
|
|
5,000
|
|
||
Repayments of advanced funding
|
(880
|
)
|
|
(1,385
|
)
|
||
Net cash used in financing activities
|
(359,430
|
)
|
|
(41,989
|
)
|
||
Effect of changes in exchange rates on cash
|
(6,651
|
)
|
|
(378
|
)
|
||
Net increase in cash and cash equivalents
|
481,283
|
|
|
243,279
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
3,120,681
|
|
|
2,658,253
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
3,601,964
|
|
|
$
|
2,901,532
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
13,771
|
|
|
$
|
13,148
|
|
Cash paid for income taxes
|
$
|
5,845
|
|
|
$
|
1,835
|
|
Issuances of common stock from employee benefit plans receivable
|
$
|
817
|
|
|
$
|
510
|
|
Accrued share repurchase liability
|
$
|
—
|
|
|
$
|
4,000
|
|
A.
|
Basis of Presentation and Accounting Policies
|
B.
|
Revenue Recognition
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
TRIKAFTA
|
$
|
895,233
|
|
|
$
|
—
|
|
SYMDEKO/SYMKEVI
|
173,159
|
|
|
320,275
|
|
||
ORKAMBI
|
234,138
|
|
|
293,007
|
|
||
KALYDECO
|
212,577
|
|
|
243,971
|
|
||
Total product revenues, net*
|
$
|
1,515,107
|
|
|
$
|
857,253
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
United States
|
$
|
1,187,588
|
|
|
$
|
641,104
|
|
Outside of the United States
|
|
|
|
||||
Europe
|
257,391
|
|
|
167,751
|
|
||
Other
|
70,128
|
|
|
49,580
|
|
||
Total revenues outside of the United States
|
327,519
|
|
|
217,331
|
|
||
Total revenues
|
$
|
1,515,107
|
|
|
$
|
858,435
|
|
C.
|
Collaborative Arrangements
|
D.
|
Earnings Per Share
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands, except per share amounts)
|
||||||
Net income
|
$
|
602,753
|
|
|
$
|
268,631
|
|
|
|
|
|
||||
Basic weighted-average common shares outstanding
|
259,815
|
|
|
255,695
|
|
||
Effect of potentially dilutive securities:
|
|
|
|
||||
Stock options
|
1,868
|
|
|
2,585
|
|
||
Restricted stock and restricted stock units (including PSUs)
|
1,801
|
|
|
1,870
|
|
||
Employee stock purchase program
|
31
|
|
|
25
|
|
||
Diluted weighted-average common shares outstanding
|
263,515
|
|
|
260,175
|
|
||
|
|
|
|
||||
Basic net income per common share
|
$
|
2.32
|
|
|
$
|
1.05
|
|
Diluted net income per common share
|
$
|
2.29
|
|
|
$
|
1.03
|
|
|
Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
|
(in thousands)
|
||||
Stock options
|
879
|
|
|
2,837
|
|
Unvested restricted stock and restricted stock units (including PSUs)
|
430
|
|
|
6
|
|
E.
