Vertex Pharmaceuticals (VRTX) 10-K risk factor changes: FY2024 vs FY2023

- [removed: We invest significant resources in the research, development, manufacturing and supply of therapies for serious diseases, and if] [added: If] we are unable to successfully develop and commercialize additional products, our business could be materially harmed.

[added: -] If we are unable to [removed: continue to increase] [added: sustain and grow] revenues from sales of our CF medicines, our business would be materially harmed and the market price of our common stock would likely decline.

- If we are unable to successfully develop, obtain [removed: approval,] [added: approval] and commercialize treatments for acute and neuropathic pain, our business could be materially harmed.

- If we discover safety issues with any of our products or if we fail to comply with continuing U.S. and applicable foreign regulations, commercialization efforts for the product could be negatively affected, the approved product could lose its [removed: approval or sales could be suspended,] [added: approval,] and our business could be materially harmed.

- If physicians and patients do not accept our products, or if patients do not remain on treatment or comply with their prescribed dosing regimen, our product revenues would [removed: be materially harmed] [added: decline] in future periods.

- If we are unable to obtain or are delayed in obtaining regulatory approval, we may incur additional costs, experience [removed: delays in commercialization,] [added: delays,] or be unable to commercialize our product candidates.

- If regulatory authorities interpret any of our conduct, including our marketing practices, as being in violation of applicable health care laws, including fraud and abuse laws, laws prohibiting [removed: off-label] [added: false and misleading] promotion, disclosure laws or other similar laws, we may be subject to civil or criminal penalties.

- If our patents do not protect our products and our products infringe third-party patents, we could be subject to litigation which could result in injunctions preventing us from selling [removed: out] [added: our] products, substantial damages, or circumvention of our patents by third parties.

[removed: We invest significant resources in the research, development, manufacturing and supply of therapies for serious diseases, and if] [added: If] we are unable to successfully develop and commercialize additional products, our business could be materially harmed.

We invest significant resources in the research and development of therapies for serious [removed: diseases,] [added: diseases and conditions,] including CF, SCD, TDT, acute and [added: peripheral] neuropathic pain, [added: IgAN,] AMKD, T1D, DM1, and [removed: AATD.][added: ADPKD.]

Product candidates that may appear promising in [removed: the early phases of] research and development may fail to reach commercial success for many reasons, [removed: including the failure to demonstrate acceptable clinical trial results or obtain marketing approval, the inability to manufacture or commercialize the product candidate on economically feasible terms, or the appearance of safety issues.][added: including:]

[removed: When we receive marketing approval for a pipeline product, we cannot be sure that we will] [added: - the failure to] obtain market acceptance or adequate reimbursement levels from third-party payors or foreign governments for such product.

[removed: If] [added: If] we are unable to [removed: continue to increase] [added: sustain and grow] revenues from sales of our CF medicines, our business would be materially harmed and the market price of our common stock would likely decline.

We seek to continue to increase our CF product revenue through serial innovation, including [removed: the potential approval of our vanzacaftor/tezacaftor/deutivacaftor triple combination,] development and commercialization [added: of next-generation] CF [added: medicines, extending access of CF] medicines [removed: in] [added: to] younger children with [added: CF, seeking additional approvals for our] CF [added: medicines in ex-U.S. markets] and [removed: through] securing [removed: additional approvals] and [added: maintaining adequate] reimbursements for our CF medicines [removed: in ex-U.S. markets.][added: globally, and by developing a nebulized mRNA therapy for the more than 5,000 people with CF who do not make CFTR protein and cannot benefit from CFTR modulators.]

- that one or more competing therapies may be developed successfully [added: by others] as a treatment for people with CF;

- that reimbursement policies of payors and other third parties may make it difficult to obtain reimbursement or [added: may] reduce the net price we receive for our products;

We [added: have] invested significant resources in the [removed: research and] development [added: and commercialization] of CASGEVY.

- the manufacturing process for CASGEVY is more complex than the manufacturing processes for our [removed: CF] [added: small molecule] medicines and we may encounter difficulties in the production of CASGEVY and ensuring that the product meets required [added: specifications;]

- the commercial success of CASGEVY [removed: will] [added: continues to] depend in part on the medical community, patients, governments, and third-party or governmental payors accepting [removed: and providing adequate reimbursement of CASGEVY products, and recognizing the applicable medicine] [added: it] as [added: a] medically useful, cost-effective, ethical, and [removed: safe;] [added: safe,] and [added: providing adequate reimbursement; and]

- [added: global] market acceptance [removed: will] [added: continues to] be dependent in part on the prevalence and severity of side effects associated with the procedure by which CASGEVY is administered, [added: including] the prevalence and severity of any side effects resulting from the myeloablative preconditioning regime.

If we are not successful in commercializing CASGEVY, our [removed: revenue growth could be limited and our] business could be materially harmed.

We believe that a portion of the value attributed to our company by investors is based on our [added: approved and] potential treatments for acute and [added: peripheral] neuropathic [removed: pain, including VX-548.][added: pain.]

[removed: VX-548, if approved, may not] [added: - the failure to] gain [removed: or] [added: and] maintain market acceptance among physicians and patients or other members of the medical [removed: community.][added: community; and]

In addition to the risks normally associated with launching a new branded product, [removed: VX-548] [added: JOURNAVX] will need to [removed: compete] [added: compete, and obtain reimbursement from third-party payors,] in an acute pain market that largely consists of low-cost generic drugs, including opioids, non-steroidal anti-inflammatory drugs, acetaminophen and local anesthetics.

Similarly, if we are successful in developing and obtaining approval for [removed: VX-548] [added: suzetrigine] in [added: peripheral] neuropathic pain, [removed: VX-548] [added: this product] will face competition from generic anticonvulsant and antidepressant drugs.

If we are not able to successfully [removed: develop, obtain approval for] [added: develop] and commercialize treatments for acute and [added: peripheral] neuropathic pain, our future net product revenues and cash flows will be adversely affected and our business could be materially harmed.

In addition, our business faces competition from major pharmaceutical [added: and biotechnology] companies possessing substantially greater financial resources than we possess, as well as from numerous smaller public and private companies, academic institutions, government agencies, public and private research organizations, and charitable venture philanthropy organizations that conduct research, seek patent protection, and/or establish collaborative arrangements for research, development, manufacturing, and commercialization.

Our products and any products that we develop in the future may not be able to compete effectively with marketed [added: therapies or new therapies that may be developed by competitors.]

If we discover safety issues with any of our products or if we fail to comply with continuing U.S. and applicable foreign regulations, commercialization efforts for the product could be negatively affected, the approved product could lose its [removed: approval or sales could be suspended,] [added: approval,] and our business could be materially harmed.

The subsequent discovery [added: or appearance] of previously unknown or underestimated problems with a product could negatively affect commercial sales of the product, result in restrictions on the product or lead to the withdrawal of the product from the market.

As a result, if any of our CF products were to experience safety [removed: issues,] [added: issues or labeling modifications,] our other CF products may be adversely affected.

Negative or ambiguous results from these studies could [removed: also] have a significant impact on our ability to commercialize [removed: CASGEVY.][added: our products.]

Our business also may be materially harmed by [added: reduced coverage or reimbursement by payors,] impaired sales of our products, denial or withdrawal of regulatory approvals, non-renewal of conditional regulatory approvals, required label changes or additional clinical trials, reputational harm, or government investigations or lawsuits brought against us.

If physicians and patients do not accept our products, or if patients do not remain on treatment or comply with their prescribed dosing regimen, our product revenues would [removed: be materially harmed] [added: decline] in future periods.

Physicians may elect not to prescribe [removed: our products] or recommend our [removed: cell or genetic] therapies, and patients may elect not to take them or receive them or they may discontinue use of our products after initiation of treatment, for a variety of reasons including:

[removed: We face] [added: There is some degree of] uncertainty as to whether cell and gene therapy treatments will [added: continue to] gain the acceptance of the public or the medical community.

In addition, medical centers, including [removed: ATCs,] [added: authorized treatment centers,] that administer procedures accompanying treatment could experience capacity constraints, and these centers are subject to competing priorities that could delay patient access to procedures associated with cell and gene therapy products.

For example, the [removed: ACA] [added: Affordable Care Act (“ACA”)] required manufacturers of Medicare Part D brand name drugs to provide discounts on those drugs to Medicare Part D beneficiaries during the coverage gap; increased the rebates paid by pharmaceutical companies to state Medicaid programs on drugs covered by Medicaid; and imposed an annual fee, which increases annually, on sales by branded pharmaceutical manufacturers.

[removed: Additionally, on] [added: On] August 16, 2022, the IRA was enacted.

We cannot predict with certainty whether there will be future legislative changes to the scope of these [removed: exclusions.][added: exclusions or how they will affect future drugs that we may develop and commercialize.]

- We may face manufacturing, supply, and distribution difficulties, among other challenges, delays, or interruptions, including at our third-parties.

- Failure to maintain our third-party relationships or challenges at or with these third parties could materially harm our business.

- Our stock price may fluctuate and our quarterly operating results are subject to significant fluctuation.

Product development is highly uncertain and expensive.

- the failure to establish safety and efficacy through clinical trials;

- the failure to obtain marketing approval for the product candidate;

- the inability to manufacture the product candidate on economically feasible terms;

Our ability to increase our CF product revenues is dependent in part on our ability to successfully commercialize ALYFTREK, our recently approved once-daily CF medicine.

We expect the commercial opportunity for ALYFTREK to depend on three types of patients: (i) those who are currently on a CFTR modulator who may want to switch to ALYFTREK, (ii) those patients who have not yet been initiated on a CFTR modulator or been eligible for a CFTR modulator, and (iii) those who have discontinued from another CFTR modulator.

There can be no assurance that people with CF will be willing to switch from their current CFTR modulator or initiate treatment with ALYFTREK if they are not currently being treated by a CFTR modulator.

JOURNAVX, which was approved in January 2025 for moderate-to-severe acute pain in adults, may not gain or maintain market acceptance among physicians and patients or other members of the medical community.

In addition, there is actual and potential future competition for CASGEVY, including bluebird’s SCD gene therapy, LYFGENIA™, and its TDT gene therapy, ZYNTEGLO™, which are both approved in the U.S. If competing therapies are commercialized, or developed and then commercialized, more successfully by other companies as a treatment for people with SCD or TDT, our future net product revenues and cash flows will be adversely affected and our business could be materially harmed

For example, in December 2024, the FDA modified the labeling of TRIKAFTA by revising information regarding liver injury and liver failure and moving it from the “warnings and precautions” section to a “boxed warning” section, and included similar language in the ALYFTREK label.

- inconvenience of, or burdens associated with, administration or treatment;

While CMS has issued guidance covering the first two years of the program (2026 and 2027), we do not know with certainty what guidance will apply in future years or how such guidance will affect our business.

In February 2023, the U.S. Administration addressed access for cell and gene therapies in diseases such as SCD through the CMS program known as The Cell and Gene Therapy Access Model (“CGT Access Model”).

The CGT Access Model was designed to provide an opportunity to accelerate and enhance broad Medicaid access for eligible patients across all 50 U.S. states by allowing state Medicaid agencies to delegate authority to CMS to coordinate and facilitate outcomes-based payment arrangements (“OBAs”) with cell and gene therapy manufacturers, such as ours.

In 2024, we reached an agreement with CMS to expand access by participating in the CGT Access Model for SCD to benefit Medicaid beneficiaries.

In January 2025, President Trump repealed Executive Order 14087, which had directed CMS to consider innovative pricing models, ultimately leading to the CGT Access Model.

The rescission currently does not appear to impact our agreement with CMS or CMS’ authority to proceed with the CGT Access Model; however, any discontinuation of the CGT Access Model, or CMS’ termination of our agreement to participate in the model in the future, could impact access to CASGEVY.

Some payors restrict reimbursement of drugs through implementing utilization management controls.

revenues.

the timing or the level of reimbursement will be sufficient to allow us to market them.

Moreover, the treatment center network for our products and growth of such network could also impact uptake and necessitate out-of-state access for some beneficiaries if an authorized treatment center is not available within their home state, which could result in further underpayment from out-of-state Medicaid programs.

Furthermore, results from our clinical trials may not meet the level of statistical significance or otherwise

We also may be unable to obtain or be delayed in obtaining regulatory approval due to competition developments that impact our regulatory pathways.

candidates we may develop or limit the use of products utilizing technologies such as ours, either of which could materially harm our business.

As we commercialize products in areas with broader patient populations, we will have more

interactions with a broader set of healthcare practitioners.

In September 2024, CMS issued a final rule withdrawing the challenged accumulator adjustment regulations.

The rule made significant changes to, among other things, penalties for misclassification and the definitions of a covered outpatient drug, internal investigation and market date, which may have an impact on our Medicaid rebate liability.

In general, covered entities distribute 340B drugs through their own in-house pharmacies.

A growing number of covered entities have been contracting with retail and/or specialty pharmacies, known as contract pharmacies, to distribute 340B drugs.

Manufacturers have begun to implement restrictions on covered entities that use contract pharmacies.

Similarly, we limit hospital covered entities to contract with one contract pharmacy if the covered entity does not have an in-house outpatient pharmacy.

Otherwise, hospital covered entities that have an in-house outpatient pharmacy are not permitted to use contract pharmacies.

Our policy applies to our CF and pain products, and it does not apply to Federal grantees and hospitals and any covered entities in states that prohibit manufacturers from restricting covered entities from accessing 340B drugs through contract pharmacies.

Certain states, including Arkansas, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, and West Virginia, have passed laws to regulate the relationship between manufacturers and contract pharmacies.

A number of manufacturers have filed lawsuits against these states.

faster than the rate of inflation.

- Over the last several years all of our product revenues were derived from sales of our CF medicines.

- We depend on third-party manufacturers and our internal capabilities to manufacture our products and the materials we require for our clinical trials.

We rely on third party logistics providers to manage our shipments globally.

We may not be able to maintain our third-party relationships and could experience supply disruptions outside of our control.

Product development is highly uncertain and expensive, and we may experience unforeseen delays, including regulatory and commercialization delays.

Additionally, many of the therapies that we are developing in our pipeline target rare diseases that affect a limited number of patients.

There can be no guarantee that we will effectively identify patients that are eligible for enrollment in our clinical trials or treatment with our product candidates.

