Vertex Pharmaceuticals Incorporated (VRTX)

Business

From the FY2025 Form 10-K, accession 0000875320-26-000056.

Vertex is a global biotechnology company that sells small-molecule and cell-therapy medicines for serious diseases, with a focus on specialty markets. It operates in one segment, pharmaceuticals, and essentially all of its revenue is product revenue from medicines it markets itself, sold principally to a limited number of specialty pharmacies, specialty distributors and major wholesalers in the U.S., and through distributor arrangements, retail pharmacies, hospitals and government-owned or government-supported customers outside the U.S. In 2025 the company generated $12.0 billion of total revenue, of which $7.5 billion came from the U.S. and $4.5 billion from ex-U.S. markets.

The revenue base is concentrated in cystic fibrosis (CF). Vertex markets five CFTR modulator medicines, ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor), TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), SYMDEKO/SYMKEVI (tezacaftor/ivacaftor and ivacaftor), ORKAMBI (lumacaftor/ivacaftor) and KALYDECO (ivacaftor). These are used by nearly three quarters of the approximately 97,000 people with CF in the U.S., Europe, Australia and Canada; the company estimates roughly 112,000 people with CF across all target markets, and its CF medicines are reimbursed or accessible in more than 60 countries across six continents. TRIKAFTA/KAFTRIO alone produced $10.3 billion of 2025 revenue. ALYFTREK, approved in December 2024 and the company's newest triple combination, offers once-daily dosing, demonstrated non-inferiority to TRIKAFTA on ppFEV1 and an improvement in sweat chloride, and contributed $837.8 million in its first year; management expects the majority of people with CF to transition to ALYFTREK over time.

Three newer franchises sit alongside CF:

• CASGEVY (exagamglogene autotemcel), an ex-vivo, non-viral CRISPR/Cas9 gene-edited cell therapy for severe sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT), approved in the U.S., E.U., U.K., Saudi Arabia, Bahrain, Qatar, the UAE, Kuwait, Switzerland and Canada for people 12 and older. Vertex estimates approximately 60,000 people with severe SCD or TDT are or could become eligible in those geographies. CASGEVY generated $115.8 million of 2025 revenue, reflecting 64 patients infused during the year (30 in the fourth quarter) and 147 first cell collections globally.
• JOURNAVX (suzetrigine), a first-in-class, oral, selective non-opioid NaV1.8 pain signal inhibitor approved in the U.S. in January 2025 for moderate-to-severe acute pain. It generated $59.6 million of 2025 revenue; more than 550,000 prescriptions were written and filled from pharmacy availability in March 2025 through year-end.
• Povetacicept, a dual BAFF/APRIL inhibitor acquired with Alpine Immune Sciences, in late-stage development for IgA nephropathy (IgAN) and the lead asset of an emerging nephrology franchise.

Pipeline. Vertex describes a "serial innovation" strategy: advancing multiple compounds per program and following first-in-class therapies with potential best-in-class candidates. Five pivotal programs were in flight at the 10-K: povetacicept in IgAN (Phase 3 RAINIER, enrollment complete, rolling BLA begun in Q4 2025 using a priority review voucher to shorten FDA review from ten months to six); inaxaplin in APOL1-mediated kidney disease (AMKD) in the Phase 2/3 AMPLITUDE trial; suzetrigine in diabetic peripheral neuropathy (two Phase 3 trials, Breakthrough Therapy Designation); povetacicept in primary membranous nephropathy (adaptive Phase 2/3); and zimislecel, a stem cell-derived islet cell therapy for type 1 diabetes (Phase 1/2/3). Earlier-stage work includes VX-407 in autosomal dominant polycystic kidney disease (AGLOW Phase 2), VX-670 in myotonic dystrophy type 1 (GALILEO Phase 1/2, partnered with Entrada), povetacicept in generalized myasthenia gravis, next-generation CFTR correctors (VX-828, VX-581, VX-272), VX-522 (mRNA for CF, with Moderna) and NaV1.7 inhibitors. Programs discontinued in 2025 include VX-264 (encapsulated islet cells for T1D, missed its efficacy endpoint) and VX-993 as monotherapy in acute pain.

Vertex frames its addressable populations as: IgAN roughly 330,000 people in the U.S. and Europe (more than 1.5 million diagnosed globally); AMKD roughly 150,000 in the U.S. and Europe plus about 100,000 with comorbidities such as type 2 diabetes; pMN roughly 150,000 in the U.S. and Europe and more than 600,000 globally; ADPKD roughly 300,000 diagnosed in the U.S. and Europe, of whom up to about 10% carry the PKD1 variants VX-407 targets; gMG roughly 175,000 in the U.S. and Europe; and DM1 roughly 110,000 in the U.S. and Europe.

Partnerships and external innovation. CASGEVY is governed by an amended and restated joint development and commercialization agreement with CRISPR Therapeutics AG, under which Vertex leads global development, manufacturing and commercialization and net profits and losses are split 60% Vertex / 40% CRISPR (other candidates under the agreement are shared equally). Either party may opt out of a candidate after set development points, dropping to a high single-digit to mid-teen royalty. Other arrangements include in-licenses from CRISPR (including DMD/DM1 gene editing and hypoimmune cell therapies for T1D), Moderna (VX-522), Entrada (VX-670), a non-exclusive CRISPR/Cas9 sublicense from Editas Medicine, and an exclusive global license from WuXi Biologics for a preclinical trispecific T cell engager. Povetacicept has been out-licensed for Asian markets, to Zai Lab (mainland China, Hong Kong SAR, Macau SAR, Taiwan region, Singapore) in January 2025 and to Ono Pharmaceuticals (Japan, South Korea) in June 2025, against future milestones and tiered royalties.