|
Fair Value Measurements
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3:
|
Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
|
|
Fair Value Measurements as of March 31, 2020
|
||||||||||||||
|
|
|
Fair Value Hierarchy
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Financial instruments carried at fair value (asset positions):
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,736,913
|
|
|
$
|
1,736,913
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
30,700
|
|
|
—
|
|
|
30,700
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
165,178
|
|
|
145,465
|
|
|
19,713
|
|
|
—
|
|
||||
Government-sponsored enterprise securities
|
7,791
|
|
|
7,791
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities
|
305,051
|
|
|
—
|
|
|
305,051
|
|
|
—
|
|
||||
Commercial paper
|
118,964
|
|
|
—
|
|
|
118,964
|
|
|
—
|
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
25,434
|
|
|
—
|
|
|
25,434
|
|
|
—
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
1,798
|
|
|
—
|
|
|
1,798
|
|
|
—
|
|
||||
Total financial assets
|
$
|
2,391,829
|
|
|
$
|
1,890,169
|
|
|
$
|
501,660
|
|
|
$
|
—
|
|
Financial instruments carried at fair value (liability positions):
|
|
|
|
|
|
|
|
||||||||
Other current liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(459
|
)
|
|
$
|
—
|
|
|
$
|
(459
|
)
|
|
$
|
—
|
|
Long-term contingent consideration
|
(178,100
|
)
|
|
—
|
|
|
—
|
|
|
(178,100
|
)
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
(637
|
)
|
|
—
|
|
|
(637
|
)
|
|
—
|
|
||||
Total financial liabilities
|
$
|
(179,196
|
)
|
|
$
|
—
|
|
|
$
|
(1,096
|
)
|
|
$
|
(178,100
|
)
|
|
Fair Value Measurements as of December 31, 2019
|
||||||||||||||
|
|
|
Fair Value Hierarchy
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Financial instruments carried at fair value (asset positions):
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
791,039
|
|
|
$
|
791,039
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
6,070
|
|
|
—
|
|
|
6,070
|
|
|
—
|
|
||||
Commercial paper
|
29,472
|
|
|
—
|
|
|
29,472
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate equity securities
|
282,084
|
|
|
261,797
|
|
|
20,287
|
|
|
—
|
|
||||
Government-sponsored enterprise securities
|
12,733
|
|
|
12,733
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities
|
301,799
|
|
|
—
|
|
|
301,799
|
|
|
—
|
|
||||
Commercial paper
|
102,356
|
|
|
—
|
|
|
102,356
|
|
|
—
|
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
9,725
|
|
|
—
|
|
|
9,725
|
|
|
—
|
|
||||
Total financial assets
|
$
|
1,535,278
|
|
|
$
|
1,065,569
|
|
|
$
|
469,709
|
|
|
$
|
—
|
|
Financial instruments carried at fair value (liability positions):
|
|
|
|
|
|
|
|
||||||||
Other current liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(5,533
|
)
|
|
$
|
—
|
|
|
$
|
(5,533
|
)
|
|
$
|
—
|
|
Long-term contingent consideration
|
(176,500
|
)
|
|
—
|
|
|
—
|
|
|
(176,500
|
)
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
(1,821
|
)
|
|
—
|
|
|
(1,821
|
)
|
|
—
|
|
||||
Total financial liabilities
|
$
|
(183,854
|
)
|
|
$
|
—
|
|
|
$
|
(7,354
|
)
|
|
$
|
(176,500
|
)
|
|
Three Months Ended March 31, 2020
|
||
|
(in thousands)
|
||
Balance at December 31, 2019
|
$
|
176,500
|
|
Increase in fair value of contingent payments
|
1,600
|
|
|
Balance at March 31, 2020
|
$
|
178,100
|
|
F.
|
Marketable Securities and Equity Investments
|
|
Amortized Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
As of March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,736,913
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,736,913
|
|
Commercial paper
|
30,700
|
|
|
4
|
|
|
(4
|
)
|
|
30,700
|
|
||||
Total cash equivalents
|
1,767,613
|
|
|
4
|
|
|
(4
|
)
|
|
1,767,613
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Government-sponsored enterprise securities
|
7,717
|
|
|
74
|
|
|
—
|
|
|
7,791
|
|
||||
Corporate debt securities
|
305,808
|
|
|
255
|
|
|
(1,012
|
)
|
|
305,051
|
|
||||
Commercial paper
|
118,542
|
|
|
426
|
|
|
(4
|
)
|
|
118,964
|
|
||||
Total marketable debt securities
|
432,067
|
|
|
755
|
|
|
(1,016
|
)
|
|
431,806
|
|
||||
Corporate equity securities
|
87,096
|
|
|
78,082
|
|
|
—
|
|
|
165,178
|
|
||||
Total marketable securities
|
$
|
519,163
|
|
|
$
|
78,837
|
|
|
$
|
(1,016
|
)
|
|
$
|
596,984
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
791,039
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
791,039
|
|
Corporate debt securities
|
6,070
|
|
|
—
|
|
|
—
|
|
|
6,070
|
|
||||
Commercial paper
|
29,470
|
|
|
3
|
|
|
(1
|
)
|
|
29,472
|
|
||||
Total cash equivalents
|
826,579
|
|
|
3
|
|
|
(1
|
)
|
|
826,581
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Government-sponsored enterprise securities
|
12,689
|
|
|
44
|
|
|
—
|
|
|
12,733
|
|
||||
Corporate debt securities
|
301,458
|
|
|
391
|
|
|
(50
|
)
|
|
301,799
|
|
||||
Commercial paper
|
102,240
|
|
|
121
|
|
|
(5
|
)
|
|
102,356
|
|
||||
Total marketable debt securities
|
416,387
|
|
|
556
|
|
|
(55
|
)
|
|
416,888
|
|
||||
Corporate equity securities
|
113,829
|
|
|
168,255
|
|
|
—
|
|
|
282,084
|
|
||||
Total marketable securities
|
$
|
530,216
|
|
|
$
|
168,811
|
|
|
$
|
(55
|
)
|
|
$
|
698,972
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
1,767,613
|
|
|
$
|
826,581
|
|
Marketable securities
|
431,806
|
|
|
416,888
|
|
||
Total
|
$
|
2,199,419
|
|
|
$
|
1,243,469
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||
|
(in thousands)
|
||||||
Matures within one year
|
$
|
2,157,586
|
|
|
$
|
1,137,942
|
|
Matures after one year through five years
|
41,833
|
|
|
105,527
|
|
||
Total
|
$
|
2,199,419
|
|
|
$
|
1,243,469
|
|
G.