Even if we do successfully identify eligible patients, the number of patients that our product candidates are able to treat may turn out to be lower than we expect or new patients may become increasingly difficult to identify, each of which may adversely affect our revenues and materially harm our business.

Over the last several years all of our product revenues were derived from sales of our CF medicines.

We recently obtained approval for CASGEVY for the treatment of people 12 years and older with SCD and TDT in the U.S., the E.U., the U.K., Saudi Arabia, and Bahrain.

specifications;

We have completed the Phase 3 development program for VX-548 in acute pain and we are planning to submit an NDA to the FDA by mid-2024.

We are planning to initiate a Phase 3 development program for VX-548 in neuropathic pain based on positive Phase 2 clinical results we received in the fourth quarter of 2023.

Obtaining approval for VX-548 is uncertain process and we may not be successful.

If we do not obtain approval of VX-548, our business may be materially harmed.

therapies or new therapies that may be developed by competitors.

- convenience and ease of administration;

The law also redesigns the Part D benefit.

The current Coverage Gap Discount Program, which requires manufacturers to provide a 70% discount on brand drugs and biologics during the coverage gap phase, will be eliminated after the 2024 plan year.

phase and a 20% discount during the catastrophic phase of the Part D benefit.

We cannot know what form this program guidance would take or how it would affect our business.

In February 2023, the Secretary submitted a report to the White House describing three models that the Secretary selected for testing.

Among the selected models is a Cell & Gene Therapy Access Model, under which CMS would structure and coordinate multi-state Medicaid outcomes-based agreements between participating states and manufacturers.

The report also directs CMS to consider potential Medicare fee-for-service options to support cell and gene therapy access and affordability.

In October 2023, CMMI further announced that it will move the start-date for the Cell & Gene Therapy Access Model from 2026 to 2025.

On January 30, 2024,CMMI released additional information about the Cell & Gene Therapy Access Model, including the initial focus on cell and gene therapies for sickle cell disease.

CMS intends to negotiate outcomes-based agreements with manufacturers between May 2024 and November 2024.

In addition to the supplemental rebate negotiated under the outcomes-based agreement, participating manufacturers would be required to cover certain fertility preservation services and supports for ancillary services (e.g., travel, case management, behavioral health services).

CMS is requesting that states submit an optional, non-binding letter of intent by April 2024.

Some payors restrict reimbursement to certain patient groups or by indication.

information relating to drug prices, drug price increases, and spending on research, development, and marketing, among other things.

approved for sale by the FDA or comparable foreign regulatory authorities.

For example, in October 2023, we decided not to progress VX-864, a drug candidate for the treatment of AATD, into further development due to non-serious rash events in some patients.

for medicinal products for human use, both permit the EMA to publish clinical information submitted in marketing authorization applications.

the Medicaid Rebate Program; and certain manufacturing-related violations.

The portion of this rule

In May 2023, CMS issued a proposed rule, which would withdraw the challenged accumulator adjustment regulations, consistent with the Court’s order.

The rule also proposes significant changes, which, if finalized, could have an impact on our Medicaid rebate liability, impact our participation in the Medicaid Drug Rebate Program, and impose new reporting requirements.

governing cell and genetic therapy products have changed frequently and may continue to change in the future.

In the U.S., California has passed the California Consumer Privacy Act (the “CCPA”), which went into effect on January 1, 2020.

*Our discussion and analysis of our financial condition and results of operations for [removed: 2023] [added: 2024] as compared to [removed: 2022] [added: 2023] are discussed below.

For a discussion of our financial condition and results of operations for [removed: 2022] [added: 2023] as compared to [removed: 2021,] [added: 2022,] please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our [removed: 2022] [added: 2023] Annual Report on Form 10-K, except as set forth below.*

We have [removed: four] [added: seven] approved [removed: medicines] [added: medicines: five] that treat the underlying cause of cystic fibrosis (“CF”), a life-threatening genetic disease, [removed: and] one [removed: approved therapy] that treats severe sickle cell disease (“SCD”) and transfusion dependent beta thalassemia (“TDT”), life shortening inherited blood [removed: disorders.][added: disorders, and one that treats moderate-to-severe acute pain.]

Our [added: clinical-stage] pipeline includes [removed: clinical-stage] programs in CF, [removed: sickle cell disease,] [added: SCD,] beta thalassemia, acute and [added: peripheral] neuropathic pain, APOL1-mediated kidney disease, [added: IgA nephropathy and other autoimmune renal diseases and cytopenias,] type 1 diabetes, myotonic dystrophy type [removed: 1] [added: 1,] and [removed: alpha-1 antitrypsin deficiency.][added: autosomal dominant polycystic kidney disease.]

Collectively, our [removed: four medicines] [added: five medicines, led by TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor),] are being used to treat nearly three quarters of the approximately [removed: 92,000] [added: 94,000] people with CF in [removed: North America,] [added: the U.S.,] Europe, [added: Australia,] and [removed: Australia.][added: Canada.]

[removed: We] [added: In addition, we] are evaluating our CF medicines in additional patient populations, including younger children, with the goal of having small molecule treatments for all people who have at least one mutation in their [removed: cystic fibrosis transmembrane conductance regulator (“CFTR”)] [added: CFTR] gene that is responsive to our CFTR modulators.

CASGEVY (exagamglogene [removed: autotemcel or “exa-cel”), an] [added: autotemcel), our] ex-vivo, non-viral CRISPR/Cas9 gene-edited cell therapy, [removed: was recently] [added: is] approved in the U.S., the [removed: E.U.,] [added: European Union (“E.U.”),] the United Kingdom (“U.K.”), the Kingdom of Saudi Arabia (“Saudi Arabia”), [removed: and] the Kingdom of Bahrain [removed: (“Bahrain”)] [added: (“Bahrain”), the United Arab Emirates (the “UAE”), Switzerland and Canada] for the treatment of people 12 years of age and older with SCD [removed: and] [added: or] TDT.

We estimate approximately [removed: 35,000] [added: 60,000] people with severe SCD or TDT [added: are or] could [removed: be] [added: become] eligible for CASGEVY in the [removed: U.S. and] [added: U.S., Canada,] Europe, [removed: with additional people in] Saudi [removed: Arabia] [added: Arabia,] and Bahrain.

| *Revenues* | | | In [removed: 2023,] [added: 2024,] our net product revenues increased to [removed: $9.9] [added: $11.0] billion as compared to [removed: $8.9] [added: $9.9] billion in [removed: 2022. The increase was] [added: 2023,] primarily due to [removed: the continued strong uptake of] [added: increased] TRIKAFTA/KAFTRIO [removed: in ex-U.S. markets] [added: product revenues resulting from strong performance] and [removed: label extensions in] [added: demand globally, including expansions into] younger age [removed: groups,] [added: groups] and [removed: the continued performance of TRIKAFTA] [added: label extensions, and higher net realized pricing] in the [removed: U.S., following the launch of TRIKAFTA in children with CF 2 to 5 years of age.] [added: U.S.] | | |

| *Expenses* | | | Our total research and development (“R&D”), [removed: acquired in-process research] and [removed: development (“AIPR&D”), and] selling, general and administrative (“SG&A”) expenses increased to [removed: $4.8] [added: $5.1] billion in [removed: 2023] [added: 2024] as compared to [removed: $3.6] [added: $4.3] billion in [removed: 2022. The increase was] [added: 2023,] primarily due to [removed: increased AIPR&D, the progression of several product candidates in mid-] [added: continued investment] to [removed: late-stage clinical] [added: support additional therapies in mid-to-late stage] development and [removed: costs] [added: increased commercial investments] to support [removed: global launches.] [added: launches of our therapies globally. In 2024, total acquired in-process research and development expenses (“AIPR&D”) of $4.6 billion included $4.4 billion related to our acquisition of Alpine Immune Sciences, Inc. (“Alpine”).] Cost of sales [removed: was 13% and 12%] [added: were 14%] of our net product revenues in [removed: 2023 and 2022, respectively.] [added: 2024 as compared to 13% in 2023, with the increase primarily due to costs associated with CASGEVY.] | | |

| *Cash* | | | Our total cash, cash equivalents and marketable securities [removed: increased] [added: decreased] to [removed: $13.7] [added: $11.2] billion as of December 31, [removed: 2023] [added: 2024] as compared to [removed: $10.9] [added: $13.7] billion as of December 31, [removed: 2022] [added: 2023] primarily due to [removed: our income from operations driven by our net product revenues, and interest income, partially offset by our income tax payments] [added: cash paid to acquire Alpine] and repurchases of our common [removed: stock.] [added: stock, partially offset by cash flows provided by other operating activities.] | | |

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- CASGEVY is now approved in the U.S., the E.U., the U.K., Saudi Arabia, [added: Bahrain, the UAE, Canada] and [removed: Bahrain] [added: Switzerland] for people 12 years of age and older with SCD or TDT.

[removed: VX-548 in] Acute Pain

- In collaboration with Moderna, [added: Inc. (“Moderna”),] we are developing VX-522, a CFTR mRNA therapeutic for the treatment of people with CF who do not produce full-length CFTR protein.

We expect to share [added: Part B full-dose] data from this clinical trial in [removed: late 2024 or early] 2025.

- We have completed enrollment [added: of children 5 to 11 years of age with SCD or TDT] in two global Phase 3 clinical trials evaluating [removed: CASGEVY in children 5] [added: CASGEVY, and we expect] to [removed: 11 years] [added: complete dosing] of [added: this] age [removed: with SCD or TDT.][added: group in 2025.]

- We continue to [removed: work on] [added: advance] preclinical assets for myeloablative conditioning agents that would have milder side-effects and could be used in connection with CASGEVY, which could broaden the eligible patient population.

- [removed: We have completed the] [added: A] Phase [removed: 2 dose-ranging] [added: 3] clinical trial evaluating [removed: VX-548 in] [added: suzetrigine is enrolling and dosing] patients with diabetic peripheral neuropathy, a common form of [removed: chronic] peripheral neuropathic [removed: pain, and announced positive results from this clinical trial.][added: pain.]

- We [removed: expect to initiate] [added: are enrolling and dosing patients in] a Phase 2 clinical trial evaluating the oral formulation of VX-993, a next generation NaV1.8 [added: pain signal] inhibitor, for the treatment of [added: diabetic] peripheral [removed: neuropathic pain in 2024.][added: neuropathy.]

[added: -] We [removed: expect to initiate] [added: are enrolling and dosing patients in] a Phase 2 clinical trial evaluating [removed: the] [added: an] oral formulation of [removed: VX-993] [added: VX-993, a next-generation selective NaV1.8 pain signal inhibitor,] for the treatment of moderate-to-severe acute pain [removed: in the second half of 2024.][added: following bunionectomy surgery.]

- Inaxaplin is our small molecule for the treatment of APOL1-mediated kidney disease [removed: (“AMKD”), including APOL1-mediated focal segmental glomerulosclerosis (“FSGS”).][added: (“AMKD”).]

[added: -] We completed [removed: enrollment in] the [removed: Phase 2B dose-ranging] [added: single ascending dose] portion of the [removed: pivotal program for inaxaplin, a single] [added: global] Phase [removed: 2/3] [added: 1/2] clinical trial [added: for VX-670] in [removed: patients] [added: people] with [removed: AMKD.][added: DM1.]

- The FDA granted Breakthrough Therapy designation to inaxaplin for APOL1-mediated [removed: FSGS] [added: focal segmental glomerulosclerosis (“FSGS”)] and the EMA granted Orphan Drug and PRIME designations to inaxaplin for AMKD.

[removed: - VX-880] [added: *•*Zimislecel] is an allogeneic stem cell-derived, fully differentiated, insulin-producing islet cell replacement therapy, using standard immunosuppression to protect the implanted cells.

We are evaluating [removed: VX-880] [added: zimislecel] as a potential treatment for type 1 diabetes (“T1D”) in a sequential, three-part Phase 1/2 clinical trial.

- Our second [removed: Phase 1/2] program in T1D evaluates VX-264, which encapsulates [removed: the same VX-880 cells] [added: zimislecel] in a novel device designed to eliminate the need for immunosuppression.

[removed: This] [added: The Phase 1/2 clinical] trial is [removed: a sequential, multi-part study to evaluate] [added: evaluating] the safety, tolerability and efficacy of VX-264.

- Our hypoimmune islet cell program uses CRISPR/Cas9 technology to gene-edit the same allogeneic stem cell-derived, fully differentiated islets used in the [removed: VX-880] [added: zimislecel] and VX-264 programs.

In [removed: 2023,] [added: 2024,] our net product revenues came [added: primarily] from the sale of our medicines for the treatment of CF.

Our CF strategy involves continuing to develop and obtain approval and reimbursement for treatment regimens that will provide benefits to all people with CF and increasing the number of people with CF eligible and able to receive our [removed: medicines, including through label expansions, expanded reimbursement, and the development of new] medicines.

We are [removed: advancing our pipeline of product candidates for the treatment of serious diseases outside] [added: continuing to progress commercialization] of [removed: CF, including] CASGEVY, which [removed: recently] [added: has] received marketing approvals in the U.S., the E.U., the U.K., Saudi Arabia, [added: Bahrain, the UAE, Switzerland] and [removed: Bahrain] [added: Canada] for the treatment of SCD and TDT.

We anticipate broad access with government and commercial payors for CASGEVY in the U.S., and we [removed: anticipate early access programs initially, such as the] [added: have] recently [removed: approved early access program for TDT in France, and are pursuing long-term reimbursement] [added: entered into multiple] agreements [removed: outside of the U.S.][added: with government and commercial health insurance providers to provide such access.]

We closely monitor [removed: the results of] our [removed: discovery, research, clinical trials] [added: research] and [removed: nonclinical studies] [added: development activities,] and frequently evaluate our [removed: product development] [added: pipeline] programs in light of new data and scientific, business and commercial insights, with the objective of balancing risk and potential.

Our business also requires ensuring appropriate manufacturing and [removed: reimbursement] [added: supply] of our products.

We rely on a global network of third [removed: parties] [added: parties, including some in China,] and our internal capabilities to manufacture and distribute our products for commercial sale and post-approval clinical trials and to [added: manufacture and distribute our product candidates for clinical trials.]

The processes for [added: biological and] cell and genetic therapies can be more complex than those required for small molecule drugs and require additional investments in different systems, equipment, facilities and expertise.

In the U.S., we have worked successfully with third-party payors to promptly obtain appropriate levels of reimbursement for our CF [removed: medicines and are currently working with U.S. government and commercial payors with respect to CASGEVY.][added: medicines.]