Acquisitions have been a recurring source of pipeline. Vertex acquired Alpine Immune Sciences in 2024 for approximately $5.0 billion, accounted for as an asset acquisition because povetacicept represented substantially all the fair value acquired; $4.4 billion was expensed to acquired in-process R&D (AIPR&D) in 2024. Earlier deals include Semma Therapeutics (2019) and ViaCyte (2022), which established the T1D program, and certain CF assets including deutivacaftor from Concert Pharmaceuticals (2017).

Royalties and intellectual property. Under the 2004 agreement with the Cystic Fibrosis Foundation (CFF), Vertex pays tiered third-party royalties on CF product sales ranging from single digits to the sub-teens, with lower rates on ALYFTREK and TRIKAFTA/KAFTRIO. The royalty burden on TRIKAFTA/KAFTRIO is 9.33%; Vertex's position is that ALYFTREK's is 4%. Basic product patent expirations as disclosed (before extensions): KALYDECO 2028 U.S./2027 Europe, ORKAMBI 2031/2030, SYMDEKO/SYMKEVI 2027/2033, TRIKAFTA/KAFTRIO 2037/2037, CASGEVY 2035/2034 (regulatory exclusivity), ALYFTREK 2039/2039, JOURNAVX 2040/2040.

Manufacturing combines internal small-molecule capability in Boston (including steps for TRIKAFTA/KAFTRIO commercial supply), internal cell therapy capacity in the Boston area, and a global third-party network that includes China-based contract manufacturers. Vertex maintains second sources for the vast majority of its commercial products and has a strategic agreement with Lonza for a 130,000 square foot dedicated facility supporting T1D cell therapy candidates.

Vertex was incorporated in Massachusetts in 1989 and is headquartered at 50 Northern Avenue, Boston. As of December 31, 2025 it had approximately 6,400 employees, about 5,200 of them in the U.S.

Risk factors

From the FY2025 Form 10-K, accession 0000875320-26-000056, condensed.

Revenue concentration in cystic fibrosis. Substantially all net product revenue derives from CF medicines. A manufacturing or supply disruption, a safety finding, loss of market acceptance, or adverse pricing or reimbursement affecting the CF portfolio would hit nearly the whole business at once, and the company may be unable to sustain or grow CF revenue against competitive entrants or if it cannot develop next-generation medicines for people who do not benefit from current CF therapies.

Dependence on new launches succeeding. A portion of the value investors assign to Vertex rests on JOURNAVX in acute pain and the broader acute and neuropathic pain programs; JOURNAVX faces lower-cost alternatives and competitive market access. Separately, there is no assurance CASGEVY revenues can be increased or maintained, it is a complex, high-cost one-time therapy dependent on authorized treatment centers and reimbursement. Failure to develop and commercialize additional medicines would materially harm the business.

Pricing, reimbursement and government cost containment. Third-party payors are increasingly strict. The Inflation Reduction Act's Part D redesign and Manufacturer Discount Program may have a material impact even though CF medicines and CASGEVY are currently excluded from the Medicare Drug Price Negotiation Program. State Prescription Drug Affordability Boards (Colorado, Maryland, Washington, Minnesota) may set upper payment limits. CMS has proposed the GUARD model, a mandatory most-favored-nation-style rebate mechanism for certain Part D drugs priced above economically comparable countries. Ex-U.S., reimbursement is a country-by-country negotiation, often at prices below U.S. net prices and often delaying commercialization. A proposed overhaul of E.U. pharmaceutical legislation could adversely affect regulatory data protection and approval procedures.

Clinical and regulatory risk. Outcomes of testing are highly uncertain; preclinical data have failed to predict clinical results (VX-264 in T1D is the company's own example), and interim data may not predict final results. Regulators may pause trials, require confirmatory trials, disagree with trial design or conclusions, refuse to approve manufacturing facilities, grant narrower labels, or withdraw accelerated approvals if confirmatory studies fail.

Safety findings on marketed products. Each CF product shares at least one active ingredient with another, so a label change on one can affect the others, in December 2024 the FDA required Vertex to move liver injury and liver failure information into a boxed warning on the TRIKAFTA label and required similar language for ALYFTREK. CASGEVY carries required post-marketing safety studies.

Valuation sensitivity to data releases. The 10-K warns that periodic releases of new clinical information can change investors' perceptions of its products and candidates and make the stock volatile, with the timing of those releases largely outside the company's control because it depends on regulator communications and trial readouts. Its own example is the release of Phase 2 data for VX-993 together with the disclosure that the FDA did not at that time see a path toward a broad peripheral neuropathic pain label for suzetrigine.

Intellectual property and litigation. Patents may not issue, may not be enforceable, and do not guarantee freedom to operate. Vertex and its CASGEVY manufacturing partners are in patent litigation against ToolGen in the U.S., the U.K. and the Netherlands, where ToolGen alleges the CASGEVY manufacturing process infringes its CRISPR/Cas9 patents; Vertex has argued invalidity in the U.K. and Netherlands and filed EPO oppositions. The core CRISPR/Cas9 platform rights CRISPR Therapeutics licenses are non-exclusive or co-exclusive and are subject to adversarial proceedings among the CVC Group, Broad, Sigma-Aldrich and ToolGen. Separately, Royalty Pharma plc, assignee of the CFF's royalty rights, initiated a confidential arbitration on October 10, 2025 alleging the ALYFTREK royalty burden is approximately 8% versus Vertex's position of 4%, seeking declaratory relief, alleged unpaid royalties, damages, costs and interest. An adverse outcome would raise future cost of goods.