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
Unrealized Holding Gains (Losses), Net of Tax
|
|
|
||||||||||
|
Foreign Currency Translation Adjustment
|
|
On Available-For-Sale Debt Securities
|
|
On Foreign Currency Forward Contracts
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at December 31, 2019
|
$
|
(895
|
)
|
|
$
|
503
|
|
|
$
|
(1,581
|
)
|
|
$
|
(1,973
|
)
|
Other comprehensive (loss) income before reclassifications
|
(2,662
|
)
|
|
(764
|
)
|
|
25,772
|
|
|
22,346
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
(6,990
|
)
|
|
(6,990
|
)
|
||||
Net current period other comprehensive (loss) income
|
(2,662
|
)
|
|
(764
|
)
|
|
18,782
|
|
|
15,356
|
|
||||
Balance at March 31, 2020
|
$
|
(3,557
|
)
|
|
$
|
(261
|
)
|
|
$
|
17,201
|
|
|
$
|
13,383
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2018
|
$
|
(11,227
|
)
|
|
$
|
(536
|
)
|
|
$
|
12,422
|
|
|
$
|
659
|
|
Other comprehensive income before reclassifications
|
4,967
|
|
|
596
|
|
|
5,126
|
|
|
10,689
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
(5,348
|
)
|
|
(5,348
|
)
|
||||
Net current period other comprehensive income (loss)
|
4,967
|
|
|
596
|
|
|
(222
|
)
|
|
5,341
|
|
||||
Balance at March 31, 2019
|
$
|
(6,260
|
)
|
|
$
|
60
|
|
|
$
|
12,200
|
|
|
$
|
6,000
|
|
H.
|
Hedging
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||
Foreign Currency
|
(in thousands)
|
||||||
Euro
|
$
|
581,764
|
|
|
$
|
501,197
|
|
British pound sterling
|
124,160
|
|
|
87,032
|
|
||
Australian dollar
|
74,643
|
|
|
89,705
|
|
||
Canadian dollar
|
46,390
|
|
|
50,452
|
|
||
Total foreign currency forward contracts
|
$
|
826,957
|
|
|
$
|
728,386
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Designated as hedging instruments - Reclassified from AOCI
|
|
|
|
||||
Product revenues, net
|
$
|
8,922
|
|
|
$
|
6,839
|
|
Not designated as hedging instruments
|
|
|
|
||||
Other (expense) income, net
|
$
|
16,229
|
|
|
$
|
3,151
|
|
|
|
|
|
||||
Total reported in the Condensed Consolidated Statement of Operations
|
|
|
|
||||
Product revenues, net
|
$
|
1,515,107
|
|
|
$
|
857,253
|
|
Other (expense) income, net
|
$
|
(61,130
|
)
|
|
$
|
42,610
|
|
As of March 31, 2020
|
||||||||||
Assets
|
|
Liabilities
|
||||||||
Classification
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
||||
(in thousands)
|
||||||||||
Prepaid expenses and other current assets
|
|
$
|
25,434
|
|
|
Other current liabilities
|
|
$
|
(459
|
)
|
Other assets
|
|
1,798
|
|
|
Other long-term liabilities
|
|
(637
|
)
|
||
Total assets
|
|
$
|
27,232
|
|
|
Total liabilities
|
|
$
|
(1,096
|
)
|
As of December 31, 2019
|
||||||||||
Assets
|
|
Liabilities
|
||||||||
Classification
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
||||
(in thousands)
|
||||||||||
Prepaid expenses and other current assets
|
|
$
|
9,725
|
|
|
Other current liabilities
|
|
$
|
(5,533
|
)
|
Other assets
|
|
—
|
|
|
Other long-term liabilities
|
|
(1,821
|
)
|
||
Total assets
|
|
$
|
9,725
|
|
|
Total liabilities
|
|
$
|
(7,354