We plan to continue to engage in discussions with numerous commercial insurers and managed health care organizations, along with government health programs that are typically managed by authorities in the individual states, to ensure that payors recognize the significant benefits that [added: all] our therapies provide and provide patients with appropriate levels of access to our medicines and therapies now and in the future.

We cannot, however, predict how [removed: recent] changes in the law, including through the Inflation Reduction Act of 2022 and passage of state laws (e.g., transparency laws and prescription drug affordability boards), will affect our ability to negotiate successfully with third-party payors and distribute our products.

In December 2024, the U.S. Food and Drug Administration (the “FDA”) approved ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor), our once-daily next-in-class triple combination for the treatment of people with CF 6 years of age and older, and our fifth CF medicine.

Through approvals of new medicines, label expansions, and expanded reimbursement, we are focused on increasing the number of people with CF who are eligible and able to receive our medicines.

In December 2024, the FDA approved the expanded use of TRIKAFTA for the treatment of people with CF 2 years of age and older who have at least one F508del mutation in the cystic fibrosis transmembrane conductance regulator (“CFTR”) gene or a mutation that is responsive to TRIKAFTA.

With this approval, 94 additional non-F508del CFTR mutations have been added to the TRIKAFTA label, and approximately 300 additional people with CF in the U.S. are now eligible for TRIKAFTA.

In January 2025, the FDA approved JOURNAVX, our selective non-opioid NaV1.8 pain signal inhibitor, for the treatment of people with moderate-to-severe acute pain.

We have begun our commercial launch of JOURNAVX in the U.S. for eligible adults.

In addition, we are enrolling and dosing patients in a Phase 3 clinical trial evaluating suzetrigine for the treatment of diabetic peripheral neuropathy, a common form of peripheral neuropathic pain.

In December 2024, we announced Phase 2 clinical trial results showing that treatment with suzetrigine demonstrated a statistically significant and clinically meaningful within-group reduction in pain on the numeric pain rating scale for people with lumbosacral radiculopathy (“LSR”), a form of peripheral neuropathic pain.

The clinical trial also included a placebo reference arm, which showed a similar within-group reduction.

Suzetrigine was safe and generally well-tolerated in the Phase 2 clinical trial.

We hypothesize that a high placebo response in this clinical trial led to a lack of separation of the suzetrigine and placebo response curves.

We believe we can innovate in pain clinical trial design to better control the placebo effect, and succeed in pivotal development with suzetrigine.

We plan to advance suzetrigine into pivotal development in LSR, pending discussions with regulators on trial design and the regulatory package.

We expect to grow our CF business by increasing the number of people with CF who are eligible and able to receive our medicines.

We have revised estimates for the number of people with CF in the U.S., Europe, Australia, and Canada from approximately 92,000 to approximately 94,000 people.

Additionally, we continue to secure formal reimbursement in multiple additional countries that collectively comprise approximately 15,000 additional people with CF.

Approximately 10,000 of those additional people with CF are eligible for treatment with CFTR modulators.

We previously served many of these markets through named patient sales.

Recent progress in activities expanding our CF business is included below:

- In December 2024, the FDA approved ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor), the once-daily next-in-class combination CFTR modulator for the treatment of people with CF 6 years of age and older who have at least one F508del mutation or another mutation in the CFTR gene that is responsive to ALYFTREK, which includes a total of 303 CFTR mutations.

Regulatory submissions for ALYFTREK, including in the U.K., the E.U., Canada, Switzerland, Australia, and New Zealand, are currently under review.

- In December 2024, the FDA approved the expanded use of TRIKAFTA for the treatment of people with CF with 94 additional non-F508del CFTR mutations.

TRIKAFTA is now approved in the U.S. for a total of 272 CFTR mutations.

We have also submitted regulatory applications to the European Medicines Agency (“EMA”) for TRIKAFTA/KAFTRIO for the treatment of people with CF and rare responsive mutations.

- We entered into an extended long-term reimbursement agreement with NHS England providing access to KAFTRIO, SYMKEVI and ORKAMBI, and continued access to KALYDECO, for existing and future eligible CF patients in England.

We have entered into similar reimbursement agreements in Wales, Northern Ireland and Scotland.

These reimbursement agreements include access to any future license extensions of these medicines.

- KAFTRIO is reimbursed in all 27 countries of the E.U.

- We have activated more than 50 authorized treatment centers globally, and more than 50 patients have initiated cell collection.

We expect significant growth in the number of new patients initiating cell collection throughout 2025.

- We entered into a reimbursement agreement with NHS England for eligible people with SCD to access CASGEVY, consistent with the reimbursement agreement reached in August 2024 with NHS England for eligible people with TDT to access CASGEVY.

- The Italian Medicines Agency has approved early access for CASGEVY, on a case-by-case basis, for the treatment of people with TDT and SCD.

*•*In January 2025, the FDA approved JOURNAVX for the treatment of moderate-to-severe acute pain in adults.

We are working to secure broad stocking agreements for JOURNAVX with national retail pharmacies and regional pharmacy chains.

We expect to begin shipping JOURNAVX to pharmacies nationwide by the end of February, with retail availability beginning shortly thereafter.

- We expect that JOURNAVX will be qualified for the add-on payment under the Non-Opioids Prevent Addiction in the Nation (“NOPAIN”) Act, which provides for a separate payment in the hospital outpatient or surgical center setting for FDA-approved non-opioid treatments for pain.

- We are enrolling and dosing in a Phase 3 clinical trial evaluating ALYFTREK in children with CF 2 to 5 years of age who have at least one F508del mutation or a mutation responsive to triple combination CFTR modulators.

The multiple ascending dose portion of the Phase 1/2 clinical trial for VX-522 is underway, with data expected in the first half of 2025.

- We continue to advance new oral small molecule combination therapies through preclinical and clinical development with the aim of achieving normal levels of CFTR function.

The most advanced of the next generation of CFTR modulators have completed, or are in the process of completing, Phase 1 clinical trials.

Our triple combination regimen, TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), was approved in 2019 in the United States (“U.S.”) and in 2020 in the European Union (“E.U.”).

In addition, we are preparing for near-term launches of potential new products in CF and acute pain.

We expect to grow our CF business with (i) continued uptake by patients in countries where we are early in our launch, such as those with recently achieved reimbursement agreements, (ii) label expansions, including into younger patient groups, and (iii) growth in the number of people living with CF.

Recent progress in activities supporting continued uptake and label expansions is included below:

- The U.S. Food and Drug Administration (“FDA”), the European Commission, the Medicines and Healthcare Products Regulatory Agency (“MHRA”), and Health Canada approved TRIKAFTA/KAFTRIO for the treatment of children with CF 2 to 5 years of age who have at least one F508del mutation in the CFTR gene.

- The European Medicines Agency (“EMA”) validated the Marketing Authorization Application (“MAA”) extension for KAFTRIO in combination with ivacaftor to include people with CF who have a rare mutation in the CFTR gene that is responsive based on clinical and/or in vitro data, including the N1303K mutation.

We plan to submit regulatory filings for these mutations in Australia, Brazil, Canada, New Zealand and Switzerland, and we plan to submit for regulatory approval of a subset of these mutations not currently included in the U.S. TRIKAFTA label to the FDA.

- The FDA and the European Commission approved the use of ORKAMBI for children with CF 12 to less than 24 months of age who are homozygous for the F508del mutation in the CFTR gene.

- The FDA and MHRA approved KALYDECO in children with CF from 1 month to less than 4 months of age.

- The French National Authority for Health (“HAS”) approved our request for the implementation of an early access program (“EAP”) for the use of CASGEVY to treat eligible people with TDT from 12 to 35 years of age.

We are also pursuing an EAP submission for SCD in France and we expect to receive the outcome of this decision in the coming months.

- Our regulatory submission for CASGEVY in both SCD and TDT is currently under review in Switzerland.

We expect to submit for regulatory approval of CASGEVY in Canada in the first half of 2024.

- We have activated 12 authorized treatment centers (“ATCs”) in the U.S. and three ATCs in Europe.

We are aiming to activate approximately 50 ATCs in the U.S. and 25 in Europe.

We also have activated one of two planned ATCs in Saudi Arabia.

- We entered into an agreement with Synergie Medication Collective, a medication contracting organization, which covers approximately 100 million people, to provide access to CASGEVY.

*Potential Near-Term Launch Opportunities*

We are preparing for the following near-term launches of potential new products:

Vanzacaftor/tezacaftor/deutivacaftor in CF

- We completed the pivotal SKYLINE 102 and SKYLINE 103 clinical trials, which evaluate the efficacy and safety of our new once-daily investigational triple combination vanzacaftor/tezacaftor/deutivacaftor relative to TRIKAFTA in people with CF 12 years of age and older, and the RIDGELINE clinical trial of vanzacaftor/tezacaftor/deutivacaftor in children with CF 6 to 11 years of age, at the end of 2023.

- In February 2024, we announced positive data from this Phase 3 program evaluating the new triple combination regimen.

We expect to submit global regulatory filings by mid-2024, including a New Drug Application (“NDA”) to the FDA, using a priority review voucher, and MAAs to the EMA and Health Canada.

- We completed the pivotal program evaluating our lead compound, VX-548, for the treatment of moderate-to-severe acute pain, which included one randomized controlled Phase 3 pivotal trial in abdominoplasty, one randomized, controlled Phase 3 clinical trial in bunionectomy, and one single-arm safety and effectiveness clinical trial.

In January 2024, we announced positive results from these clinical trials and we announced our plans to submit an NDA to the FDA for VX-548 in moderate-to-severe acute pain by mid-2024.

- In the U.S., VX-548 has been granted Breakthrough Therapy and Fast Track designations for moderate-to-severe acute pain.

We completed dosing in the single ascending dose part of the clinical trial for VX-522 and initiated the multiple ascending dose part of the clinical trial in late 2023.

- We are investigating a portfolio of other small molecules targeting the underlying cause of CF with the aim of achieving carrier levels of CFTR function.

We plan to meet with regulators in the first quarter of 2024 and then we expect to advance VX-548 for the treatment of diabetic peripheral neuropathy into pivotal development.

- We initiated a second Phase 2 clinical trial evaluating VX-548 in patients with peripheral neuropathic pain in December 2023.

This clinical trial will evaluate VX-548 in patients with lumbosacral radiculopathy, a second type of peripheral neuropathic pain.

Screening, enrollment and dosing are underway in this clinical trial.

- We have completed a Phase 1 clinical trial evaluating an oral formulation of VX-993, a next generation NaV1.8 inhibitor.

- We anticipate completing IND-enabling studies and filing an Investigational New Drug Application (“IND”) for an intravenous formulation of VX-993 for the treatment of moderate-to-severe acute pain in 2024.

We expect to select a dose and begin the Phase 3 portion of the clinical trial in the first quarter of 2024.

We have completed enrollment in Part C of the clinical trial.

We have placed the clinical trial on a protocol-specified pause, pending review of the totality of the data by an independent data monitoring committee and global regulators, following two patient deaths, both unrelated to VX-880.

We have completed Part A of the clinical trial and Part B has been initiated in multiple centers and countries.

- We have established a collaboration with Entrada Therapeutics, Inc. (“Entrada”) to address the functional impact of the causal mutation in the gene that causes myotonic dystrophy type 1 (“DM1”), which includes VX-670.

VX-670 is designed to enable efficient intracellular delivery of an oligonucleotide, which we believe will address the underlying pathophysiology and restore normal cell function.

These investments are [added: primarily] denominated in U.S. Dollars and none are held for trading purposes.

As of December 31, [removed: 2023,] [added: 2024,] we had no principal or interest outstanding under our credit facility.

A portion of our “Interest expense” in [removed: 2024] [added: 2025] will be dependent on whether, and to what extent, we borrow amounts under this facility.

As of December 31, [removed: 2023,] [added: 2024,] we held foreign exchange forward contracts that were designated as cash flow hedges with notional amounts totaling [removed: $2.4] [added: $2.9] billion representing a net [removed: liability] [added: asset] of [removed: $31.9] [added: $142.5] million on our consolidated balance sheet.

If the December 31, [removed: 2023] [added: 2024] exchange rates were to change by a hypothetical 10%, the fair value recorded on our consolidated balance sheet related to our foreign exchange forward contracts that were designated as cash flow hedges as of December 31, [removed: 2023] [added: 2024] would change by approximately [removed: $239.2] [added: $286.0] million.

However, since these contracts hedge a specific portion of our forecasted product revenues denominated in certain foreign currencies, any change in the fair value of these contracts is recorded in “Accumulated other comprehensive [removed: (loss) income”] [added: income (loss)”] on our consolidated balance sheets and is [added: reclassified to earnings in the same periods during which the underlying product revenues affect earnings.]

In [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] we recorded net losses of [removed: $0.6] [added: $9.5] million and [removed: $149.1] [added: $0.6] million, respectively, to “Other [removed: Income (Expense), Net”] [added: income (expense), net”] in our consolidated statements of income to reflect changes in the fair value of equity investments with readily determinable fair values (including publicly traded securities).

The fair value of our equity investments in publicly traded companies was less than $50.0 million as of December 31, [removed: 2023.][added: 2024.]

reclassified to earnings in the same periods during which the underlying product revenues affect earnings.

We have [removed: four] [added: seven] approved [removed: medicines] [added: medicines: five] that treat the underlying cause of cystic fibrosis (“CF”), a life-threatening genetic disease, [removed: and] one [removed: approved therapy] that treats severe sickle cell disease (“SCD”) and transfusion dependent beta thalassemia (“TDT”), life shortening inherited blood [removed: disorders.][added: disorders, and one that treats moderate-to-severe acute pain.]

Our [added: clinical-stage] pipeline includes [removed: clinical-stage] programs in CF, [removed: sickle cell disease,] [added: SCD,] beta thalassemia, acute and [added: peripheral] neuropathic pain, APOL1-mediated kidney disease, [added: IgA nephropathy and other autoimmune renal diseases and cytopenias,] type 1 diabetes, myotonic dystrophy type [removed: 1] [added: 1,] and [removed: alpha-1 antitrypsin deficiency.][added: autosomal dominant polycystic kidney disease.]

Our goal in CF is to [removed: develop] [added: continue to extend our leadership by developing] treatment regimens that will provide benefits to all people with [removed: CF and will enhance the benefits currently provided to people taking our medicines.][added: CF.]

