— Full year product revenue of $8.93 billion, an 18% increase compared to full year 2021 —

— Full year GAAP and non-GAAP net income increased 42% and 53%, respectively, versus 2021—

— Company provides full year 2023 product revenue guidance of $9.55 to $9.7 billion —

— Exa-cel regulatory submissions validated in the EU and U.K.; U.S. rolling BLA submission underway —

— Advancing broad and diverse clinical pipeline, with multiple clinical milestones expected in 2023 —

BOSTON--(BUSINESS WIRE)-- Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated financial results for the fourth quarter and full year ended December 31, 2022 and provided full year 2023 financial guidance.

“Outstanding execution across the company resulted in another year of strong revenue growth as well as acceleration of both the research and clinical-stage pipeline,” said Reshma Kewalramani, M.D., Chief Executive Officer and President of Vertex. “Our progress in 2022 lays the foundation for treating more people with cystic fibrosis, launching multiple new therapies in the near term, achieving important clinical milestones, and driving continued significant growth for many years to come.”

Fourth Quarter and Full Year 2022 Financial Highlights

Full Year 2022 Results

Product revenue increased 18% to $8.93 billion compared to 2021, primarily driven by the rapid uptake of TRIKAFTA/KAFTRIO in multiple countries internationally and the continued performance of TRIKAFTA in the U.S. Net product revenue in 2022 increased 8% to $5.70 billion in the U.S. and increased 41% to $3.23 billion outside the U.S., compared to 2021.

GAAP and Non-GAAP net income increased by 42% and 53%, respectively, compared to 2021, primarily due to strong product revenue growth and lower acquired in-process research and development expenses (“Acquired IPR&D”). Increased revenues were partially offset by increased investments in our mid- and late-stage clinical pipeline, the costs to support the launches of Vertex’s therapies globally, and higher income taxes. Acquired IPR&D in 2021 included a one-time $900 million payment Vertex made in connection with the amendment of the collaboration with CRISPR Therapeutics in the second quarter of 2021.

Cash, cash equivalents and marketable securities as of December 31, 2022 were $10.8 billion, compared to $7.5 billion as of December 31, 2021. The increase was primarily driven by strong revenue growth and operating cash flow, partially offset by income tax payments and our acquisition of ViaCyte.

Full Year 2022 Expenses

Combined GAAP and Non-GAAP R&D, Acquired IPR&D and SG&A expenses decreased compared to 2021, primarily due to lower Acquired IPR&D as a result of the one-time $900 million payment to CRISPR in the second quarter of 2021, partially offset by increased investment in support of multiple programs that have advanced in mid- and late-stage clinical development and the costs to support launches of Vertex’s therapies globally.

GAAP and Non-GAAP income taxes increased compared to 2021, primarily due to Vertex’s increased pre-tax income resulting from strong product revenue growth and lower expenses, as a result of the $900 million payment to CRISPR in the second quarter of 2021. GAAP income taxes also included the impact of discrete tax items in both 2022 and 2021. Please refer to Note 1 for further details.

Fourth Quarter 2022 Results

Product revenue increased 11% to $2.30 billion compared to the fourth quarter of 2021, primarily driven by the strong uptake of TRIKAFTA/KAFTRIO in multiple countries internationally and continued performance of TRIKAFTA in the U.S. Net product revenue in the fourth quarter of 2022 increased 5% to $1.46 billion in the U.S. and increased 24% to $842 million outside the U.S., compared to the fourth quarter of 2021.

GAAP and Non-GAAP net income increased by 6% and 26%, respectively, compared to the fourth quarter of 2021, primarily driven by strong revenue growth and lower Acquired IPR&D, partially offset by increased investment in our mid- and late-stage clinical pipeline, the costs to support launches of Vertex’s therapies globally, and higher income taxes.

Fourth Quarter 2022 Expenses

Combined GAAP and Non-GAAP R&D, Acquired IPR&D and SG&A expenses increased compared to the fourth quarter of 2021, due to increased investment in support of multiple programs that have advanced in mid- and late-stage clinical development and the costs to support launches of Vertex's therapies globally.

GAAP and Non-GAAP income taxes increased compared to the fourth quarter of 2021, primarily due to Vertex’s increased pre-tax income. GAAP income taxes also included the impact of discrete tax items in the fourth quarters of 2022 and 2021. Please refer to Note 1 for further details.

Share Repurchase Program

On February 1, Vertex’s Board of Directors approved a new share repurchase program, authorizing the repurchase of up to $3.0 billion of our common stock. The program does not have an expiration date and can be discontinued at any time. Please refer to Note 2 for further details.

Full Year 2023 Financial Guidance

Vertex today provided full year 2023 financial guidance. Vertex’s CF product revenue guidance includes expectations in the U.S. for continued performance of TRIKAFTA in ages 6+ and approval and launch of TRIKAFTA in the 2-5 age group, as well as continued uptake of KAFTRIO/TRIKAFTA in ages 6+ in countries outside the U.S., including those with recent reimbursement agreements. This guidance includes an approximately 150-basis-point negative impact from changes in foreign currency rates, inclusive of our foreign exchange risk management program. Vertex’s combined Non-GAAP R&D, Acquired IPR&D and SG&A expense guidance includes expectations for continued investment in our multiple mid- and late-stage clinical development programs, commercial and manufacturing capabilities, and approximately $300 million of upfront and milestone payments from existing collaborations and our anticipated transaction with Entrada Therapeutics.

Vertex’s guidance is summarized below:

Key Business Highlights

Cystic Fibrosis (CF) Marketed Products

Vertex anticipates the number of CF patients taking our medicines will continue to grow, including through new approvals for the treatment of younger patients. Recent progress includes:

• Updated estimates of the number of people living with cystic fibrosis from 83,000 to 88,000 people in the U.S., Europe, Australia and Canada.
• Filed a Supplemental New Drug Application (sNDA) with the U.S. Food and Drug Administration (FDA) and a Marketing Authorization Application (MAA) with both the European Medicines Agency (EMA) and the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom for the use of TRIKAFTA/KAFTRIO in children 2 to 5 years of age. The FDA granted Priority Review designation and assigned a Prescription Drug User Fee Act (PDUFA) date of April 28, 2023.
• Filed an sNDA with the FDA and an MAA with the EMA for the use of KALYDECO in children from 1 month to