|
)
|
|
As of March 31, 2020
|
||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Gross Amounts Presented
|
|
Gross Amounts Not Offset
|
|
Legal Offset
|
||||||||||
Foreign currency forward contracts
|
(in thousands)
|
||||||||||||||||||
Total assets
|
$
|
27,232
|
|
|
$
|
—
|
|
|
$
|
27,232
|
|
|
$
|
(1,096
|
)
|
|
$
|
26,136
|
|
Total liabilities
|
(1,096
|
)
|
|
—
|
|
|
(1,096
|
)
|
|
1,096
|
|
|
—
|
|
|
As of December 31, 2019
|
||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Gross Amounts Presented
|
|
Gross Amounts Not Offset
|
|
Legal Offset
|
||||||||||
Foreign currency forward contracts
|
(in thousands)
|
||||||||||||||||||
Total assets
|
$
|
9,725
|
|
|
$
|
—
|
|
|
$
|
9,725
|
|
|
$
|
(7,354
|
)
|
|
$
|
2,371
|
|
Total liabilities
|
(7,354
|
)
|
|
—
|
|
|
(7,354
|
)
|
|
7,354
|
|
|
—
|
|
I.
|
Inventories
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
24,835
|
|
|
$
|
26,247
|
|
Work-in-process
|
117,427
|
|
|
107,021
|
|
||
Finished goods
|
44,825
|
|
|
34,234
|
|
||
Total
|
$
|
187,087
|
|
|
$
|
167,502
|
|
J.
|
Stock-based Compensation Expense and Share Repurchase Programs
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Stock-based compensation expense by type of award:
|
|
|
|
||||
Restricted stock and restricted stock units (including PSUs)
|
$
|
97,149
|
|
|
$
|
63,510
|
|
Stock options
|
17,266
|
|
|
28,156
|
|
||
ESPP share issuances
|
2,485
|
|
|
2,577
|
|
||
Stock-based compensation expense related to inventories
|
(1,194
|
)
|
|
(452
|
)
|
||
Total stock-based compensation expense included in costs and expenses
|
$
|
115,706
|
|
|
$
|
93,791
|
|
|
|
|
|
|
|||
Stock-based compensation expense by line item:
|
|
|
|
|
|||
Cost of sales
|
$
|
1,361
|
|
|
$
|
1,338
|
|
Research and development expenses
|
72,687
|
|
|
59,715
|
|
||
Sales, general and administrative expenses
|
41,658
|
|
|
32,738
|
|
||
Total stock-based compensation expense included in costs and expenses
|
115,706
|
|
|
93,791
|
|
||
Income tax effect
|
(64,246
|
)
|
|
(39,524
|
)
|
||
Total stock-based compensation expense, net of tax
|
$
|
51,460
|
|
|
$
|
54,267
|
|
|
As of March 31, 2020
|
||||
|
Unrecognized Expense
|
|
Weighted-average
Recognition Period |
||
|
(in thousands)
|
|
(in years)
|
||
Type of award:
|
|
|
|
||
Restricted stock and restricted stock units (including PSUs)
|
$
|
550,095
|
|
|
2.27
|
Stock options
|
$
|
109,086
|
|
|
2.33
|
ESPP share issuances
|
$
|
2,238
|
|
|
0.40
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Number
Outstanding |
|
Weighted-average
Remaining Contractual Life |
|
Weighted-average
Exercise Price |
|
Number
Exercisable |
|
Weighted-average
Exercise Price |
||||||
|
|
(in thousands)
|
|
(in years)
|
|
(per share)
|
|
(in thousands)
|
|
(per share)
|
||||||
$29.07–$40.00
|
|
81
|
|
|
1.47
|
|
$
|
37.70
|
|
|
81
|
|
|
$
|
37.70
|
|
$40.01–$60.00
|
|
224
|
|
|
2.41
|
|
$
|
49.15
|
|
|
224
|
|
|
$
|
49.15
|
|
$60.01–$80.00
|
|
116
|
|
|
4.03
|
|
$
|
74.89
|
|
|
112
|
|
|
$
|
74.89
|
|
$80.01–$100.00
|
|
1,393
|