[removed: Our] [added: In addition to ALYFTREK, our] marketed medicines that treat people with CF are TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), SYMDEKO/SYMKEVI (tezacaftor/ivacaftor and ivacaftor), ORKAMBI (lumacaftor/ivacaftor) and KALYDECO (ivacaftor).

Collectively, our [removed: four] [added: five] marketed CF medicines are being used to treat nearly three quarters of the approximately [removed: 92,000] [added: 94,000] people with CF in [removed: North America, Europe] [added: the U.S., Europe, Australia,] and [removed: Australia.][added: Canada.]

Through [removed: label expansions,] approval of new medicines, [added: label expansions,] and expanded reimbursement, we are focused on increasing the number of people with CF who are eligible and able to receive our medicines.

[removed: In addition, we have initiated the multiple ascending dose portion of the Phase 1/2 clinical trial of] [added: We are evaluating] VX-522, an investigational messenger ribonucleic acid (“mRNA”) therapeutic [added: that] we are developing in collaboration with Moderna, Inc. [removed: (“Moderna”).][added: (“Moderna”) in a Phase 1/2 clinical trial in people with CF.]

We expect to share [added: Part B full-dose] data from this clinical trial in [removed: late 2024 or early] 2025.

VX-522 has the potential to benefit the more than 5,000 people with CF in [removed: North America,] [added: the U.S., Canada,] Europe and Australia who do not make full-length CFTR protein and [added: therefore] cannot benefit from CFTR modulators.

In addition, we are continuing our research and development of [added: additional] CFTR modulators, with the aim of developing best-in-class medicines that can help more patients achieve [removed: carrier] [added: normal] levels of CFTR function, and we are investigating additional potential treatments for people with CF who do not make full-length CFTR protein and cannot benefit from CFTR modulators.

Our marketed therapy is CASGEVY (exagamglogene [removed: autotemcel, or “exa-cel”),] [added: autotemcel),] an ex-vivo, non-viral CRISPR/Cas9 gene-edited cell therapy, which has been approved in the United States (“U.S.”), the European Union (“E.U.”), the United Kingdom (“U.K.”), the Kingdom of Saudi Arabia (“Saudi Arabia”), [removed: and] the Kingdom of Bahrain [removed: (“Bahrain”)] [added: (“Bahrain”), the United Arab Emirates (the “UAE”), Canada and Switzerland] for treatment of [removed: SCD] [added: people 12 years of age] and [added: older with SCD or] TDT.

We estimate approximately [removed: 35,000] [added: 60,000] people with severe SCD or TDT [added: are or] could [removed: be] [added: become] eligible for CASGEVY in the [removed: U.S. and] [added: U.S., Canada,] Europe, [removed: with additional eligible people in] Saudi Arabia and Bahrain.

[removed: In connection with our serial innovation approach, we] [added: We] are progressing preclinical assets for gentler conditioning for CASGEVY, which could broaden the eligible patient population, and [removed: we are] investigating small molecules for the potential treatment of SCD and TDT.

The following chart [removed: represents] [added: sets forth] our [added: approved products,] clinical-stage programs, and select pre-clinical programs:

[removed: ][added: ]

- *APOL1-Mediated Kidney Disease.* We are evaluating inaxaplin, [removed: formerly known as VX-147,] our [removed: investigational] small molecule for the treatment of APOL1-mediated kidney disease [removed: (“AMKD”) in a Phase 2/3 clinical trial.][added: (“AMKD”).]

We [removed: expect to select a dose and move to] [added: completed] the Phase [removed: 3] [added: 2B] portion of the [added: Phase 2/3] clinical trial [removed: in] [added: and initiated] the [removed: first quarter] [added: Phase 3 portion] of [added: the study in] 2024.

[removed: - *Type 1 Diabetes.* We are evaluating] [added: Z*imislecel, formerly known as] VX-880, [added: is] an [removed: investigational] allogeneic stem-cell derived, fully differentiated islet cell [removed: therapy,] [added: therapy in pivotal development] for the treatment of type 1 diabetes [removed: (“T1D”) in a Phase 1/2 clinical trial in which patients also receive immunosuppressive therapy to protect the islet cells from immune rejection.][added: (“T1D”).]

Our second clinical program in T1D, VX-264, in which [removed: the implanted islet cells are] [added: zimislecel is] encapsulated in an immunoprotective device, is ongoing.

We [removed: initiated a] [added: completed the single ascending dose portion of the global] Phase 1/2 clinical trial evaluating VX-670, an oligonucleotide-based approach that we have in-licensed from Entrada Therapeutics, Inc. (“Entrada”).

We plan to continue investing to advance our strategy, fostering scientific innovation by identifying additional product candidates through internal research efforts, and investing in business development transactions to access [added: emerging technologies, products and product candidates.]

Our CF medicines are the exemplar of this strategy, as we continue to reach more people with CF than ever before through [removed: label expansions,] approvals of new [removed: medicines] [added: medicines, approvals in new geographies, label expansions, including for younger patients,] and expanded reimbursement.

| [removed: ] [added: ] | | | 2019 | | | 2 years of age and older | | |

| [removed: ] [added: ] | | | 2020 | | | 2 years of age and older | | |

| [removed: ] [added: ] | | | 2018 | | | 6 years of age and older | | |

| [removed: ] [added: ] | | | 2018 | | | 6 years of age and older | | |

| [removed: ] [added: ] | | | 2015 | | | 1 year of age and older | | |

| [removed: ] [added: ] | | | 2012 | | | 1 month of age and older | | |

| [removed: ] [added: ] | | | 2023 | | | 12 years of age and older | | |

Our CF medicines are collectively being used by nearly three quarters of the approximately [removed: 92,000] [added: 94,000] people with CF in [removed: North America,] [added: the U.S.,] Europe, [added: Australia,] and [removed: Australia.][added: Canada.]

CFTR potentiators, such as [removed: ivacaftor,] [added: ivacaftor and deutivacaftor,] increase the probability that the CFTR protein channels open on the cell surface, increasing the flow of salt and water into and out of the cell.

CFTR correctors, such as lumacaftor, tezacaftor, [added: elexacaftor] and [removed: elexacaftor,] [added: vanzacaftor,] increase the proper protein processing and folding of mutant CFTR proteins, such that a larger amount of [added: functional CFTR protein reaches the cell surface.]

Our CF medicines are used by patients in over 60 countries, and TRIKAFTA/KAFTRIO is [removed: now] approved and reimbursed or accessible in more than [removed: 40] [added: 50] of these countries.

We continue to increase the number of patients eligible and able to receive our current medicines through [added: approvals of new medicines,] label expansions and expanded reimbursement.

CASGEVY, our therapy for SCD and TDT, [removed: was recently] [added: is] approved in the U.S., the E.U., the [removed: U.K.] [added: U.K.,] Saudi Arabia, [added: Bahrain, the UAE, Canada] and [removed: Bahrain.][added: Switzerland.]

These sickled cells block blood flow and can lead to severe [removed: pain,] [added: pain (known as vaso-occlusive crises),] organ damage, and shortened life span.

Beta thalassemia is caused by loss-of-function mutations in the [added: same] β-hemoglobin gene that lead to severe anemia in patients, which causes fatigue and shortness of breath.

Patients first undergo a treatment at an authorized treatment center [removed: (an “ATC”)] [added: (“ATC”)] that mobilizes a population of hematopoietic stem and progenitor cells (“HSPC”) from the bone marrow into the bloodstream.

[removed: Blood] [added: These] cells are collected from the patient’s bloodstream and transferred to a manufacturing facility where the HSPCs are purified and CRISPR/Cas9 gene-editing is performed.

The [removed: gene editing] [added: gene-editing] procedure results in a precise and specific [removed: gene edit] [added: gene-edit] in a non-coding intron of the BCL11A gene.

In December 2024, the U.S. Food and Drug Administration (the “FDA”) approved ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor), our fifth medicine for people with CF.

In December 2024, the FDA approved the expanded use of TRIKAFTA for treatment of people with CF.

With this approval, 94 additional non-F508del CFTR mutations have been added to the TRIKAFTA label.

The multiple ascending dose portion of the clinical trial is ongoing, and we expect to share data in the first half of 2025.

We are evaluating CASGEVY as a treatment for children 5 to 11 years of age with SCD or TDT in global Phase 3 clinical trials.

In January 2025, the FDA approved JOURNAVX (suzetrigine), our selective non-opioid NaV1.8 pain signal inhibitor, for the treatment of moderate-to-severe acute pain.

We have begun our commercial launch of JOURNAVX in eligible adults in the U.S. In addition, we are enrolling and dosing patients in a Phase 3 clinical trial evaluating suzetrigine for the treatment of diabetic peripheral neuropathy, a common form of peripheral neuropathic pain.

We are enrolling and dosing patients in two Phase 2 clinical trials evaluating VX-993, a next-generation selective NaV1.8 pain signal inhibitor, for the treatment of acute pain and for the treatment of diabetic peripheral neuropathy.

Treatment with suzetrigine

demonstrated a statistically significant and clinically meaningful within-group reduction in pain and we plan to advance to pivotal development in LSR, pending discussions with regulators.

We continue to enroll and dose people with AMKD in the Phase 3 portion of the global Phase 2/3 clinical trial.

- *IgA Nephropathy*.

We are developing povetacicept, a dual inhibitor of the B cell activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) pathways, as a potentially best-in-class approach to treat IgA nephropathy (“IgAN”), a serious progressive, autoimmune kidney disease that can lead to end-stage renal disease.

We are enrolling and dosing patients in the Phase 3 clinical trial evaluating povetacicept in people with IgAN.

*•Type 1 Diabetes.

We are also pursuing alternative approaches to immunosuppression that could be used with zimislecel, as well as hypoimmune cells.

We are enrolling and dosing the multiple ascending dose portion of the trial, which will evaluate the safety and efficacy of VX-670.

- *Autosomal Dominant Polycystic Kidney Disease*.

We are nearing completion of a Phase 1 clinical trial in healthy volunteers evaluating VX-407, our first-in-class small molecule corrector that targets the underlying cause of autosomal dominant polycystic kidney disease (“ADPKD”) in people with a subset of variants in the PKD1 gene.

We expect to advance VX-407 into a Phase 2 proof-of-concept study in people with ADPKD in 2025.

In addition, we have diversified our business through the approvals for CASGEVY for the treatment of SCD and TDT and through the approval for JOURNAVX for the treatment of acute pain.

We are working to ensure broad access for eligible patients with these conditions in all countries with regulatory approval.

Within our clinical pipeline, we have rapidly progressed multiple programs into pivotal development during the last year.

As we continue to invest in our serial innovation strategy, launch new products, advance our diverse pipeline, and expand geographically, we continue to maintain a strong financial profile.

|  | | | 2024 | | | 6 years of age and older | | |

|  | | | 2025 | | | adults | | |

Additionally, we continue to secure formal reimbursement in multiple additional countries that collectively comprise approximately 15,000 additional people with CF.

Approximately 10,000 of those additional people with CF are eligible for treatment with CFTR modulators.

We previously served many of these markets through named patient sales.

In December 2024, the FDA approved the expanded use of TRIKAFTA for the treatment of people with CF 2 years of age and older who have at least one F508del mutation in the CFTR gene or a mutation that is responsive to TRIKAFTA based on clinical and/or in vitro data.

With this approval, 94 additional non-F508del CFTR mutations have been added to the TRIKAFTA label.

In December 2024, the FDA approved ALYFTREK for the treatment of people with CF 6 years of age and older who have at least one F508del mutation or another mutation in the CFTR gene that is responsive to ALYFTREK.

ALYFTREK is our next-in-class triple combination, which has the benefit of a once-daily dosing regimen and demonstrated non-inferiority to TRIKAFTA in ppFEV1, a measure of lung function, and an improvement in sweat chloride levels as compared to TRIKAFTA.

ALYFTREK carries a lower royalty burden than our other approved CF medicines and is also approved for 31 additional mutations not responsive to other CFTR modulator therapies.

Patients are preconditioned with a myeloablative

Our global launch strategy for CASGEVY continues to focus on countries with high unmet medical need and infrastructure to support treatment with this CRISPR/Cas9-based gene-editing therapy, including the U.S., the Middle East, and major markets in Europe.

We are working with ATCs to enable patient initiation, supporting the patient journey through infusion with CASGEVY, and working with payors to secure broad and equitable access for patients.

Our teams are also focused on working to educate patients, physicians and policymakers on the treatment journey and CASGEVY clinical data, where appropriate.

Acute Pain

Acute pain is a disabling condition that may occur suddenly but typically lasts less than 90 days and resolves in days or weeks (for example, following surgery or an injury).

We have completed Phase 3 development of a triple combination of vanzacaftor/tezacaftor/deutivacaftor, which has demonstrated the potential to provide additional clinical benefits, as well as once-daily dosing, to people with CF who have at least one mutation in their CFTR gene that is responsive to CFTR modulators.

This regimen also carries a lower royalty burden.

We plan to submit global regulatory filings for this new triple combination regimen by mid-2024.

In January 2024, we announced positive results from our Phase 3 clinical trials evaluating VX-548, a non-opioid investigational NaV 1.8 inhibitor, for the treatment of moderate-to-severe acute pain.

We plan to submit for regulatory approval of VX-548 in moderate-to-severe acute pain in the U.S. by mid-2024.

In addition, in December 2023, we announced positive results from the Phase 2 clinical trial evaluating VX-548 for the treatment of diabetic peripheral neuropathy (“DPN”), a type of peripheral neuropathic pain.

We expect to advance VX-548 into pivotal development in DPN in 2024.

We have completed enrollment in Part C of this clinical trial.

VX-880 is on a protocol-specified pause, pending review of the totality of the data by the independent data monitoring committee and global regulators.

We have completed Part A of this Phase 1/2 clinical trial and we have initiated Part B in multiple centers and countries.

The clinical trial is active and enrolling in Canada and will initiate in the U.K. in the near term.

- *Alpha-1 Antitrypsin Deficiency.* We continue to enroll and dose healthy volunteers in Phase 1 clinical trials for VX-634 and VX-668, our next-wave investigational molecules with significantly improved potency and drug-like properties as compared to our previous alpha-1 antitrypsin (“AAT”) correctors.

emerging technologies, products and product candidates.

In addition, we have obtained historic approvals for CASGEVY for the treatment of SCD and TDT and are working towards broad access for eligible patients to this potentially curative treatment option.

