About Vertex Pharmaceuticals Incorporated
Vertex Pharmaceuticals is focused on developing treatments for cystic fibrosis (CF) and other life-threatening diseases. The biotechnology firm has four commercial drugs -- Trikafta, Orkambi, Kalydeco, and Symdeko/Symkevi -- used to treat CF. Vertex has other drugs in development including additional CF treatments and medications addressing sickle cell disease, beta thalassemia, alpha-1 antitrypsin deficiency, and pain. The company's medicines are sold in North America, Europe, and Australia; the US accounts for about three-fourths of revenue.
Vertex gets most of its revenue from sales of Symdeko/Symkevi (about 35%), Orkambi (more than 30%), Kalydeco (about 25%), and Trikafta (10%). It also receives a small amount of collaboration and royalty revenue.
The company's four CF treatments address underlying causes of cystic fibrosis that impact approximately 60% of all CF patients in North America, Europe, and Australia. Its CF therapy regimens in clinical development that could extend its reach to about 90% of all CF patients also pursuing other therapeutic approaches to address the remaining 10% of CF patients.
The company has expanded its research capabilities to include additional innovative therapeutic approaches with a focus on cell and genetic therapies, including collaboration with CRISPR in hemoglobinopathies and other diseases, establishment of preclinical genetic therapy programs for DMD and DM1, through its acquisition of Exonics, and establishment of a preclinical program to develop cell-based therapies for type 1 diabetes through its acquisition of Semma.
US-based Vertex is headquartered in Boston with an international headquarters in London. The company has R&D sites in the US and the UK; it has commercial offices in Australia, Austria, Brazil, Canada, Czech Republic, France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and Switzerland.
The US accounts for about three-fourths of Vertex's revenue, followed by Europe, which accounts for about 20%.
Sales and Marketing
Vertex markets its products to physicians through a direct sales force in countries where its medicines are approved.
Products are sold through specialty pharmacies and distributors in the US; international customers include distributors, retailers, hospitals, and clinics. Its customers in the US subsequently resell Vertex's products to patients and health care providers. It also contracts with government agencies so that the products will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. Its top customers, McKensson, Walgreen, and Accredo brings in about 15% each of total revenue.
Vertex has increased its revenue exponentially over the past five years, growing from $1 billion in 2015 to almost $4.2 billion in 2019. The company reported positive net income in the last three years after a period of losses.
The company's revenue of almost $4.2 billion in 2019 marked a 37% increase over 2018 sales. Growth was attributed to product revenue increase as it obtained approvals for TRIKAFTA and SYMDEKO/SYMKEVI and expanded access to its medicines.
Net income attributable to Vertex was $1.2 billion in 2019, a decrease of 44% from the prior year. The decrease was due to higher cost of sales, a $338 million increase in R&D expenses, and higher general and administrative expenses.
The company ended 2019 with over $3.1 billion in cash, up $462.4 million from 2018. Operating activities contributed $1.6 billion and financing activities added another $126.8 million. Investing activities used $1.2 billion for business acquisitions and purchases of securities.
Vertex invests in research and development in order to discover and develop transformative medicines for people with serious diseases. Its strategy is to combine transformative advances in the understanding of the human disease and the science of therapeutics in order to identify and develop new medicines. Its approach to drug discovery historically focused on the research and development of small molecule drugs, which has been validated through its success in moving novel small molecule drug candidates into clinical trials and obtaining marketing approvals for TRIKAFTA, KALYDECO, ORKAMBI and SYMDEKO/SYMKEVI for the treatment of CF and INCIVEK (telaprevir) for the treatment of hepatitis C infection. Over the last several years, it has expanded its research capabilities to include additional innovative therapeutic approaches with a focus on cell and genetic therapies.
As part of its business strategy, it seeks to license or acquire drugs, drug candidates, businesses and other technologies that have the potential to complement its ongoing research and development efforts. In addition, it establishes business relationships with collaborators to support its research activities and to lead or support the development and/or commercialization of certain drug candidates. It expects to continue to identify and evaluate potential acquisitions, licenses and collaborations that may be similar or different from the transactions that it has engaged in previously.
In 2019, the company acquired Exonics, a privately-held company focused on creating transformative gene-editing therapies to repair mutations that cause DMD and other severe neuromuscular diseases, and Semma, a privately-held company focused on the use of stem cell-derived human islets as a potentially curative treatment for T1D.
In connection with its business development activities, it periodically makes equity investments in its collaborators. It holds strategic equity investments in public companies, including CRISPR, Moderna Therapeutics and Molecular Templates, as well as certain private companies, including Arbor Biotechnologies, Kymera Therapeutics and Ribometrix. It may make additional strategic equity investments in public or private companies in the future.
Mergers and Acquisitions
The company acquired biotech firm Semma Therapeutics for $950 million in 2019. The purchase will give Vertex a potential treatment for Type 1 diabetes using stem cell-derived human islets.
Vertex also acquired Exonics Therapeutics that year for $245 million plus potential additional milestone payments. Exonics is developing treatments for Duchenne Muscular Dystrophy (DMD) and Myotonic Dystrophy Type 1 (DM1) using a gene-editing technology; Vertex expanded its agreement with CRISPR Therapeutics in connection with the deal.
In 1989 venture capitalist Kevin Kinsella and research chemist Joshua Boger teamed up to form Vertex Pharmaceuticals to pursue "rational" drug design intended to cut the time and costs of bringing a drug to market. The company went public in 1991.
The firm's blockbuster hepatitis C treatment Incivek was approved in 2011, but sales were discontinued in 2014 after Gilead's popular Sovaldi hit the market. Orphan CF drugs Kalydeco and Orkambi were approved in 2012 and 2015, respectively.
50 Northern Ave
Boston, MA 02210-1862
Phone: 1 (617) 341-6100
Employer Type: Publicly Owned
Stock Symbol: VRTX
Stock Exchange: , NASDAQ
SVP and CFO: Thomas Graney
Chairman, President, and CEO: Jeffrey M. Leiden
EVP and COO: Ian F. Smith
Employees (This Location): 320
Employees (All Locations): 3,000