|
|
5.99
|
|
$
|
89.44
|
|
|
1,085
|
|
|
$
|
90.01
|
|
$100.01–$120.00
|
|
182
|
|
|
4.88
|
|
$
|
109.25
|
|
|
180
|
|
|
$
|
109.18
|
|
$120.01–$140.00
|
|
402
|
|
|
5.44
|
|
$
|
129.59
|
|
|
400
|
|
|
$
|
129.61
|
|
$140.01–$160.00
|
|
954
|
|
|
7.86
|
|
$
|
155.50
|
|
|
436
|
|
|
$
|
155.41
|
|
$160.01–$180.00
|
|
669
|
|
|
8.24
|
|
$
|
168.21
|
|
|
245
|
|
|
$
|
165.11
|
|
$180.01–$189.38
|
|
1,498
|
|
|
8.65
|
|
$
|
185.44
|
|
|
440
|
|
|
$
|
185.31
|
|
Total
|
|
5,519
|
|
|
6.98
|
|
$
|
137.34
|
|
|
3,203
|
|
|
$
|
119.05
|
|
K.
|
Income Taxes
|
L.
|
Commitments and Contingencies
|
M.
|
Additional Cash Flow Information
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||
|
Beginning of period
|
|
End of period
|
|
Beginning of period
|
|
End of period
|
||||||||
|
(in thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
3,109,322
|
|
|
$
|
3,593,412
|
|
|
$
|
2,650,134
|
|
|
$
|
2,893,885
|
|
Prepaid expenses and other current assets
|
8,004
|
|
|
8,552
|
|
|
4,910
|
|
|
6,250
|
|
||||
Other assets
|
3,355
|
|
|
—
|
|
|
3,209
|
|
|
1,397
|
|
||||
Cash, cash equivalents and restricted cash per statement of cash flows
|
$
|
3,120,681
|
|
|
$
|
3,601,964
|
|
|
$
|
2,658,253
|
|
|
$
|
2,901,532
|
|
•
|
The majority of the approximately 18,000 eligible patients in the United States have now initiated treatment with TRIKAFTA following its approval in October 2019.
|
•
|
The MAA for the elexacaftor, tezacaftor and ivacaftor triple combination in patients 12 years of age and older with at least one F508del mutation that we submitted in 2019 is being reviewed by the EMA.
|
•
|
We recently submitted our applications for approval of the elexacaftor, tezacaftor and ivacaftor triple combination for patients 12 years of age and older with at least one F508del mutation in Australia and Switzerland.
|
•
|
We recently completed enrollment for a Phase 3 clinical trial evaluating the use of the elexacaftor, tezacaftor and ivacaftor triple combination in children 6 to 11 years of age with CF who have two copies of the F508del mutation or who have one F508del mutation and one minimal function mutation. If the data from this clinical trial is positive, we plan to submit a supplemental New Drug Application, or sNDA, to the FDA in the second half of 2020 for children 6 to 11 years of age with at least one F508del mutation, followed by regulatory submissions in other countries.
|
•
|
We recently completed the submission of an sNDA to the FDA and Type 2 variation to the EMA for the use of KALYDECO in patients four to less than six months of age.
|
•
|
AAT Deficiency: We temporarily paused screening and enrollment in the Phase 2 proof-of-concept clinical trial for VX-814, our first investigational oral small molecule corrector for the treatment of alpha-1 antitrypsin, or AAT, deficiency, in patients with AAT deficiency who have two copies of the Z mutation. The Phase 2 clinical trial remains active and we continue to initiate new trial sites to enable future patient enrollment.