We continue to advance our broad and diverse pipeline and prepare for potential near-term global commercial launches in new disease areas, and further strengthen our financial profile.

functional CFTR protein reaches the cell surface.

In addition to the E.U. and the U.S., we market our products in additional countries, including the U.K., Australia, Canada, Brazil and Switzerland.

Our global launch strategy for CASGEVY is focused on disease education and awareness for patients, caregivers, health care professionals, payors, and policymakers, as well as engagement with the scientific and medical community regarding CASGEVY clinical data.

In addition, our approach concentrates on achieving access for patients through reimbursement agreements with governments and commercial payors, as well as through early access programs where applicable.

We have completed the Phase 3 global program evaluating a once-daily investigational triple combination of vanzacaftor/tezacaftor/deutivacaftor.

Our Phase 3 program consisted of two 52-week randomized, controlled clinical trials, SKYLINE 102 and SKYLINE 103, which evaluated the safety and efficacy of the new combination relative to TRIKAFTA in approximately 950 people with CF 12 years of age and older, and the single arm RIDGELINE trial, evaluating vanzacaftor/tezacaftor/deutivacaftor in children with CF 6 to 11 years of age.

In February 2024, we announced positive data from this Phase 3 program.

The data from these trials demonstrate that this triple combination provides additional benefit beyond TRIKAFTA for people with CF who have the F508del mutation on at least one allele that is CFTR modulator responsive.

This new triple combination regimen was safe and well-tolerated in all three clinical trials.

We expect to submit global regulatory filings for this triple combination by mid-2024, including a New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”), using a priority review voucher, and Marketing Authorization Applications to the EMA and Health Canada, for people with CF 6 years of age and older.

We estimate that approximately 90% of people with CF could benefit from vanzacaftor/tezacaftor/deutivacaftor.

multiple ascending dose part of the clinical trial.

In acute pain, we completed two randomized, placebo-controlled Phase 3 clinical trials for our lead compound, VX-548, evaluating patients with moderate-to-severe acute pain following abdominoplasty or bunionectomy surgery.

We also completed a single-arm clinical trial evaluating the safety and effectiveness of VX-548 in multiple other types of moderate-to-severe acute pain.

In January 2024, we announced positive results from these clinical trials.

The clinical trials demonstrated that treatment with VX-548 led to statistically significant improvement on the primary endpoint of the time-weighted sum of the pain intensity difference compared to placebo, as well as clinically meaningful reduction in pain from baseline on the numeric pain rating scale after abdominoplasty surgery or bunionectomy surgery.

VX-548 was safe and well tolerated in all three Phase 3 studies.

We also announced our plans to submit an NDA to the FDA by mid-2024, with the goal of securing a broad label for the treatment of moderate-to-severe acute pain.

The clinical trial demonstrated that treatment with VX-548 led to a statistically significant and clinically meaningful reduction in the primary endpoint of change from baseline in the weekly average of daily pain intensity on a numeric pain rating scale at week 12.

VX-548 was generally well-tolerated at all doses tested in the clinical trial.

We also announced our plans to advance VX-548 for the treatment of DPN into pivotal development, with the ultimate goal of securing a broad label for the treatment of peripheral neuropathic pain.

We also anticipate initiating a Phase 1 clinical trial evaluating an intravenous formulation of VX-993 in 2024.

Additionally, we are advancing multiple NaV1.8 inhibitors and NaV1.7 inhibitors through research and earlier stages of development for pain.

In this clinical trial, inaxaplin was well tolerated by patients.

In Part A, the first two patients received half the target dose of VX-880 cells and the results demonstrated proof-of-concept that VX-880 can restore glucose-regulated insulin production and improve glycemic control.

For the Fiscal Year Ended December 31, [removed: 2023][added: 2024]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant based on the closing price on June [removed: 30, 2023] [added: 28, 2024] (the last business day of the registrant’s most recently completed second fiscal quarter of [removed: 2023)] [added: 2024)] was [removed: $90.7] [added: $121.8] billion.

As of February [removed: 9, 2024,] [added: 7, 2025,] the registrant had [removed: 258,307,816] [added: 256,789,869] shares of common stock outstanding.

Portions of the definitive proxy statement for the [removed: 2024] [added: 2025] Annual Meeting of Shareholders, which we expect to hold on May [removed: 15, 2024,] [added: 14, 2025,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

| [Item [removed: 1.](#i426abec21e574c9bbd8ccf8e3524d2a6_13)] [added: 1.](#ie9f459f6387e4b038fe2ec4558eff10a_13)] | | | [removed: [Business](#i426abec21e574c9bbd8ccf8e3524d2a6_13)] [added: [Business](#ie9f459f6387e4b038fe2ec4558eff10a_13)] | | | [removed: [1](#i426abec21e574c9bbd8ccf8e3524d2a6_13)] [added: [1](#ie9f459f6387e4b038fe2ec4558eff10a_13)] | | |

| | | | [Information about our Executive [removed: Officers](#i426abec21e574c9bbd8ccf8e3524d2a6_46)] [added: Officers](#ie9f459f6387e4b038fe2ec4558eff10a_46)] | | | [removed: [28](#i426abec21e574c9bbd8ccf8e3524d2a6_46)] [added: [30](#ie9f459f6387e4b038fe2ec4558eff10a_46)] | | |

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“VERTEX®,” “KALYDECO®,” “ORKAMBI®,” “SYMDEKO®,” “SYMKEVI®,” “TRIKAFTA®,” “KAFTRIO®,” [added: “CASGEVY®,” “ALYFTREK™,”] and [removed: “CASGEVY™”] [added: “JOURNAVX™”] are registered trademarks of Vertex.

Otherwise, including in discussions of our cystic fibrosis, sickle cell disease, [removed: and] beta [removed: thalassemia] [added: thalassemia, and pain] development programs, we refer to our product candidates by their scientific (or generic) name or VX developmental designation.

| [PART I](#ie9f459f6387e4b038fe2ec4558eff10a_10) | | | | | | | | |

| [PART II](#ie9f459f6387e4b038fe2ec4558eff10a_103) | | | | | | | | |

| [PART III](#ie9f459f6387e4b038fe2ec4558eff10a_151) | | | | | | | | |

| [PART IV](#ie9f459f6387e4b038fe2ec4558eff10a_169) | | | | | | | | |

| | | | [Signatures](#ie9f459f6387e4b038fe2ec4558eff10a_178) | | | [99](#ie9f459f6387e4b038fe2ec4558eff10a_178) | | |

| [PART I](#i426abec21e574c9bbd8ccf8e3524d2a6_10) | | | | | | | | |

| [PART II](#i426abec21e574c9bbd8ccf8e3524d2a6_64) | | | | | | | | |

| [PART III](#i426abec21e574c9bbd8ccf8e3524d2a6_109) | | | | | | | | |

| [PART IV](#i426abec21e574c9bbd8ccf8e3524d2a6_127) | | | | | | | | |

| | | | [Signatures](#i426abec21e574c9bbd8ccf8e3524d2a6_136) | | | [93](#i426abec21e574c9bbd8ccf8e3524d2a6_136) | | |

We did not receive any written comments from the Securities and Exchange Commission prior to the date 180 days before the end of the fiscal year ended December 31, [removed: 2023] [added: 2024] regarding our filings under the Securities Exchange Act of 1934, as amended, that have not been resolved.

Our cybersecurity program includes systems and processes for assessing, identifying and managing material risks from cybersecurity threats and include maintenance and monitoring of information security policies aligned with global regulatory [removed: controls;] [added: controls and aligned with National Institute of Standards and Technology Cybersecurity Framework;] user and employee awareness of cyber policies and practices; information systems configuration management; third-party risk management systems; identity and information asset protection; infrastructure security systems; and cyber threat operations with continuous monitoring and threat hunting.

We also engage a range of third-party experts in connection with various development, implementation, and maintenance activities related to our cybersecurity [removed: program.][added: program, including audit and compliance, threat hunting, monitoring, and end-user support.]

Our CISO provides [removed: periodic] [added: quarterly] updates to the Audit Committee in this regard, and covers the state of our cybersecurity program, supported by key performance indicators across the range of cybersecurity functions related to risk management and governance, identity and information asset protection, core security and endpoint security, and cyber threat operations.

At the same time, primary responsibility for assessing, monitoring, and managing our cybersecurity risks lies with our CISO, Michael [removed: Daly.][added: Daly, who has more than 35 years of experience in security and information systems and spent 25 years with Raytheon Technologies, most recently as Chief Technology Officer of Cybersecurity, Special Missions, Training & Services.]

[removed: Mr. Daly] [added: Our CISO] supported the U.S. President's National Security Telecommunications Advisory Committee for more than 20 years, is a member of the Massachusetts Cybersecurity Strategy Council, and [removed: is] [added: previously served as] Chair of the Kogod Cybersecurity Governance Center at American University.

[removed: Formerly, he] [added: He also] served on the Rhode Island Homeland Security Advisory Board and was a member of various commercial cyber product councils.

[removed: Mr. Daly] [added: Our CISO] oversees a team of skilled cybersecurity professionals who have Certified Information Systems Security Professional (“CISSP”) credentials, Global Information Assurance Certification from the SANS Institute, and other security and network certifications.

The cybersecurity team uses various tools and methodologies to manage cybersecurity risk that are tested on a regular cadence, [added: and assesses and evaluates cybersecurity incidents, escalating certain cybersecurity incidents to the CISO according to protocol.]

[removed: Mr. Daly] [added: The CISO] is continually informed regarding the performance of the cybersecurity program, as well as the latest developments in cybersecurity, including potential threats and innovative risk management [removed: techniques.][added: techniques aligned with industry standards.]

Similar to other companies, we have experienced cybersecurity incidents, including temporary service interruptions of third-party suppliers.

As of the date of this report, however, known cybersecurity incidents, individually or in aggregate, have not had a material impact on our company.

Over the last three years, net expenses incurred from any information security breaches, including any penalties and settlements, are not material relative to our total revenue.

For additional discussion on cybersecurity risks we face, see Item 1.A Risk Factors — *A breakdown or breach of our information technology systems could subject us to liability or interrupt the operation of our business*.

The CISO reports to our Chief Scientific Officer (“CSO”).

Our CSO is an executive officer and leads internal research and external innovation, corporate data strategy, technology and data sciences, and reports directly to our CEO.

Mr. Daly has more than 35 years of experience in security and information systems and spent 25 years with Raytheon Technologies, most recently as Chief Technology Officer of Cybersecurity, Special Missions, Training & Services.

and assesses and evaluates cybersecurity incidents, escalating certain cybersecurity incidents to Mr. Daly according to protocol.

We lease approximately 1.1 million square feet of office and laboratory space at our corporate headquarters in Boston, Massachusetts in two buildings pursuant to two leases that we entered into in May [removed: 2011.][added: 2011 and amended in August 2024 to, among other terms, extend the lease termination dates from December 2028 to June 2044.]

We have [removed: an] [added: the] option to extend the term of the leases for [removed: an] [added: up to two] additional [removed: ten years.][added: ten-year periods.]

In addition to our corporate headquarters, we lease an aggregate of approximately [removed: 840,000] [added: 850,000] square feet of space globally.

These leases commenced in December 2013 and extend until December 2028.

As of February [removed: 9, 2024,] [added: 7, 2025,] there were [removed: 106] [added: 101] holders of record of our common stock.

The table set forth below shows repurchases of securities by us during the three months ended December 31, [removed: 2023] [added: 2024] under our Share Repurchase Program.


| Oct. 1, 2024 to Oct. 31, 2024 | | | 230,000 | | | | | | $ | 472.77 | | | | | 230,000 | | | | | | $ | 1,699,865,374 | |

| Nov. 1, 2024 to Nov. 30, 2024 | | | 221,000 | | | | | | $ | 471.15 | | | | | 221,000 | | | | | | $ | 1,595,740,301 | |

| Dec. 1, 2024 to Dec. 31, 2024 | | | 510,129 | | | | | | $ | 420.46 | | | | | 510,129 | | | | | | $ | 1,381,251,940 | |

| Total | | | 961,129 | | | | | | $ | 444.63 | | | | | 961,129 | | | | | | $ | 1,381,251,940 | |


| Oct. 1, 2023 to Oct. 31, 2023 | | | 179,000 | | | | | | $ | 360.95 | | | | | 179,000 | | | | | | $ | 2,651,316,977 | |

| Nov. 1, 2023 to Nov. 30, 2023 | | | 172,552 | | | | | | $ | 362.50 | | | | | 172,552 | | | | | | $ | 2,588,767,489 | |

| Dec. 1, 2023 to Dec. 31, 2023 | | | 46,464 | | | | | | $ | 352.39 | | | | | 46,464 | | | | | | $ | 2,572,394,027 | |

| Total | | | 398,016 | | | | | | $ | 360.62 | | | | | 398,016 | | | | | | $ | 2,572,394,027 | |

The information required by this Item 8 is contained on pages F-1 through [removed: F-46] [added: F-49] of this Annual Report on Form 10-K.

(1) Evaluation of Disclosure Controls and Procedures. Our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as [removed: amended)] [added: amended (the “Exchange Act”))] as of the end of the period covered by this Annual Report on Form 10-K, have concluded that, based on such evaluation, our disclosure controls and procedures were effective.

Internal control over financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated under the [removed: Securities] Exchange [removed: Act of 1934, as amended,] [added: Act,] as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, 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.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2023.][added: 2024.]

Based on our assessment, management has concluded that, as of December 31, [removed: 2023,] [added: 2024,] our internal control over financial reporting is effective based on those criteria.

(3) Changes in Internal Controls. During the quarter ended December 31, [removed: 2023,] [added: 2024,] there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[removed: Report] [added: (4) Report] of Independent Registered Public Accounting Firm

We have audited Vertex Pharmaceuticals Incorporated’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Vertex Pharmaceuticals Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2023] [added: 2024] consolidated financial statements of the Company and our report dated February [removed: 15, 2024,] [added: 13, 2025,] expressed an unqualified opinion thereon.

February 13, 2025

(4)

February 15, 2024

Our policy governing transactions in our securities by our directors, officers, and employees permits our officers, directors and employees to enter into trading plans complying with Rule 10b5-1 under the [removed: Securities] Exchange [removed: Act of 1934, as amended, which plans are intended to satisfy the affirmative defense conditions of Rule 10b5-1 (each, a “Trading Plan”).][added: Act.]