Manufacturing, supply chain and third-party reliance. Supply interruptions can arise from raw material or labor shortages, regulatory inspections, construction and approval delays, customs and shipping delays, cGMP compliance failures, and general supply chain disruption. Vertex depends on China-based suppliers for portions of its supply chain, and finding alternatives may not be feasible or quick. Biologics and cell and genetic therapy processes are more complex than small molecules and cannot share a single process. The CASGEVY chain, mobilization, collection, purification, editing, freezing, transport, infusion, requires each step to succeed in sequence across multiple parties.

Geopolitics, trade and legislation. Risks include recession, inflation, political instability, war and terrorism, tariffs and trade barriers "the risks of which appear to have increased in the current political environment," and proposed U.S. legislation limiting use of select Chinese biotechnology service providers. The 10-K also notes a decline in Russian product revenue where Vertex says it is experiencing a violation of its intellectual property rights.

Strategic transactions. Vertex competes for deals with better-resourced acquirers, may not close transactions, and may not realize anticipated benefits, integration failures, added expense, impairment charges on acquired assets, and dilutive equity issuance or additional debt are all named.

Tax. The effective tax rate swings with jurisdictional profit mix, audits, uncertain tax position revaluations and law changes, including global minimum tax enactments. As of December 31, 2025 the liability for uncertain tax positions was $852.1 million and a $326.2 million valuation allowance was maintained, primarily against U.S. state tax attributes.

Financing and capital return. Credit agreements carry a consolidated leverage ratio covenant and negative covenants limiting additional indebtedness, liens, investments, acquisitions, dispositions and affiliate transactions; a covenant breach could accelerate the debt. There is no assurance shares will be repurchased or repurchased at favorable prices.

Other named risks. Cybersecurity breaches (including adversarial AI techniques and ransomware; Vertex reports immaterial incidents to date and no cybersecurity threat that has materially affected the business), evolving privacy and data security regulation (GDPR, CCPA/CPRA) heightened by cell and genetic therapies processing more personal data, product liability, healthcare fraud and abuse and transparency regulation, concentration of operations in a limited number of facilities, failure to scale operations, and competition for scientific and commercial talent.

Management's discussion and analysis, fiscal year 2025

From the FY2025 Form 10-K, accession 0000875320-26-000056.

Revenue. Total revenue rose 9% to $12,001.3 million in 2025 from $11,020.1 million in 2024 (2023: $9,869.2 million). Net product revenue increased $950.5 million, or 9%, to $11,970.6 million, driven by continued demand for TRIKAFTA/KAFTRIO plus first contributions from the ALYFTREK, JOURNAVX and CASGEVY launches. By product: TRIKAFTA/KAFTRIO $10,312.7 million (+1%); ALYFTREK $837.8 million (no prior-year base); other product revenue $820.1 million (+5%), which included $115.8 million from CASGEVY and $59.6 million from JOURNAVX, with the remainder from KALYDECO, ORKAMBI and SYMDEKO/SYMKEVI. Other revenue of $30.7 million consisted of $20.6 million and $10.0 million of upfront payments from Ono and Zai, respectively.

Geographically, U.S. revenue grew 13% to $7,548.6 million on patient demand, new initiations and higher realized net prices, while ex-U.S. revenue grew 3% to $4,452.7 million, held back by the decline in Russia. For 2026 management expected total revenue to increase on continued CF growth including ALYFTREK globally, plus greater CASGEVY and JOURNAVX contributions.

Costs and margins. Cost of sales rose 8% to $1,651.3 million; as a percentage of net product revenue it was 13.8% in 2025 versus 13.9% in 2024, helped by ALYFTREK's lower royalty burden and offset by product mix, network expansion and manufacturing process investment. Management expected that percentage to increase in 2026 as non-CF products, which carry higher manufacturing cost relative to revenue, take a larger share.

R&D expense rose 8% to $3,909.5 million, split between research expense of $827.9 million (+3%, or +$23.4 million) and development expense of $3,081.6 million (+9%, or +$255.8 million), the latter reflecting headcount and infrastructure for the povetacicept, pain and T1D programs; the 2024 base included $151.9 million of cash-settled unvested Alpine equity awards in development expense and $13.1 million in research salary and benefits. Over the past three years Vertex incurred approximately $10.7 billion in R&D expense. AIPR&D fell to $133.0 million from $4,628.4 million, the prior year having absorbed the $4.4 billion Alpine charge. SG&A rose 20% to $1,753.1 million on commercial investment behind the JOURNAVX launch, with further increases expected in 2026 for JOURNAVX, the anticipated povetacicept launch and infrastructure scaling. A $379.0 million full intangible asset impairment charge was recorded in Q1 2025 on the VX-264 in-process R&D asset acquired from Semma after the Phase 1/2 trial missed its efficacy endpoint.

Below the line and taxes. Interest income fell to $490.9 million from $598.1 million on lower market rates; other expense, net was $7.7 million versus $86.1 million, mainly from strategic equity investment marks and foreign exchange. The provision for income taxes was $690.0 million on a 14.9% effective rate, below the U.S. statutory rate because of R&D tax credits, greater foreign tax credit utilization and excess stock compensation benefits; 2024's 315.5% rate reflected the non-deductible $4.4 billion Alpine AIPR&D charge. H.R.1, enacted in July 2025, restored immediate deduction of R&D expenditures but had no material effect on 2025 U.S. taxes.

Bottom line. Income from operations was $4,173.3 million (2024: a $232.9 million loss). Net income was $3,953.2 million, or $15.32 per diluted share, against a net loss of $535.6 million, or $(2.08) per share, in 2024 (2023: net income $3,619.6 million, $13.89 diluted).