|
•
|
Focal Segmental Glomerulosclerosis: We recently initiated a Phase 2 proof-of-concept clinical trial designed to evaluate the reduction in proteinuria in patients with APOL1-mediated focal segmental glomerulosclerosis, or FSGS, receiving treatment with VX-147.
|
•
|
Beta Thalassemia and Sickle Cell Disease: We and our collaborator, CRISPR, expect to provide additional data from the two ongoing Phase 1/2 clinical trials of the investigational CRISPR/Cas9 gene-editing therapy CTX001, in patients with transfusion-dependent beta thalassemia and in patients with severe sickle cell disease in 2020.
|
•
|
T1D: We continue to advance our cell therapy program for the treatment of T1D and expect to initiate clinical development in patients in late 2020 or early 2021.
|
•
|
Affinia Therapeutics: In April 2020, we entered into a collaboration with Affinia Therapeutics Inc. to gain access to a novel library of AAV capsids to support our ongoing research and development efforts in genetic therapies. The goal of the collaboration will be to develop gene therapies for people affected by DMD, DM1 and CF.
|
•
|
Moderna: Based on preclinical data generated to date, we recently extended our collaboration with Moderna, aimed at the discovery and development of messenger ribonucleic acid, or mRNA, therapeutics for the treatment of CF.
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Revenues
|
$
|
1,515,107
|
|
|
$
|
858,435
|
|
|
$
|
656,672
|
|
|
76
|
%
|
Operating costs and expenses
|
794,883
|
|
|
581,627
|
|
|
213,256
|
|
|
37
|
%
|
|||
Income from operations
|
720,224
|
|
|
276,808
|
|
|
443,416
|
|
|
160
|
%
|
|||
Other non-operating (expense) income, net
|
(62,690
|
)
|
|
43,357
|
|
|
**
|
|
|
**
|
|
|||
Provision for income taxes
|
54,781
|
|
|
51,534
|
|
|
3,247
|
|
|
6
|
%
|
|||
Net income
|
$
|
602,753
|
|
|
$
|
268,631
|
|
|
$
|
334,122
|
|
|
124
|
%
|
|
|
|
|
|
|
|
|
|||||||
Net income per diluted common share
|
$
|
2.29
|
|
|
$
|
1.03
|
|
|
|
|
|
|||
Diluted shares used in per share calculations
|
263,515
|
|
|
260,175
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
** Not meaningful
|
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Product revenues, net
|
$
|
1,515,107
|
|
|
$
|
857,253
|
|
|
$
|
657,854
|
|
|
77
|
%
|
Collaborative and royalty revenues
|
—
|
|
|
1,182
|
|
|
(1,182
|
)
|
|
**
|
|
|||
Total revenues
|
$
|
1,515,107
|
|
|
$
|
858,435
|
|
|
$
|
656,672
|
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
** Not meaningful
|
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
TRIKAFTA
|
$
|
895,233
|
|
|
$
|
—
|
|
|
$
|
895,233
|
|
|
**
|
|
SYMDEKO/SYMKEVI
|
173,159
|
|
|
320,275
|
|
|
(147,116
|
)
|
|
(46
|
)%
|
|||
ORKAMBI
|
234,138
|
|
|
293,007
|
|
|
(58,869
|
)
|
|
(20
|
)%
|
|||
KALYDECO
|
212,577
|
|
|
243,971
|
|
|
(31,394
|
)
|
|
(13
|
)%
|
|||
Total product revenues, net
|
$
|
1,515,107
|
|
|
$
|
857,253
|
|
|
$
|
657,854
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
** Not meaningful
|
|
`
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Cost of sales
|
$
|
162,497
|
|
|
$
|
95,092
|
|
|
$
|
67,405
|
|
|
71
|
%
|
Research and development expenses
|
448,528
|
|
|
339,490
|
|
|
109,038
|
|
|
32
|
%
|
|||
Sales, general and administrative expenses
|
182,258
|
|
|
147,045
|
|
|
35,213
|
|
|
24
|
%
|
|||
Change in fair value of contingent consideration
|
1,600
|
|
|
—
|
|
|
1,600
|
|
|
**
|
|
|||
Total costs and expenses
|
$
|
794,883
|
|
|
$
|
581,627
|
|
|
$
|
213,256
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