[removed: None] [added: Other than as described in the table below, none] of our [removed: executive] [added: directors or] officers [added: adopted, modified] or [removed: directors entered into] [added: terminated] a Trading Plan in the fourth quarter of [removed: 2023.][added: 2024.]

The following table describes the written plans for the sale of our securities adopted by our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) during the fourth quarter of 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1 (each, a “Trading Plan”).

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name and Title | | | | | | Date of Adoption of Trading Plan | | | | | | Scheduled Expiration Date of Trading Plan (1) | | | | | | Maximum Shares Subject to Trading Plan | | |

| Ourania "Nia" Tatsis *EVP, Chief Regulatory and Quality Officer* | | | | | | 11/22/2024 | | | | | | 10/31/2025 | | | | | | 11,270 | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| (1) A Trading Plan may expire on an earlier date if all contemplated transactions are completed before such Trading Plan’s expiration date, upon termination by broker or the holder of the Trading Plan, or as otherwise provided in the Trading Plan. | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

*2025 Restated Bylaws*

On February 11, 2025, our Board of Directors approved our Amended and Restated By-Laws (the “2025 Restated Bylaws”) to reduce the percentage of our capital stock required to call a special meeting of shareholders from 40% to 25%.

A copy of the 2025 Restated By-Laws is attached as Exhibit 3.2 to this Annual Report on Form 10-K and is incorporated by reference herein.

*Other Information*

Dr. Bastiano Sanna has stepped down from his role as Executive Vice President and Chief of Cell and Genetic Therapies for personal reasons.

Dr. Sanna will continue to provide advisory services in his new role as a consultant to the company.

Portions of our definitive Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Shareholders [removed: (“2024] [added: (“2025] Proxy Statement”) are incorporated by reference into this Part III of our Annual Report on Form 10-K.

The information regarding directors required by this Item 10 will be included in our [removed: 2024] [added: 2025] Proxy Statement and is incorporated herein by reference.

We expect this information to be provided under “Election of Directors,” “Corporate Governance and Risk Management,” “Shareholder Proposals for the [removed: 2025] [added: 2026] Annual Meeting and Nominations for Director,” “Delinquent Section 16(a) Reports” and “Code of Conduct.” The information regarding executive officers required by this Item 10 is included in Part I of this Annual Report on Form 10-K.

We have adopted insider trading policies and procedures governing the purchase, sale and/or other dispositions of our securities by directors, officers and employees, or Vertex itself, that are reasonably designed to promote compliance with insider trading laws, rules and regulations and any listing standards applicable to us.

A copy of our Insider Trading Policy has been filed as Exhibit 19.1 to this Annual Report on Form 10-K.

The information required by this Item 11 will be included in the [removed: 2024] [added: 2025] Proxy Statement and is incorporated herein by reference.

The information required by this Item 12 will be included in the [removed: 2024] [added: 2025] Proxy Statement and is incorporated herein by reference.

The information required by this Item 13 will be included in the [removed: 2024] [added: 2025] Proxy Statement and is incorporated herein by reference.

The information required by this Item 14 will be included in the [removed: 2024] [added: 2025] Proxy Statement and is incorporated herein by reference.

| Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) | | | [removed: F-[1](#i426abec21e574c9bbd8ccf8e3524d2a6_139)] [added: F-[1](#ie9f459f6387e4b038fe2ec4558eff10a_181)] | | |

| Consolidated Statements of Income for the years ended December 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021] [added: 2022] | | | [removed: F-[3](#i426abec21e574c9bbd8ccf8e3524d2a6_142)] [added: F-[4](#ie9f459f6387e4b038fe2ec4558eff10a_184)] | | |

| Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021] [added: 2022] | | | [removed: F-[4](#i426abec21e574c9bbd8ccf8e3524d2a6_145)] [added: F-[5](#ie9f459f6387e4b038fe2ec4558eff10a_187)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2023] [added: 2024] and [removed: 2022] [added: 2023] | | | [removed: F-[5](#i426abec21e574c9bbd8ccf8e3524d2a6_148)] [added: F-[6](#ie9f459f6387e4b038fe2ec4558eff10a_190)] | | |

| Consolidated Statements of Shareholders’ Equity for the years ended December 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021] [added: 2022] | | | [removed: F-[6](#i426abec21e574c9bbd8ccf8e3524d2a6_151)] [added: F-[7](#ie9f459f6387e4b038fe2ec4558eff10a_193)] | | |

| Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021] [added: 2022] | | | [removed: F-[7](#i426abec21e574c9bbd8ccf8e3524d2a6_154)] [added: F-[8](#ie9f459f6387e4b038fe2ec4558eff10a_196)] | | |

| Notes to Consolidated Financial Statements | | | [removed: F-[8](#i426abec21e574c9bbd8ccf8e3524d2a6_157)] [added: F-[9](#ie9f459f6387e4b038fe2ec4558eff10a_199)] | | |

| 3.1 | | | [Restated Articles of Organization of Vertex Pharmaceuticals Incorporated, as [removed: amended.](http://www.sec.gov/Archives/edgar/data/875320/000087532018000022/a2018q210-qexhibit31.htm)] [added: amended.](https://www.sec.gov/Archives/edgar/data/875320/000087532018000022/a2018q210-qexhibit31.htm)] | | | | | | 10-Q (Exhibit 3.1) | | | July 26, 2018 | | | 000-19319 | | |

| 3.2 | | | [Amended and Restated By-Laws of Vertex Pharmaceuticals [removed: Incorporated.](https://www.sec.gov/Archives/edgar/data/875320/000087532023000007/a10k_2022-exhibit32.htm)] [added: Incorporated.](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit32.htm)] | | | [added: X] | | | [removed: 10-K (Exhibit 3.2)] | | | [removed: February 10, 2023] | | | [removed: 000-19319] | | |

| 4.1 | | | [Specimen Stock [removed: Certificate.](http://www.sec.gov/Archives/edgar/data/875320/000087532018000009/a10k2017exhibit41.htm)] [added: Certificate.](https://www.sec.gov/Archives/edgar/data/875320/000087532018000009/a10k2017exhibit41.htm)] | | | | | | 10-K (Exhibit 4.1) | | | February 15, 2018 | | | 000-19319 | | |

| 4.2 | | | [Description of [removed: Securities.](https://www.sec.gov/Archives/edgar/data/875320/000087532023000007/a10k_2022-exhibit42.htm)] [added: Securities.](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit42.htm)] | | | [added: X] | | | [removed: 10-K (Exhibit 4.2)] | | | [removed: February 10, 2023] | | | [removed: 000-19319] | | |

| 10.3 | | | [Amendment No. 2 to Research, Development and Commercialization Agreement, dated as of March 17, 2006, between Vertex Pharmaceuticals Incorporated and Cystic Fibrosis Foundation Therapeutics [removed: Incorporated.](http://www.sec.gov/Archives/edgar/data/875320/000110465911047955/a11-13893_4ex10d6.htm)] [added: Incorporated.](https://www.sec.gov/Archives/edgar/data/875320/000110465911047955/a11-13893_4ex10d6.htm)] | | | | | | 10-Q/A (Exhibit 10.6) | | | August 19, 2011 | | | 000-19319 | | |

| 10.7 | | | [Amendment No. 1 to Amended and Restated Joint Development and Commercialization Agreement, dated [removed: December 23, 3023,] [added: December](https://www.sec.gov/Archives/edgar/data/875320/000087532024000062/a10k_2023-exhibit107.htm) [1](https://www.sec.gov/Archives/edgar/data/875320/000087532024000062/a10k_2023-exhibit107.htm)[2, 2](https://www.sec.gov/Archives/edgar/data/875320/000087532024000062/a10k_2023-exhibit107.htm)[0](https://www.sec.gov/Archives/edgar/data/875320/000087532024000062/a10k_2023-exhibit107.htm)[23,] between Vertex Pharmaceuticals Incorporated, Vertex Pharmaceuticals (Europe) Limited and CRISPR Therapeutics AG, CRISPR Therapeutics Limited, CRISPR Therapeutics, Inc., TRACR Hematology Ltd.†](https://www.sec.gov/Archives/edgar/data/875320/000087532024000062/a10k_2023-exhibit107.htm) | | | [removed: X] | | | [added: 10-K (Exhibit 10.7)] | | | [added: February 15, 2024] | | | [added: 000-19319] | | |

| [removed: 10.9] [added: 10.10] | | | [Lease, dated May 5, 2011, between Eleven Fan Pier Boulevard LLC and Vertex Pharmaceuticals Incorporated.†](https://www.sec.gov/Archives/edgar/data/0000875320/000087532021000027/a2021q210-qexhibit103.htm) | | | | | | 10-Q (Exhibit 10.3) | | | July 30, 2021 | | | 000-19319 | | |

| [removed: 10.10] [added: 10.12] | | | [Credit Agreement, dated as of July 1, 2022, by and among Vertex Pharmaceuticals Incorporated, Bank of America, N.A. and the other lenders party thereto.](https://www.sec.gov/Archives/edgar/data/875320/000087532022000030/a2022q210-qexhibit101.htm) | | | | | | 10-Q (Exhibit 10.1) | | | August 5, 2022 | | | 000-19319 | | |

| [removed: 10.11] [added: 10.14] | | | [Amended and Restated 2006 Stock and Option [removed: Plan.*](http://www.sec.gov/Archives/edgar/data/875320/000087532018000029/a2018q310-q_exhibit101.htm)] [added: Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000087532018000029/a2018q310-q_exhibit101.htm)] | | | | | | 10-Q (Exhibit 10.1) | | | October 25, 2018 | | | 000-19319 | | |

| [removed: 10.12] [added: 10.15] | | | [Form of Stock Option Agreement under Amended and Restated 2006 Stock and Option Plan (granted on or after July 30, [removed: 2013).*](http://www.sec.gov/Archives/edgar/data/875320/000087532015000012/vrtx10k_2014-exhibit1020.htm)] [added: 2013).*](https://www.sec.gov/Archives/edgar/data/875320/000087532015000012/vrtx10k_2014-exhibit1020.htm)] | | | | | | 10-K (Exhibit 10.20) | | | February 13, 2015 | | | 000-19319 | | |

| [removed: 10.13] [added: 10.16] | | | [Amended and Restated 2013 Stock and Option Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000130817922000210/lvrtx2022_def14a.htm) | | | | | | DEF 14A (Appendix A) | | | April 7, 2022 | | | 000-19319 | | |

| [removed: 10.14] [added: 10.17] | | | [Form of Non-Qualified Stock Option Agreement under 2013 Stock and Option [removed: Plan.*](http://www.sec.gov/Archives/edgar/data/875320/000087532015000012/vrtx10k_2014-exhibit1017.htm)] [added: Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000087532015000012/vrtx10k_2014-exhibit1017.htm)] | | | | | | 10-K (Exhibit 10.17) | | | February 13, 2015 | | | 000-19319 | | |

| [removed: 10.15] [added: 10.18] | | | [Form of Restricted Stock Unit Agreement under 2013 Stock and Option Plan [removed: (U.S.).*](http://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10k_2015-exhibit1025.htm)] [added: (U.S.).*](https://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10k_2015-exhibit1025.htm)] | | | | | | 10-K (Exhibit 10.25) | | | February 16, 2016 | | | 000-19319 | | |

| [removed: 10.16] [added: 10.19] | | | [Form of Restricted Stock Unit Agreement under 2013 Stock and Option Plan [removed: (International).*](http://www.sec.gov/Archives/edgar/data/875320/000087532015000012/vrtx10k_2014-exhibit1019.htm)] [added: (International).*](https://www.sec.gov/Archives/edgar/data/875320/000087532015000012/vrtx10k_2014-exhibit1019.htm)] | | | | | | 10-K (Exhibit 10.19) | | | February 13, 2015 | | | 000-19319 | | |

| [removed: 10.17] [added: 10.20] | | | [Form of Restricted Stock Unit Agreement Under 2013 Stock and Option [removed: Plan.*](http://www.sec.gov/Archives/edgar/data/875320/000087532020000007/a10k2019-exhibit1017.htm)] [added: Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000087532020000007/a10k2019-exhibit1017.htm)] | | | | | | 10-K (Exhibit 10.17) | | | February 13, 2020 | | | 000-19319 | | |

| [removed: 10.18] [added: 10.23] | | | [Non-Employee Director Deferred Compensation [removed: Plan.*](http://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10k_2015-exhibit1027.htm)] [added: Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10k_2015-exhibit1027.htm)] | | | | | | 10-K (Exhibit 10.27) | | | February 16, 2016 | | | 000-19319 | | |

| [removed: 10.19] [added: 10.24] | | | [Vertex Pharmaceuticals Incorporated Employee Stock Purchase [removed: Plan.*](http://www.sec.gov/Archives/edgar/data/875320/000130817919000189/lvrt2019_def14a.htm)] [added: Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000130817919000189/lvrt2019_def14a.htm)] | | | | | | DEF 14A (Appendix B) | | | April 26, 2019 | | | 000-19319 | | |

| [removed: 10.20] [added: 10.25] | | | [Employment Agreement, dated as of April 1, 2020, by and between Vertex Pharmaceuticals Incorporated and Jeffrey M. Leiden, M.D., [removed: Ph.D.*](http://www.sec.gov/Archives/edgar/data/875320/000087532020000011/employmentagreement.htm)] [added: Ph.D.*](https://www.sec.gov/Archives/edgar/data/875320/000087532020000011/employmentagreement.htm)] | | | | | | 8-K (Exhibit 10.1) | | | April 1, 2020 | | | 000-19319 | | |

| [removed: 10.21] [added: 10.26] | | | [Amendment No. 1 to Employment Agreement, between Jeffrey M. Leiden and Vertex Pharmaceuticals Incorporated, dated as of February 7, 2022.*](https://www.sec.gov/Archives/edgar/data/875320/000087532022000007/a10k_2021-exhibit1024.htm) | | | | | | 10-K (Exhibit 10.24) | | | February 9, 2022 | | | 000-19319 | | |

| [removed: 10.22] [added: 10.27] | | | [Amendment No. 2 to Employment Agreement, between Jeffrey M. Leiden and Vertex Pharmaceuticals Incorporated, dated as of February 8, 2023*](https://www.sec.gov/Archives/edgar/data/875320/000087532023000007/a10k_2022-exhibit1023.htm) | | | | | | 10-K (Exhibit 10.23) | | | February 10, 2023 | | | 000-19319 | | |