Liquidity. Total cash, cash equivalents and marketable securities rose 10% to $12,320.4 million at December 31, 2025. Working capital increased 22% to $7.3 billion. Operating activities provided $3,631.4 million (2024: used $492.6 million, reflecting the Alpine payment); investing used $945.4 million; financing used $2,261.3 million, principally share repurchases and tax withholding on equity awards. In May 2025 the Board authorized a $4.0 billion share repurchase program, of which $618.5 million had been repurchased as of December 31, 2025. Total undiscounted minimum lease payments were $3.2 billion on operating leases and $178.1 million on finance leases; the Boston headquarters lease at Fan Pier runs through June 2044, and a second Leiden Campus building was expected to be operational in late 2026.

Current quarter, second quarter and first half of 2026

From the Form 10-Q for the quarter ended June 30, 2026, accession 0000875320-26-000259, and the earnings release furnished as Exhibit 99.1 to the Form 8-K dated August 3, 2026, accession 0000875320-26-000256.

Results. Total revenue rose 12% to $3,333.9 million in the second quarter and 10% to $6,320.8 million for the first half. The composition is shifting: TRIKAFTA/KAFTRIO fell 2% to $2,497.2 million in the quarter (down 5% to $4,851.9 million for the half) while ALYFTREK rose 266% to $573.6 million (up 374% to $998.0 million), and other CF products declined 29% to $137.1 million, net CF product revenue still grew 11% to $3,207.9 million. Outside CF, CASGEVY reached $76.4 million (up 151% year over year and 78% sequentially) and JOURNAVX reached $49.6 million (up 313% year over year and 71% sequentially). There was no other revenue in 2026, against $20.7 million in the prior-year quarter. U.S. revenue grew 11% to $2,056.4 million; ex-U.S. revenue grew 14% to $1,277.5 million, aided by foreign exchange.

Cost of sales rose 20% to $489.2 million, lifting cost of sales to 14.7% of net product revenue (14.0% for the half) from 13.8% (13.5%) a year earlier, on product mix partly offset by a lower blended CF royalty rate. R&D expense was roughly flat at $993.8 million (+2%), with research expense down 1% and development expense up 2%; AIPR&D was $21.4 million. SG&A rose 37% to $582.2 million (+31% to $1,075.9 million for the half) on headcount and commercial investment behind JOURNAVX and the anticipated povetacicept launch in IgAN. Total costs and expenses rose 15% to $2,087.0 million.

Income from operations was $1,246.9 million; net interest income was $120.6 million, similar to the prior year. The effective tax rate was 21.0% for the quarter and 19.4% for the half (prior-year half: 16.6%). Net income was $1,099.8 million, or $4.31 per diluted share, versus $1,032.9 million and $3.99 a year earlier; first-half net income was $2,131.2 million, or $8.33 diluted, against $1,679.2 million and $6.48, the prior-year half having carried the $379.0 million VX-264 impairment.

On a non-GAAP basis the company reported second-quarter operating income of $1,423.3 million, net income of $1,207.3 million and diluted EPS of $4.73, versus $1,325.1 million, $1,169.4 million and $4.52 a year earlier; combined non-GAAP R&D, AIPR&D and SG&A expense was $1,430.3 million against $1,239.7 million.

Balance sheet and cash. Cash, cash equivalents and marketable securities rose 11% to $13,641.5 million at June 30, 2026 from $12,320.4 million at December 31, 2025. Working capital rose 17% to $8.6 billion. Operating activities provided $2,553.5 million in the first half (prior year: $1,892.0 million) on higher product revenue, income tax payment timing and reduced inventory purchases; investing used $477.7 million and financing used $965.5 million, mainly buybacks and equity award tax withholding. $2.6 billion remained available under the May 2025 repurchase authorization at quarter end. Total assets were $27,423.3 million and shareholders' equity $20,247.9 million, with 253.3 million common shares outstanding.

Guidance. Vertex raised full-year 2026 total revenue guidance to $13.1–$13.2 billion from $12.95–$13.1 billion. The guidance assumes continued CF growth including ALYFTREK and TRIKAFTA uptake and $500 million or more of non-CF product revenue from CASGEVY and JOURNAVX, and continues to embed an approximately 150 basis point year-over-year tailwind from foreign exchange net of hedging. Combined GAAP R&D, AIPR&D and SG&A expense guidance of $6.3–$6.45 billion and the non-GAAP equivalent of $5.65–$5.75 billion were reiterated, as was a 19.5%–20.5% non-GAAP effective tax rate; the difference between the GAAP and non-GAAP expense ranges is primarily $650–$700 million of stock-based compensation, and the ranges include roughly $100 million of AIPR&D. Tariffs are assumed to have an immaterial 2026 cost impact at currently known rates. The guidance excludes any effect of the pending Crinetics acquisition, with an update promised after close.

Commercial and pipeline developments in the quarter. ALYFTREK secured reimbursement in four additional countries including Spain, bringing the total to 25, and Vertex signed a letter of intent with the Pan-Canadian Pharmaceutical Alliance covering eligible patients aged six and older; new Phase 3 data in children aged 2 to 5 showed 65% of children reaching carrier sweat chloride levels below 30 mmol/L, and global submissions for that age group were initiated. The FDA approved CASGEVY in children aged two and older with SCD or TDT, the first genetic therapy indicated that young for both diseases, cleared 53 days after filing, making approximately 5,500 additional patients potentially eligible; submissions for ages 5 to 11 were completed in Saudi Arabia and the U.K., and German reimbursement for patients 12 and older was secured in May. For JOURNAVX, approximately 535,000 prescriptions were filled in the quarter (about 900,000 in the half), two more major pharmacy benefit managers agreed Medicare Part D coverage so that three of the four largest Part D PBMs now provide reimbursed access, 23 states cover it via Medicaid, roughly 260 million U.S. individuals have reimbursed access, and Health Canada accepted the suzetrigine new drug submission.