** Not Meaningful
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Research expenses
|
$
|
157,270
|
|
|
$
|
90,463
|
|
|
$
|
66,807
|
|
|
74
|
%
|
Development expenses
|
291,258
|
|
|
249,027
|
|
|
42,231
|
|
|
17
|
%
|
|||
Total research and development expenses
|
$
|
448,528
|
|
|
$
|
339,490
|
|
|
$
|
109,038
|
|
|
32
|
%
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Research Expenses:
|
|
|
|
|
|
|
|
|||||||
Salary and benefits
|
$
|
34,269
|
|
|
$
|
24,379
|
|
|
$
|
9,890
|
|
|
41
|
%
|
Stock-based compensation expense
|
26,409
|
|
|
17,535
|
|
|
8,874
|
|
|
51
|
%
|
|||
Outsourced services and other direct expenses
|
30,853
|
|
|
23,364
|
|
|
7,489
|
|
|
32
|
%
|
|||
Collaboration and asset acquisition payments
|
36,250
|
|
|
—
|
|
|
36,250
|
|
|
**
|
|
|||
Infrastructure costs
|
29,489
|
|
|
25,185
|
|
|
4,304
|
|
|
17
|
%
|
|||
Total research expenses
|
$
|
157,270
|
|
|
$
|
90,463
|
|
|
$
|
66,807
|
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
** Not meaningful
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Development Expenses:
|
|
|
|
|
|
|
|
|||||||
Salary and benefits
|
$
|
79,598
|
|
|
$
|
60,507
|
|
|
$
|
19,091
|
|
|
32
|
%
|
Stock-based compensation expense
|
46,278
|
|
|
42,180
|
|
|
4,098
|
|
|
10
|
%
|
|||
Outsourced services and other direct expenses
|
116,433
|
|
|
97,768
|
|
|
18,665
|
|
|
19
|
%
|
|||
Collaboration and asset acquisition payments
|
—
|
|
|
5,250
|
|
|
(5,250
|
)
|
|
**
|
|
|||
Infrastructure costs
|
48,949
|
|
|
43,322
|
|
|
5,627
|
|
|
13
|
%
|
|||
Total development expenses
|
$
|
291,258
|
|
|
$
|
249,027
|
|
|
$
|
42,231
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
** Not meaningful
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Sales, general and administrative expenses
|
$
|
182,258
|
|
|
$
|
147,045
|
|
|
$
|
35,213
|
|
|
24
|
%
|
|
March 31,
|
|
December 31,
|
|
Increase/(Decrease)
|
|||||||||
|
2020
|
|
2019
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Cash, cash equivalents and marketable securities
|
$
|
4,190,396
|
|
|
$
|
3,808,294
|
|
|
$
|
382,102
|
|
|
10
|
%
|
Working Capital
|
|
|
|
|
|
|
|
|||||||
Total current assets
|
5,446,400
|
|
|
4,822,829
|
|
|
623,571
|
|
|
13
|
%
|
|||
Total current liabilities
|
(1,538,750
|
)
|
|
(1,334,827
|
)
|
|
203,923
|
|
|
15
|
%
|
|||
Total working capital
|
$
|
3,907,650
|
|
|
$
|
3,488,002
|
|
|
$
|
419,648
|
|
|
12
|
%
|
•
|
significant expected operating expenses to conduct research and development activities and to operate our organization; and
|
•
|
substantial facility and capital lease obligations, including leases for two buildings in Boston, Massachusetts that continue through 2028.
|
•
|
We have entered into certain collaboration agreements with third parties that include the funding of certain research, development and commercialization efforts with the potential for future milestone and royalty payments by us upon the achievement of pre-established developmental and regulatory targets and/or commercial targets, and we may enter into additional business development transactions, including acquisitions, collaborations and equity investments, that require additional capital.
|
•
|
We have reached an agreement with the French government and will repay a portion of the amounts we have collected under the ORKAMBI early access programs in France to the French government in 2020 based on the difference between the invoiced amount and the final amount for ORKAMBI distributed through these programs as reflected in the structure of the agreement with the French government.