| [removed: 10.23] [added: 10.29] | | | [Employee Non-disclosure, Non-competition and Inventions Agreement between Jeffrey M. Leiden and Vertex Pharmaceuticals Incorporated, dated December 14, [removed: 2011.*](http://www.sec.gov/Archives/edgar/data/875320/000104746912001298/a2206536zex-10_35.htm)] [added: 2011.*](https://www.sec.gov/Archives/edgar/data/875320/000104746912001298/a2206536zex-10_35.htm)] | | | | | | 10-K (Exhibit 10.35) | | | February 22, 2012 | | | 000-19319 | | |

| [removed: 10.24] [added: 10.30] | | | [Employment Agreement, dated as of July 24, 2019, between Vertex Pharmaceuticals Incorporated and Reshma [removed: Kewalramani.*](http://www.sec.gov/Archives/edgar/data/875320/000087532019000026/executiveemploymentagreeme.htm)] [added: Kewalramani.*](https://www.sec.gov/Archives/edgar/data/875320/000087532019000026/executiveemploymentagreeme.htm)] | | | | | | 8-K (Exhibit 10.1) | | | July 25, 2019 | | | 000-19319 | | |

| [removed: 10.25] [added: 10.31] | | | [Change of Control Agreement, dated as of July 24, 2019, between Vertex Pharmaceuticals Incorporated and Reshma [removed: Kewalramani.*](http://www.sec.gov/Archives/edgar/data/875320/000087532019000026/changeofcontrol-rk1.htm)] [added: Kewalramani.*](https://www.sec.gov/Archives/edgar/data/875320/000087532019000026/changeofcontrol-rk1.htm)] | | | | | | 8-K (Exhibit 10.2) | | | July 25, 2019 | | | 000-19319 | | |

| [removed: 10.26] [added: 10.32] | | | [Employment Agreement, dated as of August 27, 2012, between Vertex Pharmaceuticals Incorporated and Stuart [removed: Arbuckle.*](http://www.sec.gov/Archives/edgar/data/875320/000104746912010125/a2211595zex-10_1.htm)] [added: Arbuckle.*](https://www.sec.gov/Archives/edgar/data/875320/000104746912010125/a2211595zex-10_1.htm)] | | | | | | 10-Q (Exhibit 10.1) | | | November 6, 2012 | | | 000-19319 | | |

| [removed: 10.27] [added: 10.33] | | | [Change of Control Agreement, dated as of August 27, 2012, between Vertex Pharmaceuticals Incorporated and Stuart [removed: Arbuckle.*](http://www.sec.gov/Archives/edgar/data/875320/000104746912010125/a2211595zex-10_2.htm)] [added: Arbuckle.*](https://www.sec.gov/Archives/edgar/data/875320/000104746912010125/a2211595zex-10_2.htm)] | | | | | | 10-Q (Exhibit 10.2) | | | November 6, 2012 | | | 000-19319 | | |

| [removed: 10.28] [added: 10.34] | | | [Employment Agreement, dated as of December 12, 2014, between Vertex Pharmaceuticals Incorporated and David [removed: Altshuler.*](http://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10-k_2015xexhibit1034.htm)] [added: Altshuler.*](https://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10-k_2015xexhibit1034.htm)] | | | | | | 10-K (Exhibit 10.34) | | | February 16, 2016 | | | 000-19319 | | |

| [removed: 10.29] [added: 10.35] | | | [Change of Control Agreement, dated as of December 10, 2014, between Vertex Pharmaceuticals Incorporated and David [removed: Altshuler.*](http://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10-k2015xexhibit1035.htm)] [added: Altshuler.*](https://www.sec.gov/Archives/edgar/data/875320/000087532016000067/vrtx10-k2015xexhibit1035.htm)] | | | | | | 10-K (Exhibit 10.35) | | | February 16, 2016 | | | 000-19319 | | |

| [removed: 10.30] [added: 10.36] | | | [Third Amended and Restated Employment Agreement, dated as of February 26, 2013, between Vertex Pharmaceuticals Incorporated and Amit [removed: Sachdev.*](http://www.sec.gov/Archives/edgar/data/875320/000087532017000017/a10k_2016-exhibit1042.htm)] [added: Sachdev.*](https://www.sec.gov/Archives/edgar/data/875320/000087532017000017/a10k_2016-exhibit1042.htm)] | | | | | | 10-K (Exhibit 10.42) | | | February 23, 2017 | | | 000-19319 | | |

| [removed: 10.31] [added: 10.37] | | | [Third Amended and Restated Change of Control Agreement, dated as of February 26, 2013, between Vertex Pharmaceuticals Incorporated and Amit [removed: Sachdev.*](http://www.sec.gov/Archives/edgar/data/875320/000087532017000017/a10k_2016-exhibit1043.htm)] [added: Sachdev.*](https://www.sec.gov/Archives/edgar/data/875320/000087532017000017/a10k_2016-exhibit1043.htm)] | | | | | | 10-K (Exhibit 10.43) | | | February 23, 2017 | | | 000-19319 | | |

| [removed: 10.32] [added: 10.38] | | | [Employment Agreement, [removed: dated March 28, 2019,] [added: dated](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1038.htm) [February 7, 2025](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1038.htm)[,] by and between Vertex Pharmaceuticals Incorporated and Charles F. Wagner, [removed: Jr.*](http://www.sec.gov/Archives/edgar/data/875320/000087532019000019/a2019q110-q_exhibit101.htm)] [added: Jr.*](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1038.htm)] | | | [added: X] | | | [removed: 10-Q (Exhibit 10.1)] | | | [removed: May 1, 2019] | | | [removed: 000-19319] | | |

| [removed: 10.33] [added: 10.39] | | | [Change of Control Agreement, dated as [removed: of March 28, 2019,] [added: of](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1039.htm) [February 7, 2025](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1039.htm)[,] by and between Vertex Pharmaceuticals Incorporated and Charles F. Wagner, [removed: Jr.*](http://www.sec.gov/Archives/edgar/data/875320/000087532019000019/a2019q110-qexhibit102.htm)] [added: Jr.*](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1039.htm)] | | | [added: X] | | | [removed: 10-Q (Exhibit 10.2)] | | | [removed: May 1, 2019] | | | [removed: 000-19319] | | |

| [removed: 10.34] [added: 10.40] | | | [Employment Agreement, dated August 1, 2020, by and between Vertex Pharmaceuticals Incorporated and Nia Tatsis.*](https://www.sec.gov/Archives/edgar/data/875320/000087532022000007/a10k_2021-exhibit1036.htm) | | | | | | 10-K (Exhibit 10.36) | | | February 9, 2022 | | | 000-19319 | | |

| [removed: 10.35] [added: 10.41] | | | [Change of Control Agreement, dated August 1, 2020, by and between Vertex Pharmaceuticals Incorporated and Nia Tatsis.*](https://www.sec.gov/Archives/edgar/data/875320/000087532022000007/a10k_2021-exhibit1037.htm) | | | | | | 10-K (Exhibit 10.37) | | | February 9, 2022 | | | 000-19319 | | |

| 10.9 | | | [2024 Amendment to the Lease (50 Northern Avenue), dated August 15, 2024, between Vertex Pharmaceuticals Incorporated and SNH Seaport LLC. †](https://www.sec.gov/Archives/edgar/data/875320/000087532024000223/a2024q310-qexhibit101.htm) | | | | | | 10-Q (Exhibit 10.1) | | | November 5, 2024 | | | 000-19319 | | |

| 10.11 | | | [2024 Amendment to Lease (11 Fan Pier Boulevard), dated August 15, 2024, between Vertex Pharmaceuticals Incorporated and SNH Seaport LLC.†](https://www.sec.gov/Archives/edgar/data/875320/000087532024000223/a2024q310-qexhibit102.htm) | | | | | | 10-Q (Exhibit 10.2) | | | November 5, 2024 | | | 000-19319 | | |

| 10.13 | | | [First Amendment to Credit Agreement, dated June 20, 2024 by and between Vertex Pharmaceuticals Incorporated and Bank of America N.A.](https://www.sec.gov/Archives/edgar/data/875320/000087532024000198/a2024q210-qexhibit101.htm) | | | | | | 10-Q (Exhibit 10.1) | | | August 2, 2024 | | | 000-19319 | | |

| 10.21 | | | [Form of Restricted Stock Unit Agreement under 2013 Stock and Option Plan (granted on or after January 1, 2025).*](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1021.htm) | | | X | | | | | | | | | | | |

| 10.22 | | | [Form of Restricted Stock Unit Agreement (with performance conditions) under 2013 Stock and Option Plan.*](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit1022.htm) | | | X | | | | | | | | | | | |

| 10.28 | | | [Amendment No.3 to Employment Agreement, between Jeffrey M. Leiden and Vertex Pharmaceuticals Incorporated, dated as of November 1, 2024.*](https://www.sec.gov/Archives/edgar/data/875320/000087532024000223/a2024q310-qexhibit103.htm) | | | | | | 10-Q (Exhibit 10.3) | | | November 5, 2024 | | | 000-19319 | | |

| Insider Trading Policy | | | | | | | | | | | | | | | | | |

| 19.1 | | | [Vertex Pharmaceuticals Incorporated Insider Trading Policy. *](https://www.sec.gov/Archives/edgar/data/875320/000087532025000053/a10k_2024-exhibit191.htm) | | | X | | | | | | | | | | | |

| Plan of Acquisition | | | | | | | | | | | | | | | | | |

| 2.1 | | | [Agreement and Plan of Merger, dated as of June 6, 2019, among Vertex Pharmaceuticals Incorporated, VXP Merger Sub, Inc., Exonics Therapeutics, Inc. and Shareholder Representative Services LLC, solely in its Capacity as Shareholders’ Representative, as amended by the Amendment to Agreement and Plan of Merger, dated as of June 12, 2019, among Vertex Pharmaceuticals Incorporated, VXP Merger Sub, Inc., Exonics Therapeutics, Inc. and Shareholder Representative Services LLC, solely in its Capacity as Shareholders’ Representative.†](http://www.sec.gov/Archives/edgar/data/875320/000087532019000037/a2019q210-qexhibit101.htm) | | | | | | 10-Q (Exhibit 10.1) | | | August 1, 2019 | | | 000-19319 | | |

| February [removed: 15, 2024] [added: 13, 2025] | | | By: | | | /s/ Reshma Kewalramani | | |

| Reshma Kewalramani | | | | | | | | | | | | President, Chief Executive Officer and Director (Principal Executive Officer) | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Charles F. Wagner, Jr. | | | | | | | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Kristen C. Ambrose | | | | | | | | | | | | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Jeffrey M. Leiden | | | | | | | | | | | | Executive Chairman | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Sangeeta N. Bhatia | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Lloyd Carney | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Alan Garber | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Michel Lagarde | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Diana McKenzie | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Nancy A. Thornberry | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Bruce I. Sachs | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

| Suketu Upadhyay | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February [removed: 15, 2024] [added: 13, 2025] | | | | | | | | | | | | | | |

We have audited the accompanying consolidated balance sheets of Vertex Pharmaceuticals Incorporated (the Company) as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 15, 2024,] [added: 13, 2025,] expressed an unqualified opinion thereon.

Critical Audit [removed: Matter][added: Matters]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

| *Description of the Matter* | | | | | | As discussed in Note A to the Company’s consolidated financial statements, the Company recognizes revenue from product sales based on amounts due from customers net of allowances for variable consideration, which include, among others, rebates mandated by law under Medicaid and other government pricing programs. The most significant estimates relate to government and private payor rebates, chargebacks, discounts and fees, collectively rebates. The Company includes an estimate of variable consideration in its transaction price at the time of sale, when control of the product transfers to the customer. The Company estimates its Medicaid and other government pricing accruals based on monthly sales, historical experience of claims submitted by the various states and jurisdictions, historical rebate rates and estimated lag time of the rebate invoices. Rebate accruals inclusive of estimated amounts due for claims not yet received or processed as part of the Company’s Medicaid program are recorded within accrued expenses on the Company’s consolidated balance sheet. Auditing the allowances for rebates owed pursuant to the Medicaid Drug Rebate Program in the U.S. was complex and judgmental due to the significant estimation required in determining certain assumptions including the levels of expected utilization of these rebates based on the amount of product sold to eligible patients, as well as the complexity of the government mandated [added: rebate] calculations. The allowances for rebates owed pursuant to the Medicaid Drug Rebate Program in the U.S. are sensitive to these significant assumptions and calculations. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition process, including controls over management’s [added: computation and] review of the allowances for Medicaid rebates. We tested the Company’s controls to assess the completeness and accuracy of the current and historical data that supports the Medicaid estimate, significant assumptions related to the inputs utilized as well as management’s review of the application of the government pricing regulations. Our audit procedures to test the allowances for rebates owed pursuant to the Medicaid Drug Rebate Program in the U.S., [removed: included,] [added: included] the following: we [removed: performed audit procedures to assess] [added: assessed] the methodology used to determine the estimate and tested the significant assumptions as well as the underlying data used by the Company in its analysis. We also assessed the historical accuracy of the Company’s estimates of Medicaid rebates by comparing assumptions to historical trends and evaluating the change from prior periods. We further tested the completeness and accuracy of the underlying data used in the Company’s calculations through reconciliation to third-party invoices, claims data and actual cash payments. In addition, we involved our government pricing specialists to assist in evaluating management’s methodology and calculations used in the measurement of certain estimated rebates. | | |

| | | | [added: 2024 | | | | | |] 2023 | | | | | | 2022 | | | | | | 2021 | | |

| Product revenues, net | | | $ | [removed: 9,869.2] [added: 11,020.1] | | | | | $ | [removed: 8,930.7] [added: 9,869.2] | | | | | $ | [removed: 7,573.4] [added: 8,930.7] | |

| Total [removed: revenues] [added: product revenues, net] | | | [removed: 9,869.2] [added: $] | [added: 11,020.1] | | | | | [removed: 8,930.7] [added: $] | [added: 9,869.2] | | | | | [removed: 7,574.4] [added: $] | [added: 8,930.7] | |

| Cost of sales | | | [removed: 1,262.2] [added: 1,530.5] | | | | | | [removed: 1,080.3] [added: 1,262.2] | | | | | | [removed: 904.2] [added: 1,080.3] | | |