In the pipeline, the FDA accepted the povetacicept BLA for accelerated approval in adult IgAN with a PDUFA target action date of November 30, 2026, if approved it becomes the first commercialized therapy in Vertex's nephrology pillar, supported by a pre-specified Week 36 interim analysis of the Phase 3 RAINIER trial; a Saudi submission was completed and granted Breakthrough Designation. The Phase 2B portion of the OLYMPUS pivotal study in pMN was completed with an 80 mg subcutaneous every-four-weeks dose confirmed for the Phase 3 portion now underway, and enrollment in the Phase 2 gMG study is targeted for completion by year-end 2026. AMPLITUDE is on track for full enrollment in the second half of 2026 with interim data expected in early 2027, and data from the AMPLIFIED Phase 2 study of inaxaplin are expected in the fall. The FDA cleared the IND for VX-017, a stem cell-derived islet cell therapy intended for all eligible T1D patients regardless of blood type, with a Phase 1/2 trial planned; updated timelines for zimislecel and VX-017 are expected later in 2026. Dosing was completed in the VX-828 proof-of-concept study of the first next-generation 3.0 CFTR corrector, with results due in the second half of 2026, and first-in-human studies of VX-581 and VX-272 are enrolling. Enrollment was completed in the multiple ascending dose portion of GALILEO (VX-670 in DM1), with results expected in the second half of 2026, and enrollment was completed in AGLOW, the 26-patient, single-arm, 52-week Phase 2 study of VX-407 in ADPKD.

New risk disclosed this quarter. The 10-Q supplements the 10-K risk factors with the Crinetics transaction: it may not be completed because of closing conditions, antitrust or other regulatory approvals; realizing its value depends on successful integration, employee retention and synergies; ongoing business may be disrupted and management attention diverted; and the anticipated benefits depend on PALSONIFY revenue and the commercial potential of atumelnant, either of which may disappoint.

Subsequent events

From Note O to the condensed consolidated financial statements in the Form 10-Q for the quarter ended June 30, 2026 (accession 0000875320-26-000259), the Form 8-K dated July 7, 2026 (accession 0001193125-26-296710), and the Form 8-K dated September 1, 2026 (accession 0000875320-26-000264).

Agreement to acquire Crinetics Pharmaceuticals, Inc. On July 6, 2026, Vertex, its wholly owned subsidiary Clark Merger Sub, Inc. and Crinetics Pharmaceuticals, Inc. entered into an Agreement and Plan of Merger under which Merger Sub will merge into Crinetics, which survives as a wholly owned Vertex subsidiary. Each outstanding Crinetics share converts into the right to receive $85.00 per share in cash, valuing Crinetics at a total equity value of approximately $10.0 billion, or approximately $8.8 billion net of estimated cash acquired. Unvested Crinetics options and restricted stock units vest immediately before the effective time and are cashed out at the merger consideration (options net of exercise price; options struck at or above $85.00 are cancelled for no consideration). Closing is conditioned on adoption by holders of a majority of outstanding Crinetics shares, expiration or termination of the Hart-Scott-Rodino waiting period and any required foreign clearances, absence of a legal restraint, accuracy of representations, performance of covenants and no continuing Company Material Adverse Effect; it is not conditioned on financing. The parties expect to close in the third quarter of 2026, and either party may terminate if the effective time has not occurred by January 6, 2027, subject to automatic three-month extension in specified circumstances. Crinetics may owe Vertex a termination fee of $350,474,425 in specified circumstances, including termination to accept a Superior Company Proposal. Crinetics brings PALSONIFY (paltusotine), an FDA- and EMA-approved once-daily oral somatostatin receptor type 2 agonist for adults with acromegaly launched in the U.S. in October 2025, and atumelnant, a once-daily oral ACTH receptor antagonist in Phase 3 for adults with congenital adrenal hyperplasia, Phase 2/3 in pediatrics and Phase 2 in ACTH-dependent Cushing's syndrome. Vertex describes the two late-stage assets as carrying a combined peak revenue opportunity of more than $5 billion annually and expects the transaction to become accretive to non-GAAP operating income in 2029, adding endocrinology as a fifth commercial pillar alongside cystic fibrosis, haematology, pain and renal.

Financing. Concurrently with signing, on July 6, 2026 Vertex entered a debt commitment letter with Bank of America, N.A., BofA Securities, Inc. and Morgan Stanley Senior Funding, Inc. for an unsecured 364-day bridge loan facility of $4.5 billion. That commitment was terminated on July 30, 2026 when Vertex entered a term loan credit agreement (the "2026 Term Loan") with Bank of America, N.A. as administrative agent providing a $4.5 billion senior unsecured delayed draw term loan A facility to fund a portion of the acquisition. Borrowings become payable as a $1.0 billion tranche 364 days after the funding date, a $1.0 billion tranche two years after, and a $2.5 billion tranche three years after; loans bear interest at a base rate or SOFR plus a margin tied to the consolidated leverage ratio or credit rating, may be prepaid without premium or penalty, carry no mandatory amortization, are guaranteed by certain domestic subsidiaries, and carry a financial covenant requiring a consolidated leverage ratio of no more than 3.50 to 1.00, which Vertex may elect to raise to 4.00 to 1.00 for the four fiscal quarters following a material acquisition. Vertex had not drawn on the 2026 Term Loan as of the filing.

Also in July 2026, Vertex and certain subsidiaries entered a $500.0 million senior unsecured revolving facility (the "2026 Revolver") maturing July 30, 2031, with an uncommitted option to request an additional $500.0 million of capacity, a $100.0 million sublimit for letters of credit and up to $100.0 million available in certain non-U.S. currencies. It carries the same 3.50-to-1.00 leverage covenant and subsidiary guarantees, and was undrawn as of the filing. In conjunction with entering it, Vertex terminated the $500.0 million revolving credit agreement it had entered into in 2022.