|
•
|
To the extent we borrow amounts under the credit agreement we entered into in 2019, we would be required to repay any outstanding principal amounts in 2024.
|
•
|
As of March 31, 2020, $164.0 million remained available to fund repurchases under our share repurchase program.
|
•
|
our expectations regarding the amount of, timing of and trends with respect to our revenues, costs and expenses and other gains and losses, including those related to net product revenues;
|
•
|
our expectations regarding the effect of COVID-19 on, among other things, our financial performance, business and operations;
|
•
|
our expectations regarding clinical trials, development timelines and regulatory authority filings and submissions for ivacaftor, lumacaftor, tezacaftor, elexacaftor, and the timelines for regulatory filings for our triple combination regimen;
|
•
|
our ability to obtain reimbursement for our medicines in ex-U.S. markets and our ability to otherwise successfully market our medicines or any of our other drug candidates for which we obtain regulatory approval;
|
•
|
our expectations regarding the timing and structure of clinical trials of our drugs and drug candidates and the expected timing of our receipt of data from our ongoing and planned clinical trials;
|
•
|
the data that will be generated by ongoing and planned clinical trials and the ability to use that data to advance compounds, continue development or support regulatory filings;
|
•
|
our beliefs regarding the support provided by clinical trials and preclinical and nonclinical studies of our drug candidates for further investigation, clinical trials or potential use as a treatment;
|
•
|
our plan to continue investing in our research and development programs and our strategy to develop our drug candidates, alone or with third party-collaborators;
|
•
|
the potential future benefits of our acquisitions and collaborations;
|
•
|
the establishment, development and maintenance of collaborative relationships;
|
•
|
potential business development activities;
|
•
|
potential fluctuations in foreign currency exchange rates;
|
•
|
our ability to use our research programs to identify and develop new drug candidates to address serious diseases and significant unmet medical needs; and
|
•
|
our liquidity and our expectations regarding the possibility of raising additional capital.
|
Period
|
|
Total Number
of Shares Purchased |
Average Price
Paid per Share |
Total Number of Shares
Purchased as Part of Publicly Announced Plans or Programs (1) |
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1)
|
January 1, 2020 to January 31, 2020
|
—
|
$—
|
—
|
$464,000
|
|
February 1, 2020 to February 29, 2020
|
54,579
|
$219.86
|
54,579
|
$452,001
|
|
March 1, 2020 to March 31, 2020
|
1,349,289
|
$213.44
|
1,349,289
|
$164,002
|
|
Total
|
1,403,868
|
$213.69
|
1,403,868
|
$164,002
|
Exhibit Number
|
Exhibit Description
|
3.2
|
|
10.1
|
Employment Agreement, dated as of April 1, 2020, between Vertex Pharmaceuticals Incorporated and Dr. Jeffrey M. Leiden (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 1, 2020).*
|
31.1
|
|
31.2
|
|
32.1
|
|
101.INS
|
XBRL Instance
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation
|
101.LAB
|
XBRL Taxonomy Extension Labels
|
101.PRE
|
XBRL Taxonomy Extension Presentation
|
101.DEF
|
XBRL Taxonomy Extension Definition
|
|
* Management contract, compensatory plan or agreement.
|
|
Vertex Pharmaceuticals Incorporated
|
|
|
|
|
May 1, 2020
|
By:
|
/s/ Charles F. Wagner, Jr.
|
|
|
Charles F. Wagner, Jr.
|
|
|
Executive Vice President, Chief Financial Officer
(principal financial officer and duly authorized officer) |
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Vertex Pharmaceuticals Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
May 1, 2020
|
/s/ Reshma Kewalramani
|
|
|
|
|
|
Reshma Kewalramani
|
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Vertex Pharmaceuticals Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
May 1, 2020
|
/s/ Charles F. Wagner, Jr.
|
|
|
|
|
|
Charles F. Wagner, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
May 1, 2020
|
|
|
|
/s/ Reshma Kewalramani
|
|
|
|
|
|
Reshma Kewalramani
|
|
|
Chief Executive Officer and President
|
|
|
|
Date:
|
May 1, 2020
|
|
|
|
/s/ Charles F. Wagner, Jr.
|
|
|
|
|
|
Charles F. Wagner, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
|
|