| Research and development expenses | | | [removed: 3,162.9] [added: 3,630.3] | | | | | | [removed: 2,540.3] [added: 3,162.9] | | | | | | [removed: 1,937.8] [added: 2,540.3] | | |

| Acquired in-process research and development expenses | | | [removed: 527.1] [added: 4,628.4] | | | | | | [removed: 115.5] [added: 527.1] | | | | | | [removed: 1,113.3] [added: 115.5] | | |

| Selling, general and administrative expenses | | | [removed: 1,136.6] [added: 1,464.3] | | | | | | [removed: 944.7] [added: 1,136.6] | | | | | | [removed: 840.1] [added: 944.7] | | |

| Change in fair value of contingent consideration | | | [removed: (51.6)] [added: (0.5)] | | | | | | [removed: (57.5)] [added: (51.6)] | | | | | | [removed: (3.1)] [added: (57.5)] | | |

| Total costs and expenses | | | [removed: 6,037.2] [added: 11,253.0] | | | | | | [removed: 4,623.3] [added: 6,037.2] | | | | | | [removed: 4,792.3] [added: 4,623.3] | | |

| [removed: Income] [added: (Loss) income] from operations | | | [removed: 3,832.0] [added: (232.9)] | | | | | | [removed: 4,307.4] [added: 3,832.0] | | | | | | [removed: 2,782.1] [added: 4,307.4] | | |

| Interest income | | | [removed: 614.7] [added: 598.1] | | | | | | [removed: 144.6] [added: 614.7] | | | | | | [removed: 4.9] [added: 144.6] | | |

| Interest expense | | | [removed: (44.1)] [added: (30.6)] | | | | | | [removed: (54.8)] [added: (44.1)] | | | | | | [removed: (61.5)] [added: (54.8)] | | |

| Other [removed: (expense) income,] [added: expense,] net | | | [removed: (22.8)] [added: (86.1)] | | | | | | [removed: (164.8)] [added: (22.8)] | | | | | | [removed: 4.9] [added: (164.8)] | | |

| Income before provision for income taxes | | | [removed: 4,379.8] [added: 248.5] | | | | | | [removed: 4,232.4] [added: 4,379.8] | | | | | | [removed: 2,730.4] [added: 4,232.4] | | |

| Provision for income taxes | | | [removed: 760.2] [added: 784.1] | | | | | | [removed: 910.4] [added: 760.2] | | | | | | [removed: 388.3] [added: 910.4] | | |

| Net [added: (loss)] income | | | $ | [removed: 3,619.6] [added: (535.6)] | | | | | $ | [removed: 3,322.0] [added: 3,619.6] | | | | | $ | [removed: 2,342.1] [added: 3,322.0] | |

| Net [added: (loss)] income per common share: | | | | | | | | | | | | | | | | | |

| Basic | | | $ | [removed: 14.05] [added: (2.08)] | | | | | $ | [removed: 12.97] [added: 14.05] | | | | | $ | [removed: 9.09] [added: 12.97] | |

| Diluted | | | $ | [removed: 13.89] [added: (2.08)] | | | | | $ | [removed: 12.82] [added: 13.89] | | | | | $ | [removed: 9.01] [added: 12.82] | |

| /s/ Jennifer Schneider | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Jennifer Schneider | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February 13, 2025 | | | | | | | | | | | | | | |

| | | | | | | Evaluating the fair value of the in-process research and development assets acquired in the Alpine Immune Sciences, Inc. acquisition | | |

| *Description of the Matter* | | | | | | As described in Note B to the consolidated financial statements, on May 20, 2024, the Company acquired Alpine Immune Sciences, Inc. (“Alpine”), a publicly traded biotechnology company focused on discovering and developing innovative, protein-based immunotherapies for approximately $5.0 billion in cash. The Company determined substantially all the fair value of the gross assets acquired were concentrated in Alpine’s lead molecule, povetacicept. Therefore, the Company accounted for the Alpine transaction as an asset acquisition under U.S. GAAP. The acquired in-process research and development asset was valued at $4.4 billion, which was expensed on the date of acquisition as it did not have alternative future use at the acquisition date. Auditing the fair value of the in-process research and development assets acquired in the Alpine transaction was judgmental due to the significant estimation uncertainty and subjectivity of the significant assumptions used by management in determining the present value of future discounted cash flows. The significant assumptions used in determining the fair value of the in-process research and development assets acquired included the amount and timing of future product revenues, the discount rate and probability of technical and regulatory success. The valuation of the in-process research and development assets is sensitive to these significant assumptions. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s review of the valuation of the in-process research and development assets of Alpine. For example, we tested controls over management’s review of the significant assumptions and the completeness and accuracy of the data used in the valuation. To test the fair value of the povetacicept in-process research and development assets, we performed audit procedures that included, among others, evaluating the Company's methodologies used and testing the significant assumptions discussed above. For example, we compared the significant assumptions used by management to current published scientific studies, industry, market and economic trends, and to other relevant factors. In addition, to evaluate the probability of technical and regulatory success, we considered the phase of development of the in-process research and development assets and compared the Company’s assumptions to third-party data regarding clinical trial success rates. We also performed various sensitivity analyses of the significant assumptions to evaluate the change in the fair value of the in-process research and development assets resulting from changes in the assumptions. In addition, we involved our valuation specialists to assist in our evaluation of the methodologies and the discount rate used in the fair value estimates. | | |

February 13, 2025

| Net (loss) income | | | $ | (535.6) | | | | | $ | 3,619.6 | | | | | $ | 3,322.0 | |

| | | | 2024 | | | | | | 2023 | | |

| Net loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (535.6) | | | | | | (535.6) | | |

| Repurchases of common stock | | | (2.7) | | | | | | (0.0) | | | | | | (1,194.9) | | | | | | — | | | | | | — | | | | | | (1,194.9) | | |

| Balance at December 31, 2024 | | | 256.9 | | | | | | $ | 2.6 | | | | | $ | 6,672.4 | | | | | $ | 127.8 | | | | | $ | 9,606.8 | | | | | $ | 16,409.6 | |

| Net (loss) income | | | $ | (535.6) | | | | | $ | 3,619.6 | | | | | $ | 3,322.0 | |

| Acquisition of available-for-sale debt securities from Alpine Immune Sciences, Inc. | | | (258.0) | | | | | | — | | | | | | — | | |

| Other investing activities | | | (54.0) | | | | | | (31.0) | | | | | | (47.8) | | |

CASGEVY was initially approved by the FDA in December 2023.

In January 2025, the FDA approved JOURNAVX (suzetrigine), our selective non-opioid NaV1.8 pain signal inhibitor, for the treatment of moderate-to-severe acute pain.

entitled in exchange for the goods or services that we transfer to the customer.

In the U.S., we also sell certain products to major wholesalers.

In certain markets, we may sell CASGEVY directly to ATCs.

Revenue recognition typically occurs upon delivery of our small molecule products, including our CF medicines, and upon infusion of our gene-therapy products, including CASGEVY.

These fees are based on a fixed percentage of sales.

*Product Returns:* We typically permit returns if our product is damaged, defective, or otherwise cannot be used by our customer.

However, our return policies vary by product and market.

We record deductions from our gross product revenues for estimated sales returns in the period the related revenue is recognized and base our estimate for returns on historical experience and known or expected changes in the marketplace specific to each product.

We do not adjust our net product revenues for the effects of a significant financing component for transactions where we expect, at contract inception, the period between our customer obtaining control of our product and when we receive payment to be one year or less.

*Cost of Sales*

Our cost of sales primarily includes royalty expenses, cost of product sales, intangible asset amortization expenses, and other items related to our manufacturing processes, adjusted by CRISPR Therapeutics AG’s (“CRISPR”) share of the net commercial profits or losses for CASGEVY.

In transactions that do not qualify as a business combination, we present the cost to acquire AIPR&D within our "Cash flows from operating activities" in our consolidated statements of cash flows.

For our real estate leases, we account for lease and fixed non-lease components together as a single lease component.

For our embedded leases with contract manufacturing organizations, we account for the lease component separately from the non-lease components.

A valuation allowance is applied against any net deferred tax asset if,

We record finite-lived intangible assets at cost, net of accumulated amortization, on our consolidated balance sheets as “Other intangible assets, net.” Most of these assets relates to our marketed products and may include, among other things,

We have disclosed significant segment expenses, other segment items, and our measure of segment profit or loss in Note Q, “Segment Information.”

We anticipate that the adoption of ASU 2023-09 will expand our income tax footnote disclosures, including a more detailed effective tax rate reconciliation.

Disaggregation of Income Statement Expenses

In 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses* (“ASU 2024-03”), which requires public entities, among other items, to disclose in a tabular format, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses.

ASU 2024-03 becomes effective for the annual period starting on January 1, 2027 and interim periods starting on January 1, 2028.

In 2024, our AIPR&D included $4.4 billion associated with our asset acquisition of Alpine Immune Sciences, Inc. (“Alpine”) as discussed below.

Alpine Immune Sciences, Inc. - povetacicept

On May 20, 2024, we acquired all of the issued and outstanding shares of common stock of Alpine, a publicly traded biotechnology company focused on discovering and developing innovative, protein-based immunotherapies for approximately $5.0 billion in cash.

| /s/ Terrence C. Kearney | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Terrence C. Kearney | | | | | | | | | | | | Director | | | | | | | | | | | | | | | February 15, 2024 | | | | | | | | | | | | | | |

February 15, 2024

| Revenues: | | | | | | | | | | | | | | | | | |

| Other revenues | | | — | | | | | | — | | | | | | 1.0 | | |

Please refer to Note A, “Nature of Business and Accounting Policies,” for an explanation of amounts reclassified from “Research and development expenses” to “Acquired in-process research and development expenses” for 2021.

| Balance at December 31, 2020 | | | 259.9 | | | | | | $ | 2.6 | | | | | $ | 7,894.0 | | | | | $ | (68.5) | | | | | $ | 858.7 | | | | | $ | 8,686.8 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,342.1 | | | | | | 2,342.1 | | |

| Repurchases of common stock | | | (7.3) | | | | | | (0.1) | | | | | | (1,425.3) | | | | | | — | | | | | | — | | | | | | (1,425.4) | | |

| Investment in equity securities and notes receivable | | | (31.0) | | | | | | (47.8) | | | | | | (77.0) | | |

In 2022, we began to separately classify upfront, contingent milestone, and other payments pursuant to our business development transactions, including collaborations, licenses of third-party technologies, and asset acquisitions as “Acquired in-process research and development expenses” in our consolidated statements of income in cases where such acquired assets do not have an alternative future use.

To conform prior periods to current presentation, we reclassified $1.1 billion from “Research and development expenses” to “Acquired in-process research and development expenses” for 2021.

Once a contract is determined to be within the

CF Product Revenues

which account for the largest portion of our total revenues.

As noted above, we recognize net product revenues from sales when our customers obtain control of our products, which typically occurs upon delivery to our CF customers.

CASGEVY Product Revenues

We expect to sell CASGEVY principally to a limited number of specialty distributors or directly to authorized hospitals and clinics in markets where a specialty distributor is not utilized.

Control is expected to transfer to our CASGEVY customers, resulting in revenue recognition, upon infusion of this gene-editing therapy into our patients.

The fair value of

In addition, we evaluate risks associated with manufacturing the product candidate and the remaining shelf-life of the inventories.

We do not separate lease and non-lease components for our real estate leases when determining which lease payments to include in the calculation of our lease assets and liabilities.

establish an accounting policy to provide for tax on Global Intangible Low Taxed Income (“GILTI”) earned by certain foreign subsidiaries.

*Variable Interest Entities*

We review each agreement pursuant to which we license technologies owned by a third party to determine whether or not we have a variable interest via the license agreement with the third party and if the variable interest is a variable interest in the third party as a whole and whether or not we are the primary beneficiary of that variable interest entity (“VIE”).

If we determine we are the primary beneficiary of a VIE at the onset of a license agreement, it is treated as a business combination and we consolidate the financial statements of the VIE into our consolidated financial statements until we are no longer the primary beneficiary of the consolidated VIE, or no longer have a variable interest in the VIE.

As of December 31, 2023 and 2022, we did not have any consolidated VIEs.

approval is achieved or the assets are acquired and continuing through the period that we no longer have either exclusive rights to market the products associated with the assets or in-license rights to the intellectual property underlying the assets.

We have not been required to adopt any accounting standards that had a significant impact on our consolidated financial statements in the three years ended December 31, 2023.

We are in the process of analyzing the impact that the adoption of ASU 2023-09 will have on our income tax disclosures.

In 2021, we and CRISPR amended and restated the Original JDCA (the “A&R JDCA”), pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder; (b) adjust the allocation of net profits and net losses between the parties; and (c) exclusively license (subject to CRISPR’s reserved rights to conduct certain activities) certain intellectual property rights to us relating to the products that may be researched, developed, manufactured and commercialized under such agreement.

In connection with the A&R JDCA, we made a $900.0 million upfront payment to CRISPR in the second quarter of 2021.

We concluded that we did not have any alternative future use for the acquired in-process research and development and recorded this upfront payment to “Acquired in-process research and development expenses.” Prior to receiving marketing approval for CASGEVY, we accounted for the A&R JDCA as a cost-sharing arrangement, with costs incurred related to CASGEVY allocated 60% to us and 40% to CRISPR, subject to certain adjustments, and we recognized the impact of the arrangement as either “Research and development expenses” or “Selling, general and administrative expenses.” Prior to July 1, 2021, we and CRISPR shared equally all expenses incurred under the Original JDCA, which we also accounted for as a cost-sharing arrangement.

losses incurred with respect to CASGEVY, subject to certain adjustments.

In 2023, the net commercial loss incurred with respect to CASGEVY was not material to our consolidated statement of income.

In 2023, 2022 and 2021, we recognized the net impact of the A&R JDCA and Original JDCA as “Research and development expenses” of $227.0 million, $194.2 million and $108.2 million, respectively, and “Selling, general and administrative expenses” of $94.9 million, $61.4 million and $20.8 million, respectively, within our consolidated statements of income.

In 2023, Entrada also achieved a research milestone, resulting in a $17.5 million payment to Entrada.

We recorded the upfront and milestone payments totaling $242.6 million to “Acquired in-process research and development expenses” in 2023.

Verve Therapeutics, Inc.

In 2022, we entered into a strategic collaboration and license agreement with Verve Therapeutics, Inc. (“Verve”) focused on discovering and developing an in vivo gene-editing program for a liver disease.