Chief Financial Officer succession. On August 27, 2026, Vertex appointed Jonathan Poole, 51, Senior Vice President, Finance at the company since March 2020, as Executive Vice President and Chief Financial Officer effective January 1, 2027. Charles F. Wagner, Jr., Executive Vice President and Chief Operating & Financial Officer, ceases serving as Chief Financial Officer on that date and remains Executive Vice President and Chief Operating Officer. Mr. Poole's employment agreement provides a base salary of $750,000 and a target annual bonus of 90% of base salary as of the effective date, with severance equal to 100% of base salary plus target bonus on a termination without cause or resignation for good reason, and a change of control agreement providing equivalent cash severance plus a pro-rated target bonus, payment of other earned cash incentive awards and full vesting of outstanding equity awards on a qualifying termination within 90 days before or 12 months after a change of control.

Filings that contain financial statements

The following Forms 8-K furnish an Exhibit 99.1 press release with a full consolidated income statement, condensed balance sheet, and GAAP-to-non-GAAP reconciliation. Anyone tracing quarterly or annual figures for Vertex should use these as the primary source:

• Q2 2026 (three and six months ended June 30, 2026), Form 8-K filed August 3, 2026, accession 0000875320-26-000256, Exhibit 99.1.
• Q1 2026 (three months ended March 31, 2026), Form 8-K filed May 4, 2026, accession 0000875320-26-000171, Exhibit 99.1.
• Q4 and full year 2025 (three and twelve months ended December 31, 2025), Form 8-K filed February 12, 2026, accession 0000875320-26-000034, Exhibit 99.1.
• Q3 2025 (three and nine months ended September 30, 2025), Form 8-K filed November 3, 2025, accession 0000875320-25-000230, Exhibit 99.1.
• Q2 2025 (three and six months ended June 30, 2025), Form 8-K filed August 4, 2025, accession 0000875320-25-000213, Exhibit 99.1.
• Q1 2025 (three months ended March 31, 2025), Form 8-K filed May 5, 2025, accession 0000875320-25-000171, Exhibit 99.1.
• Q4 and full year 2024 (three and twelve months ended December 31, 2024), Form 8-K filed February 10, 2025, accession 0000875320-25-000029, Exhibit 99.1.

Pending acquisition of Crinetics Pharmaceuticals

On July 6, 2026, Vertex, its merger subsidiary Clark Merger Sub, Inc., and Crinetics Pharmaceuticals, Inc. entered into an Agreement and Plan of Merger under which Vertex will acquire all outstanding shares of Crinetics for $85.00 per share in cash, approximately $10.0 billion in equity value, or approximately $8.8 billion net of Crinetics' cash. The deal was unanimously approved by both companies' boards. Vertex intends to fund the acquisition with cash on hand and a fully committed $4.5 billion unsecured bridge financing facility from Bank of America, BofA Securities and Morgan Stanley Senior Funding, with permanent financing expected to replace the bridge. The agreement provides for a $350,474,425 termination fee payable by Crinetics under specified circumstances, and either party may terminate if the deal has not closed by January 6, 2027 (subject to a possible three-month extension). (Form 8-K filed July 7, 2026, accession 0001193125-26-296710.)

That bridge commitment has since been superseded. Per the Form 10-Q for the quarter ended June 30, 2026 (accession 0000875320-26-000259, Note O, "Subsequent Events"): Vertex entered the $4.5 billion unsecured 364-day bridge loan commitment with Bank of America, N.A., BofA Securities, Inc. and Morgan Stanley Senior Funding, Inc. on July 6, 2026, concurrently with signing the merger agreement; that commitment was terminated on July 30, 2026 upon Vertex's entry into a term loan credit agreement (the "2026 Term Loan") with Bank of America, N.A. as administrative agent, providing a $4.5 billion senior unsecured delayed draw term loan A facility, which was undrawn as of the 10-Q filing. Vertex now intends to fund the acquisition using cash, cash equivalents and proceeds from the 2026 Term Loan. The merger remains not conditioned on financing.

As of Vertex's second-quarter 2026 results, announced August 3, 2026, the transaction remained pending, with closing still anticipated in the third quarter of 2026 subject to Crinetics shareholder approval, HSR clearance, and other customary conditions. Vertex's 2026 financial guidance does not reflect the transaction and is to be updated once it closes. No subsequent Vertex filing in this review has reported the acquisition as completed. (Form 8-K filed August 3, 2026, accession 0000875320-26-000256, Exhibit 99.1.)

Crinetics' portfolio centers on PALSONIFY (an oral therapy for acromegaly, FDA- and EMA-approved, U.S. launch October 2025) and atumelnant, an oral ACTH receptor antagonist in Phase 3 development for congenital adrenal hyperplasia. Vertex has said the acquisition is expected to add more than $5 billion in combined peak annual revenue potential and to become accretive to non-GAAP operating income in 2029.

Financing (2026 Term Loan and 2026 Revolver)

Per the Form 10-Q for the quarter ended June 30, 2026 (accession 0000875320-26-000259): the $4.5 billion 2026 Term Loan repays in three tranches, $1.0 billion 364 days after the funding date, a further $1.0 billion two years after the funding date, and the remaining $2.5 billion three years after the funding date, and bears interest, at Vertex's option, at a base rate or a SOFR-based rate plus an applicable margin that varies with Vertex's consolidated leverage ratio or, where available, its credit rating. The 2026 Term Loan carries a financial covenant capping the consolidated leverage ratio at 3.50 to 1.00, which Vertex may elect to raise to 4.00 to 1.00 for each of the four fiscal quarters following a material acquisition. Separately, in July 2026 Vertex entered a $500.0 million senior unsecured revolving facility (the "2026 Revolver") maturing July 30, 2031, undrawn as of the filing, and in conjunction with entering the 2026 Revolver terminated the $500.0 million revolving credit agreement it had entered into in 2022.

Quarterly and annual results

Second quarter 2026 (reported August 3, 2026): total revenue of $3.33 billion, up 12% year over year, driven by continued cystic fibrosis (CF) performance and growth in CASGEVY and JOURNAVX. GAAP net income was $1.1 billion and non-GAAP net income was $1.2 billion. Vertex raised full-year 2026 revenue guidance to $13.1 billion–$13.2 billion, from $12.95 billion–$13.1 billion previously; guidance excludes the pending Crinetics acquisition. (Accession 0000875320-26-000256.)

First quarter 2026 (reported May 4, 2026): total revenue of $2.99 billion, up 8% year over year. GAAP net income was $1.0 billion versus $646 million a year earlier (the prior-year period included a $379.0 million intangible asset impairment charge). Full-year 2026 guidance was reiterated at $12.95 billion–$13.1 billion in revenue. (Accession 0000875320-26-000171.)

Fourth quarter and full year 2025 (reported February 12, 2026): full-year total revenue of $12.0 billion, up 9% versus 2024; fourth-quarter revenue of $3.19 billion, up 10% year over year. Full-year GAAP net income was $4.0 billion and non-GAAP net income was $4.7 billion, compared with a GAAP net loss of $536 million in 2024 (which had included $4.4 billion of acquired IPR&D expense tied to the 2024 Alpine Immune Sciences acquisition). Vertex issued initial full-year 2026 guidance of $12.95 billion–$13.1 billion in revenue. (Accession 0000875320-26-000034.)

Third quarter 2025 (reported November 3, 2025): consolidated results for the three and nine months ended September 30, 2025. (Accession 0000875320-25-000230.)

Second quarter 2025 (reported August 4, 2025): consolidated results for the three and six months ended June 30, 2025; the same filing announced the retirement of David Altshuler, Executive Vice President and Chief Scientific Officer, effective August 1, 2026. (Accession 0000875320-25-000213.)

First quarter 2025 (reported May 5, 2025): consolidated results for the three months ended March 31, 2025. (Accession 0000875320-25-000171.)

Capital return

On May 19, 2025, Vertex's board authorized a new $4.0 billion stock repurchase program (the "2025 Repurchase Program"), which has no expiration date. Combined with roughly $775 million remaining under the company's 2023 repurchase authorization, total repurchase capacity stood at approximately $4.775 billion. (Form 8-K filed May 19, 2025, accession 0000875320-25-000199.)

Management and board changes

• August 27, 2026, Vertex appointed Jonathan Poole as Executive Vice President and Chief Financial Officer, effective January 1, 2027. Charles F. Wagner, Jr., currently Executive Vice President and Chief Operating & Financial Officer, will cease serving as CFO on that date but will remain Executive Vice President and Chief Operating Officer. (Form 8-K filed September 1, 2026, accession 0000875320-26-000264.)
• April 28, 2026, Director Suketu Upadhyay notified the board he would not stand for re-election at the 2026 annual meeting, citing his new role as incoming Chief Financial Officer of Incyte Corporation; the board intends to reduce its size to ten members following his departure. The company said the decision did not involve any disagreement with Vertex. (Form 8-K filed April 29, 2026, accession 0000875320-26-000166.)
• February 10, 2025, Vertex announced the retirement of Stuart A. Arbuckle, Executive Vice President and Chief Operating Officer, effective July 1, 2025, and the appointment of Charles F. Wagner, Jr. (continuing as CFO) as Chief Operating Officer and Duncan J. McKechnie as Chief Commercial Officer, both effective July 1, 2025. (Form 8-K filed February 10, 2025, accession 0000875320-25-000029.)
• August 4, 2025, David Altshuler, Executive Vice President and Chief Scientific Officer, announced his retirement effective August 1, 2026. (Accession 0000875320-25-000213.)

Annual meetings

• May 13, 2026, Shareholders re-elected all ten director nominees, ratified Ernst & Young LLP as auditor for 2026, approved (advisory) 2025 executive compensation, approved the 2026 Stock and Option Plan, and approved a shareholder proposal on the right to act by written consent. (Form 8-K filed May 13, 2026, accession 0000875320-26-000204.)
• May 14, 2025, Shareholders elected all eleven director nominees (including Suketu Upadhyay, who later departed the board), ratified Ernst & Young LLP as auditor for 2025, approved (advisory) 2024 executive compensation, and rejected a shareholder proposal on excessive golden parachutes. (Form 8-K filed May 14, 2025, accession 0000875320-25-000194.)

Regulatory and pipeline items with financial impact

• March 31, 2026, Vertex completed the rolling Biologics License Application submission to the FDA for potential accelerated approval of povetacicept in adults with IgA nephropathy, using a priority review voucher expected to shorten FDA review to six months from the standard ten. (Form 8-K filed March 31, 2026, accession 0000875320-26-000147.)
• March 28, 2025, Following Phase 1/2 results, Vertex discontinued further clinical development of VX-264 (a type 1 diabetes program) and began an impairment evaluation of the related intangible assets, expecting to record a non-cash impairment charge of approximately $400 million to GAAP operating expenses for the first quarter and full year 2025; this figure was later reported as $379.0 million in subsequent quarterly and annual results. (Form 8-K filed March 28, 2025, accession 0000875320-25-000156.)

About this file

VRTX annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

VRTX quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

VRTX year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

VRTX trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

• Derivation. fiscal year 2025 plus the six months ended June 30, 2026 less the six months ended June 30, 2025

Adjustments

Notes

• Every figure here is stated in actual U.S. dollars. Both filings print their statements in millions (share counts on the balance sheet are printed in full), and the scale stated at the head of each table has been applied; the note read for each statement is listed under "units_notes_seen".
• Vertex is a single-segment commercial-stage biopharmaceutical company, so the record uses a standard product-revenue template: total revenues, cost of sales, research and development, acquired in-process research and development, selling, general and administrative expenses, operating income, net income and per-share amounts; cash and marketable securities, total assets and shareholders' equity; operating cash flow, capital expenditures and free cash flow. Revenue is additionally split by product and by geography, which is how the company itself describes the business in its segment note.
• Sources. The three fiscal years come from the consolidated statements in the FY2025 Form 10-K (accession 0000875320-26-000056), filed February 13, 2026. The second quarter of 2026, the second quarter of 2025 and the six-month columns come from the condensed consolidated statements in the Form 10-Q for the quarter ended June 30, 2026 (accession 0000875320-26-000259), filed August 4, 2026.
• Periods the two filings present, and therefore everything this record holds: fiscal years 2025, 2024 and 2023 on the income statement and the cash flow statement; December 31, 2025 and December 31, 2024 on the balance sheet; the three months ended June 30, 2026 and June 30, 2025; the six months ended June 30, 2026 and June 30, 2025; and the balance sheet at June 30, 2026. Fiscal 2023 therefore carries no balance sheet, because the 10-K's balance sheet presents only two year-ends.
• The quarterly entries carry no cash flow block. The 10-Q presents its cash flow statement for the six months ended June 30, 2026 and 2025 only, and the company's second-quarter earnings release contains no cash flow statement, so no discrete three-month operating cash flow or free cash flow figure was published for either quarter. Six-month cash flows are in "year_to_date" and "prior_year_to_date".
• The second quarter of 2025 carries no balance sheet: the 10-Q's balance sheet columns are June 30, 2026 and December 31, 2025, and a June 30, 2025 balance sheet is not presented in either filing.
• Cash flow line items are stated as the filings print them, so cash outflows carry a negative sign. "capital_expenditures" is the "Purchases of property and equipment" line. "free_cash_flow" is operating cash flow less capital expenditures and is not a figure the company itself reports.
• "gross_profit" is total revenues less cost of sales. Vertex does not print a gross profit subtotal on the face of its income statement, and cost of sales is struck against total revenues.
• "interest_income_net" for the fiscal years is interest income less interest expense as the 10-K prints those two lines separately ($490.9 million less $13.3 million in 2025, $598.1 million less $30.6 million in 2024, and $614.7 million less $44.1 million in 2023). The 10-Q prints a single "Interest income, net" line, which is used directly for the quarters and six-month periods.
• "total_debt" is zero in every period: neither balance sheet carries any borrowings. In July 2026, after the June 30, 2026 balance-sheet date, Vertex terminated the $500.0 million revolving credit agreement it had entered into in 2022 and entered into a new $500.0 million senior unsecured revolving facility that matures on July 30, 2031. On July 30, 2026 it also entered into a term loan credit agreement providing for a $4.5 billion senior unsecured delayed-draw term loan A facility, amounts under which would be used to finance a portion of the pending acquisition of Crinetics Pharmaceuticals, Inc. The Q2 2026 10-Q (accession 0000875320-26-000259) states that Vertex had not drawn upon either the new revolving facility or the term loan facility as of that filing, so "total_debt" remains zero.
• "cash_and_marketable_securities" is the sum of cash and cash equivalents, short-term marketable securities and long-term marketable securities: $13,641.5 million at June 30, 2026, $12,320.4 million at December 31, 2025 and $11,223.8 million at December 31, 2024.
• The trailing-twelve-month block is derived, not filed: fiscal year 2025 plus the six months ended June 30, 2026 less the six months ended June 30, 2025. It carries no weighted-average share count or per-share amount, because a weighted average over that window is not a figure either filing publishes and summing four quarters of per-share data would not produce one.
• The fiscal 2024 net loss of $535.6 million follows from $4,628.4 million of acquired in-process research and development expense recorded that year, against $133.0 million in 2025 and $527.1 million in 2023. Operating cash flow was also negative in 2024, at an outflow of $492.6 million.
• The product split is reported at different levels of detail in the two filings, so the captions differ by period. The 10-K's annual table shows TRIKAFTA/KAFTRIO, ALYFTREK and a single "Other product revenues" line; the 10-Q's quarterly and six-month table separates other cystic fibrosis products from CASGEVY and JOURNAVX. The geographic split uses the same captions in both. Because the two product tables are not on the same basis, the trailing-twelve-month block carries the geographic split only.
• No stock split, foreign-currency translation or depositary-share adjustment applies. The company has had no stock split in the period covered, reports in U.S. dollars, and its shares are listed directly rather than as depositary receipts.

Uncertainties

• There is no discrete three-month cash flow figure for the second quarter of 2026 or the second quarter of 2025 anywhere in these filings, so none is reported. Anyone needing a quarterly operating cash flow would have to difference the six-month column against a first-quarter figure, which these two filings do not contain.
• The trailing-twelve-month figures are arithmetic from three published columns rather than a period any filing reports. They are exact on that construction, but they are not an audited or filed period.
• Fiscal 2023 has no balance sheet in this record, and the second quarter of 2025 has neither a balance sheet nor a cash flow statement. These are gaps in what the two filings present, not omissions in the reading.
• Free cash flow is a derived measure, not one Vertex reports. It is stated here as operating cash flow less purchases of property and equipment, with no other deduction.

Prior year to date

Taken from the SEC filings and normalized to actual dollars.

Company details

Fiscal period

Source filings